NASCAR registered a massive win in their anti-trust lawsuit last Friday against Michael Jordan and Co. 23XI and Front Row Motorsports had filed a request for a preliminary injunction against the organizing body, seeking to retain their charters for next season as they battled NASCAR in the court. But a ruling by a U.S. District judge in Charlotte, N.C. denied their request.

Hence, both teams face the fate of competing as “open” teams next year, which means missing out on certain races and significant revenue. This will have repercussions on the pockets of the owners and as such they face a tricky long-term problem according to NASCAR insider Brett Griffin.

On the Door Bumper Clear podcast, Griffin discussed how drivers at 23XI could be left without funding if no compromise is reached on their charter situation. “As of right now, it’s going to happen at 23XI next year because if they don’t have these charters, somebody’s going to have to come up with three or four million dollars per car to compete. And it’s fortunate that they have a guy like Michael Jordan that allows them to do that,” he said.

Team 23XI and FRM filed an injunction where the aim was to maintain their pre-existing charter until the end of the lawsuit. They had argued that they could miss out on revenue share and struggle financially if NASCAR denied them a chance to compete as charter teams. However, the court stated that the teams did not meet their burden of proof in an eight-page-long release and dismissed the injunction request.

“Plaintiffs have not alleged that their business cannot survive without a preliminary injunction. Instead, they allege that their businesses may not survive without a preliminary injunction,” U.S. District Judge Frank Whitney said. So what does this mean for 23XI and FRM?

Both parties argued in court that this denial of the injunction would lead to the loss of sponsors. This will indeed become a reality if the team loses its charter and chooses to battle on the tracks as an open team. Not only that, this can severely impact the revenue generation of the team, keeping in mind that the sponsor agreements always mention that the teams have to run all the races.

As such it will become imperative for Michael Jordan and others to shell out their money and invest in their team. Given Jordan’s monetary success and a reported net worth of over $3 billion, it might not be a very hard thing to do. However, it can impact the financial health of the team in the long run because they could be working without sponsors. Additionally, they receive no money from NASCAR since they won’t be a chartered team. Simply speaking, it won’t be sustainable. 

As “open” teams they will earn less than a third of what a chartered team makes for competing in a race. FRM team owner Bob Jenkins claimed in the original injunction that as an open entry the payout from the purse would be so that it would not cover the costs of going to the racetrack. Thus the long-term future of both the teams is at risk.

Reacting to the injunction denial, teams’ attorney Jeffrey Kessler tweeted, “We are pleased with the court’s decision to expedite discovery and fast track the schedule in our case against NASCAR. Although we are disappointed that the preliminary injunction was denied without prejudice and as premature, which we intend to appeal, this denial has no bearing on the merits of our case.”

After the district court’s ruling, 23XI Racing and Front Row Motorsports have decided to file an appeal to the U.S. Court of Appeals to keep their racing future alive. Kessler and law firm Winston & Strawn LLP filed the notice on November 12.

Meanwhile, Jordan and his partners also received a warning from Kenny Wallace, who cited NASCAR’s connections in Washington DC.

Kenny Wallace warns Michael Jordan and Team 23XI of NASCAR’s strong influence

It seems the warnings from NASCAR insiders are piling in. Even Kenny Wallace is wary of the situation and chimed in. Speaking of how this might be a fatal move and Team 23XI might fail miserably from the lawsuit, Wallace took to his X account. The post read, “I hate it for them, but I said, man, be careful. NASCAR’s got friends in Washington DC; they know what they’re up to, Richard Petty and the gang; they tried to do this stuff years ago, but the injunction failed. The judge ruled yesterday on Friday, so right now Michael Jordan, 23XI, and Front Row are O and 3. It means they have tried to go against NASCAR three times and they have lost all three times”.

Wallace has pointed out that this has happened in the past as well. A similar situation occurred when Kentucky Speedway brought an antitrust lawsuit, arguing that they were unfairly excluded from hosting races. However, the court sided with NASCAR. It stated that, as the governing body, NASCAR has the authority to choose the venues and locations where they hold their events. This decision underscored NASCAR’s right to control race scheduling and venue selection as part of its regulatory powers.

Given that NASCAR is already in the upper hand and the ruling has been in their favor till now carves a detrimental image for Team 23XI. The current situation is indeed precarious for Team 23XI, and this could potentially indicate that in the upcoming 2025 season, they will run as “open teams”.