The NASCAR antitrust lawsuit settled during the ninth day of a trial that was expected to last at least another two. Specifics of the settlement have not been made public, except to report that NASCAR’s team charters will become permanent, or “evergreen,” as described in the parties’ joint statement. You might remember that “Legal Files” reported on the litigation in the January 2025 issue. This conflict was the culmination of an acrimonious negotiation between NASCAR and its race teams, which were vying for permanence and a greater share of revenues. The negotiation ended when NASCAR presented the teams with a take-it-or-leave-it […]
The NASCAR antitrust lawsuit settled during the ninth day of a trial that was expected to last at least another two. Specifics of the settlement have not been made public, except to report that NASCAR’s team charters will become permanent, or “evergreen,” as described in the parties’ joint statement.
You might remember that “Legal Files” reported on the litigation in the January 2025 issue. This conflict was the culmination of an acrimonious negotiation between NASCAR and its race teams, which were vying for permanence and a greater share of revenues. The negotiation ended when NASCAR presented the teams with a take-it-or-leave-it charter agreement that would qualify them to race entire seasons and give them a smaller share of the race revenues. Although the team owners generally viewed the charter agreements as grossly unfair, most signed them to assure they would have a place in each race.
But two of the teams refused: 23XI Racing, owned by Michael Jordan, Denny Hamlin and another partner; and Front Row Motorsports. They decided they would take their chances in court, filing an antitrust lawsuit claiming that NASCAR was a monopoly and should be forced to make the charter agreements permanent, with better revenue sharing for the teams, and to pay substantial damages to the plaintiffs. NASCAR’s response was, basically, “Never in a million years.”
At trial
The trial was held in the U.S. District Court in Charlotte, NC. It started, of course, with the plaintiffs presenting their case. As “Legal Files” predicted, definition of the relevant market was a focal point — is NASCAR in the stock-car-racing business or the sports business? There wasn’t much doubt that the answer would be stock-car racing. As “Legal Files” also predicted, NASCAR’s arrogant take-it-or-leave-it imposition of the charter agreements was detrimental to its case, amplifying the existence of monopoly power.
Michael Jordan testified early in the trial. As expected, he was well received by the jury, who seemed to enjoy being in the same room with a celebrity athlete of his stature.
A lot of commotion came out of the testimony of another team owner, Richard Childress, who said he was reluctant to sign the charter agreement because it was so unfair to the teams that couldn’t make a profit on what NASCAR was willing to give them. ESPN called his testimony “fiery.” Letters from more owners, including Joe Gibbs, Rick Hendrick, Jack Roush and Roger Penske were introduced, corroborating what Childress had said, and stating that they had also pleaded with NASCAR to make the charters permanent.
NASCAR chairman and CEO Jim France testified that he was not moved by the comments from these men, even though he considers them good friends.
Also introduced as evidence were internal NASCAR communications from Commissioner Steve Phelps, who described Childress as a “stupid redneck” who should be “taken out back and flogged.” That prompted Bass Pro Shops founder Johnny Morris, a Childress sponsor, to publicly call for Phelps to be removed from his position, the day before the settlement was reached.
Kumbaya statements
The settlement was announced in court at about 11 a.m. on the ninth day of trial. Once the jury was excused and final case matters were addressed, the parties went outside to address the media.
Jordan appeared to be the main spokesman for the group. Among his statements:
“Both parties feel like [the settlement is] worth it — because we understand we had to work together.
Compromise in every negotiation is one of the toughest things that you can do. And I think that you can say that we both compromised on both of our agendas, and I think we both came to the conclusion that it’s better for the sport.
The fans have always been the best solution to this, over us here, to the sport itself — the only way that, and I’ve said this from day one, the only way this sport is going to grow is we have to find some synergy between the two entities.”
France told the crowd, “I feel the same. We can get back to a focus on what we really love, and that’s racing. We made a very good decision here together. We have a good opportunity here to grow the sport.”
Asked why it took 14 months of litigation and eight days of trial to get to the deal, Jordan gave a little smile and responded, “Level heads. In all honesty, sometimes when you get to the finish line, you have to think not just for yourself but for the sport as a whole. I think both parties got to that point; we realized we got the opportunity to settle this, we dove in, and we actually did it.”
What prompted it?
Every legal dispute starts with each of the parties digging into their position, often worlds apart from the other’s. Everyone knows the final answer is going to be somewhere in between, but each side believes it’s going to be much closer to their position. Plus, there is always a lot of emotion baked into those positions.
Here, both sides were solidly stuck to their positions. Jordan’s side was looking for justice, to improve their economic position, and to save the sport, which they believed was declining. NASCAR was looking to preserve their dominance over the series in order to be able to guide it as they saw best, and no doubt to preserve their own economic position.
As discovery is conducted, the parties usually see how the evidence, both theirs’ and the other side’s, is going to come across to the jury, which usually softens their positions. However, that didn’t seem to happen here. As the case gets close to trial, the parties usually start realizing that they could actually lose, and that a negotiated settlement is better than just leaving everything up to the jury to decide — which can be an unpredictable answer.
A few weeks before this case went to trial, the parties did engage in a two-day settlement conference. They reported good progress after the first day, not so much on the second day. However, speculation is that the unsuccessful settlement conference convinced NASCAR that it should settle. But that didn’t happen right away.
So, they went to trial. That added a new dimension — the jury’s reaction to the evidence. Press reports consistently said that the plaintiffs were making headway with the jury. Commentators also said that NASCAR seemed to not be defending the claims as much as trying to limit the damages that would be awarded to the plaintiffs.
This case carried a big monetary risk for NASCAR. The plaintiffs’ economist expert testified to about $365m in damages. Under antitrust law, damages awarded by the jury are tripled. But it didn’t end there. The plaintiffs were asking for the court to order NASCAR to make the charters permanent, to pay the race teams a larger share of revenues, and to alter their business practices in various ways, including potentially divesting themselves of ownership of the racetracks. Altogether, that would have ended NASCAR as the France family has known it.
On the other side, a loss for the plaintiffs would have put them out of the racing business, and they would have to swallow their sizable legal fees.
Who won?
Despite all the happy talk about this being a great settlement for all parties and great for the sport, it looks pretty clear that Michael Jordan won yet again. All along, NASCAR’s big non-negotiable was that the charters could never be permanent. Now they are. That cannot be described as anything other than a huge victory for the race teams.
There’s also going to be more money for the teams. The parties are mum about that, but their joint statement says, “As a condition of the settlement agreement, NASCAR will issue an amendment to existing charter holders detailing the updated terms for signature, which will include a form of ‘evergreen’ charters, subject to mutual agreement. The financial terms of the settlement are confidential and will not be released.” This has to mean that there are going to be different revenue-sharing provisions — if all that was going to change was the term of the charter agreements, that wouldn’t take much “mutual agreement.”
There also must be something in the settlement for 23XI and Front Row. They took the risk and pursued the litigation that now benefits all of the teams, even those who chose not to stand up for themselves. We may never know what, but they have to be getting something in return for their efforts.
Jordan was kind when he said that “level heads prevailed.” Nobody ever says that about themselves, so he must have been referring to NASCAR coming around, seeing what was going to happen to it, and cutting its losses.
John Draneas is an attorney in Oregon and has been SCM’s “Legal Files” columnist since 2003. John can be contacted at john@draneaslaw.com. His comments are general in nature and are not intended to substitute for consultation with an attorney.