Denny Hamlin, co-founder of 23XI Racing, has publicly criticized NASCAR and its CEO, Jim France, accusing them of wielding unfair control over the sport. His team, alongside Front Row Motorsports, has escalated the situation by filing an antitrust lawsuit in federal court in North Carolina, as revealed in a joint announcement on Wednesday.
In 2021, Hamlin partnered with NBA icon Michael Jordan and business associate Curtis Polk to establish 23XI Racing, marking a significant personal investment in NASCAR. Despite achieving considerable on-track success, tensions off the track have simmered due to unresolved disputes with NASCAR, specifically surrounding a contentious charter agreement.
Origins of the Lawsuit
The legal action arises from both 23XI Racing and Front Row Motorsports’ refusal to sign NASCAR’s latest charter proposal at Atlanta Motor Speedway. Negotiations between teams and NASCAR have stretched on for two years, with a primary disagreement centered around NASCAR’s resistance to making team charters permanent fixtures within the sport.
Hamlin, who has been a Cup Series driver for Joe Gibbs Racing since 2005, argues that NASCAR has abused its power, compelling him to explore alternative measures. In an interview with Racer, Hamlin stated: “I didn’t realize, until reinvesting the money I’ve earned as a driver back into the sport for Jim France and NASCAR, how inherently unjust the system is. We reached a breaking point, where collectively we said, ‘Enough is enough,’ and decided to act.”
Power Imbalance and NASCAR’s Monopoly
At the heart of the issue lies NASCAR’s monopolistic control over the sport. Both NASCAR and Speedway Motorsports own all the tracks used in the series, preventing any potential rival series from establishing themselves. Moreover, NASCAR retains ownership of the Next Gen car, mandating that teams purchase components from NASCAR-sanctioned suppliers at fixed prices, further restricting the car’s use outside of NASCAR’s control.
Curtis Polk, co-owner of 23XI Racing, explained that their objective was to negotiate a fair charter deal without being coerced into an unfavorable agreement. After negotiations stalled, the team sought the expertise of antitrust and sports attorney Jeffrey Kessler, which ultimately led to the lawsuit. Polk elaborated: "We knew we had no leverage. Our discussions with NASCAR focused on making the sport better—not just for teams, but for drivers, fans, and even NASCAR itself. We invested tens of millions in this system, only to be told by a single person that we wouldn’t get any more than what was offered. That didn’t sit right, and that’s why we turned to Jeffrey."
Legal Strategy and Long-Term Outlook
Kessler, who was consulted earlier this year to guide the teams through negotiations with NASCAR, foresees inevitable change within the sport. Kessler remarked, "This reminds me of several other sports that have undergone significant transformations.". "The judicial system ultimately engages with these organizations, compelling them to adapt.". Either they adapt voluntarily, or they are compelled to change."
He continued by asserting that the teams had little choice but to engage in litigation, adding: "NASCAR left them with no alternative—either submit to their control or fight back. They've decided to take a stand, and ultimately, NASCAR will probably have to adapt.
Kessler made comparisons to his past experiences, particularly with the NCAA, highlighting the comparable pressure for change. "Similar to the NCAA, NASCAR is at a crossroads—either persist with legal battles and potentially face defeat, or engage in a dialogue to revamp the sport internally."
The Road Ahead for NASCAR
Kessler's perspective highlights the significance of this lawsuit. If NASCAR opts to negotiate a fair deal, it could reshape the sport for teams and participants alike. Should they resist, however, the case may proceed to trial, where a jury could mandate systemic changes. Kessler emphasized: "If NASCAR is unwilling to embrace meaningful change, they’ll have no choice but to battle this out in court. Eventually, the legal process will compel reform."
The lawsuit marks a pivotal moment for NASCAR, potentially altering the landscape of a sport dominated by longstanding power structures. Whether the outcome results in cooperation or legal confrontation, the future of NASCAR now hangs in the balance.
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