Michael Jordan's 23XI Racing team sues NASCAR and CEO Jim France

Michael Jordan’s NASCAR team, 23XI Racing, and fellow team Front Row Motorsports filed an antitrust lawsuit against NASCAR and CEO Jim France on Wednesday, arguing that they have used anticompetitive practices to prevent fair competition in the sport.

“Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and, most importantly, fans,” 23XI Racing and Front Row Motorsports said in a joint statement.

23XI Racing was founded in 2020 by NBA legend Jordan, driver Denny Hamlin and Jordan’s longtime business partner, Curtis Polk. Front Row Motorsports, meanwhile, is owned by Bob Jenkins and has been racing full time since 2005.

The suit alleges that NASCAR and France operate without transparency, have stifled competition, and control the sport in ways that unfairly benefits them at the expense of team owners, drivers, sponsors, partners and fans.

The two teams take issue with the fact that NASCAR does everything from buying the premier racetracks that are exclusive to its races to allegedly requiring teams to buy their parts from a single-source suppliers chosen by NASCAR. They also are prevented from participating in any other stock car races.

The suit said teams are struggling to make reasonable profits, while investors must put tens of millions of dollars into the team.

Jenkins, of Front Row Motorsports, said he’s been in the business for 20 years and has yet to make a profit.

“We need a more competitive and fair system where teams, drivers and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league,” he said.

Meanwhile, the suit alleged, NASCAR is not facing the same financial issues. Last November, the company signed a new seven-year media deal with Fox, NBC, Amazon and Warner Bros. Discovery valued at $7.7 billion, a 40% increase over its previous deal.

Unlike most pro sports leagues, which are owned and operated by their teams and team owners, NASCAR is privately owned and operated by the France family.

“No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices,” the suit said.

The financial challenges have led to high turnover among teams. Of the 19 team owners that were originally granted charters in 2016, only eight teams remain in the sport, according to the suit.

It can cost about $18 million per year to run one chartered team for a full season of Cup Series races, the suit said.

Even with four charters and 14 Cup Series championships, Jeff Gordon, Hendrick Motorsports vice chairman and a former NASCAR driver, said his race team has not had a profitable season in years, and he has “a lot of fears that sustainability is going to be a real challenge.”

Jordan, a longtime racing fan, is the first Black majority owner of a full-time racing team in the NASCAR series since legendary driver Wendell Scott.

“Today’s action shows I’m willing to fight for a competitive market where everyone wins,” Jordan said in a statement. “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors, and fans.”

Jordan’s team, led by driver Tyler Reddick, won its first regular-season championship last month, in its fourth year of existence. He currently sits in ninth place in NASCAR’s standings.

23XI Racing and Front Row Motorsports said they will seek discovery from both NASCAR and France, and will seek damages for the anticompetitive terms they said they have been subject to under the 2016 charter agreement.

The teams are being represented by one of the most prominent sports lawyers in the country, Jeffrey Kessler, co-executive chairman of Winston & Strawn.

Kessler said they will file a preliminary injunction to enable the teams to race in the next calendar year while continuing to pursue antitrust litigation.

NASCAR did not immediately respond to a request for comment on the suit.

Disclosure: NBC and CNBC are owned by Comcast’s NBCUniversal unit.