NASCAR Trial to Begin in Michael Jordan Team Monopolization Suit

NASCAR will go to trial this week to defend itself against claims by Michael Jordan’s racing team that the organization holds monopoly power in the market for premier stock car team services.

Jordan’s team, 23XI Racing, alleges that NASCAR’s “charter” system for guaranteeing racing spots in the high-profile Cup Series is inherently unfair. Racing teams can’t compete at the top tier of the sport without accepting anticompetitive terms of the organization’s charter deals, 23XI and co-plaintiff Front Row Motorsports Inc. say.

The trial in the US District Court for the Western District of North Carolina could have wide-reaching implications for NASCAR, the racing organization run by the France family since 1948.

A verdict against NASCAR could result in damages, straining its finances, while an injunction could weaken its ability to enforce terms of charter deals.

“If there is a massive antitrust judgment finding what you are doing is anticompetitive and you have to pay damages for it, you’re going to really have to think long and hard before you continue that practice,” said David Gringer, an antitrust partner with WilmerHale who isn’t involved in the case.

Latham & Watkins LLP, which represents NASCAR, declined to comment. Winston & Strawn LLP, which represents Jordan’s team and Front Row Motorsports, didn’t respond to a request for comment.

Jury selection will begin Monday with opening arguments to follow. The trial could last two weeks or more.

Monopoly?

A verdict against NASCAR could also open the door for other parties to sue, including fans who claim they pay too much to attend NASCAR races and TV networks alleging that NASCAR overcharges for rights fees, Gringer said.

“And other teams could bring lawsuits as well,” he said. “The system, even if it’s not ordered to change by the court, could very well be deemed impractical to continue.”

Gringer added that Judge Kenneth D. Bell has “wide discretion” to issue various forms of injunctive relief to prevent the fruits of the alleged monopolistic behavior.

Jordan’s team and Front Row Motorsports sued NASCAR in October 2024, alleging the organization violated Section 1 and 2 of the Sherman Act.

Last year, Bell granted Jordan’s team a preliminary injunction that allowed them to race as charter holders, but the Fourth Circuit reversed the injunction.

Jordan’s team and Front Row fought to protect their charter status but Bell in September denied another injunction request, largely because the teams failed to show that they would face irreparable harm.

Bell also noted that NASCAR is committed to allow 23XI and FrontRow Motorsports to qualify for the rest of the Cup Series races in 2025.

“This will effectively maintain the status quo pending a final decision on the merits and any permanent injunctive relief following trial (that is, Plaintiffs will be able to race and the disputed Charters will not be sold or otherwise transferred),” Bell said in the September order.

The parties tried to reach a settlement but were unsuccessful.

Monopoly Claims

A key argument in the case is whether NASCAR rose to US prominence because of anticompetitive conduct or sound businesses decisions and investments over the past 77 years.

In November, Bell ruled for Jordan’s team and Front Row on a threshold legal issue, agreeing that NASCAR holds monopsony power in the relevant market, meaning it has control over prices and terms.

“This is a lot easier than the typical monopolization case because the market and monopoly power are already decided,” Gringer said. “The plaintiff here has already won on that issue. That’s huge.”

NASCAR argued that the teams lacked standing and failed to prove market power, and simply “gerrymandered” their market definition.

In a sports case, it’s often tough to distinguish whether the issue at hand is an actual business dispute or that it rises to the level of an antitrust claim, said Barbara T. Sicalides, a partner with Troutman Pepper Locke.

Here, the jury will determine whether the terms of NASCAR’s charter deals are so restrictive that they harm competition.

“There are a lot of people who think everybody is a monopolist, but the reality is, it’s legal to be a monopolist; it’s just not legal to obtain your monopoly or maintain your monopoly through anticompetitive conduct,” Sicalides said.

The case is 2311 Racing LLC v. NASCAR, W.D.N.C., No. 3:24-cv-00886.