The legal fight between NASCAR and two of its fast-growing teams has turned into one of the biggest courtroom battles the sport has faced in years. With the antitrust trial now underway, 23XI Racing and Front Row Motorsports say the system they operate in is built in a way that hurts them. NASCAR says that’s not true and argues it is simply running the sport the way any major league would.
Bob Pockrass explained the core of the case, noting the teams believe, “The root of the case: 23XI/FRM claim that NASCAR needs premier stock-car racing teams to put on its premier stock-car racing product. And through illegal acts, it stifles competition to the point where it can impose a business model for the teams that is not economically viable.”
What the Teams Say NASCAR Is Doing
According to the lawsuit, the teams believe they have no freedom to make business choices outside the NASCAR system. Pockrass summed up their claim: “23XI/FRM allege b/c NASCAR won’t let charter teams race other stock-car series, doesn’t allow Cup tracks to have other stock-car series, controls costs of entry (Next Gen w/single-source suppliers), controls payouts, car can’t race anywhere else, teams have no other options.”
NASCAR rejects the accusations. Its position is that the rules protect the value of the sport and help secure strong TV deals. “NASCAR says it has not done anything illegal when it comes to anticompetitive acts, that it is just making smart business decisions; that to have a TV deal worth $$, it must have parameters in place that top teams/drivers will compete & that charter payouts have gone up, Pockrass wrote.”
The teams say what they want is simple. “Permanent charters, bigger say in decisions that impact teams, especially financially, and $$ to cover losses, Pockrass reported.”
The Legal Bar and Major Obstacles
The teams carry the burden of proof. “One element to remember in this trial, the burden of proof is on 23XI/Front Row, and they must prove their case on the preponderance of the evidence. It is not ‘beyond a reasonable doubt,’ which is the burden of proof in a criminal trial, Pockrass explained.”
Their biggest hurdles include facts NASCAR will likely point to: “Already part of system, bought charters, 23XI turned profit, charter payouts up, charter sale price up, TV $ contingent on top teams racing so exclusivity good, new teams have been competitive, no new series has entered market & failed so no proof.”
NASCAR faces challenges of its own. Some internal communication could work against it. “Emails/texts showing attitude wanting to crush competition and it had leverage on the teams in negotiations, exclusivity clauses for tracks, most teams say they lose money while NASCAR made $100M+, Pockrass said.”
What Happens If Either Side Wins
The judge already ruled on the market definition ahead of trial. “What won’t be an issue at trial? Whether teams could race other series instead. The judge has ruled that the market is for premier stock-car racing team services & NASCAR has a monopoly in that market. It’s up to the jury to decide if NASCAR has done anything illegal to have that monopoly, Pockrass added.”
If the teams win, the impact could be huge. “Jury determines monetary damages, only actual damages; the judge could triple that amount; the judge determines antitrust remedies. Anything possible, such as sell the tracks, permanent charters, no charters, get rid of Next Gen concept, no exclusivity clauses, Pockrass wrote.”
If NASCAR wins, the two teams could face real danger. “23XI and FRM would have to race as open teams. 23XI and FRM likely would shut down within a year pending any appeals, Pockrass reported.”
No matter the outcome, an appeal is expected. According to Pockrass, this could stretch the case another year or two.
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