NASCAR’s long-drawn saga over the new charter deal finally came to a close last month. Or so they thought. 13 out of the 15 teams agreed to the new terms, with some of their demands not met. The two teams that stood on the fence included  Bob Jenkins’s Front Row Motorsports and Denny Hamlin and Michael Jordan’s co-owned 23XI. The two teams have now filed an anti-trust lawsuit against NASCAR and it has led to a ripple effect with many drivers and team owners speaking up for change.

The lawsuit argues that NASCAR is only looking after its own interests much to the detriment of the racing teams and the drivers. Hendrick Motorsports’ Kyle Larson brought up the issue of salaries in NASCAR and how it has lagged behind other sports in the US. He has now found an ally in Denny Hamlin who agrees with his opinion and predicted the detrimental outcomes if NASCAR doesn’t bring about systemic change to the business aspect of the sport.

Teams can only do so much with financial constraints, says Denny Hamlin

The big point of debate over this charter dispute is how NASCAR operates the sport financially. Although the charters allow the teams to draw from the revenue purse, it hasn’t resulted in sustainable business prospects for the team. Rather, they still heavily rely on the sponsorship money to help them mitigate the cost of running the race teams. This has led to many teams taking the exit route, Stewart Haas Racing being the most recent example of that.

As per reports from the New York Times, the Cup Series team has to shell out $18 million a year to run a single-car team. At 23XI Racing, Hamlin has to take care of two teams and is on the verge of expanding to a three-car team in 2025. Not to forget, the team also built a massive new race shop, AirSpeed, to help fuel their expansion in NASCAR. But they can only do so much as they wouldn’t want to end up like the SHR being forced to the brink of bankruptcy, while NASCAR gets a bigger slice of the pie.

And driver’s salaries being one of the biggest expenditures for a race team, they are expected to be the ones to take a fall when things go south. This is what Denny Hamlin stated while speaking on the Actions Detrimental podcast. “I think that Kyle Larson’s right, William Bryron’s right, Michael McDowell’s right all those guys spoke a little bit about it when I asked this week, and why the drivers should care is because when the teams are healthy, we’re gonna pay more for their services.”

Even though only two teams are involved in the anti-trust lawsuit, it is likely to have implications that will affect everyone involved right from the team owners to the drivers. During the charter negotiations, teams had four demands. A larger share of the revenue, a say in the governance issues, a cut on business deals NASCAR does that use team or driver likenesses, and for charters to become permanent, to allow stability.

Teams will get increased revenue from NASCAR’s new seven-year  $7.7 billion deal with the annual payment increased to around $8.5 million from $4-$5 million for the last-place charter holder. The seven-year charter agreement also comes with a seven-year option, but as far as getting a share of NASCAR business deals and having a seat on the table for executive decisions, there is no development.

With reduced chances of enhancing revenue, teams will also be keen to protect their investments which can affect the salaries of those working for them. Under the new charter agreement that problem doesn’t appear to go away.

“Team mechanics, their salaries have gone down; crew chiefs have gone down. Everyone in our sport has gone down, except for one party, and that’s the party that’s on the other end of this lawsuit. So everyone should care because the teams have shouldered the burden of our revenue going down and down over time. What happens is your drivers are your biggest ticket item. So you pay the drivers, which you can afford to pay them,” Hamlin added.

Hamlin’s comments echo the sentiment shared by Kyle Larson a few days back. Even though only two teams are involved in the lawsuit, Larson believes it might eventually involve every team. “We’re probably one of the only sports, if not the only sport, that the athlete’s salary has gone down in the last couple decades. I think you look at yearly, most athletes’ salaries and stuff are going up, not just athletes, but coaches, staff members, everybody in the sport,” Larson said.

According to Planet F1, NASCAR lags behind Formula 1 by a great deal when it comes to driver salaries. An F1 driver on average makes  $14.5m annually compared to the $4.5 million per year earned by a NASCAR driver.

Larson also showed his appreciation for 23XI and FRM for standing up to NASCAR. He mentioned, “It’s cool to see somebody stand up to a huge corporation. Obviously, I would love to see our teams making more money because I think that helps the overall health of our sport. I definitely give kudos to Front Row and 23XI for sticking up for what they believe.”

William Byron also appeared to throw his support behind the anti-trust lawsuit while talking to Frontstretch’s Bryan Nolen and Caleb Barnes. The HMS driver said, “I won’t really go into details but overall the perspective of the sport and what they’re fighting for and what that means, I think in the long term I’d like to see our sport become more prosperous. I feel like in watching other professional sports and where we could be, I’m excited for that so hopefully that comes to fruition.”

The anti-trust lawsuit filed by 23XI and FRM could be a game changer in not only NASCAR but the motorsports landscape. But what was said in the lawsuit? What are Michael Jordan and Co. holding out for?

The anti-trust lawsuit accuses NASCAR of monopoly and anti-competitive actions

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The new charter agreement apart from allowing NASCAR to keep the revenue from any business deals they make, also makes a provision for the France family, which owns the series, to buy a charter. In the lawsuit filed by 23XI and FRM, the family has been called out for its policies.

A part of the lawsuit filed on October 2 read, “The France family and NASCAR are monopolistic bullies. And bullies will continue to impose their will to hurt others until their targets stand up and refuse to be victims. That moment has now arrived.” While 13 teams agreed to sign the new charter deal, many of them claimed to do so under pressure or they were simply tired of the long drawn out negotiations.

The lawsuit claims NASCAR’s various anti-competitive actions are detrimental to the sport. It claims that policies such as prohibiting teams from participating in races outside of NASCAR, mandating that teams buy parts exclusively from NASCAR-selected suppliers, and exclusive agreements imposed on NASCAR-sanctioned tracks are monopolistic.

NBA icon Michael Jordan also released a statement saying he wants a more competitive field and how the current system doesn’t promote fairness.

“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. Today’s action shows I’m willing to fight for a competitive market where everyone wins,” he said.

They have acquired the services of  Jeffrey Kessler, a top antitrust attorney, who is known for winning a landmark equal pay settlement for members of the U.S. women’s national soccer team. He has also represented athletes in all four major professional North American sports.

Meanwhile, NASCAR has responded by hiring renowned attorney Chris Yates in their legal battle. Yates has worked with UFC, U.S. Soccer Federation, and other prominent associations.

The battle lines have been drawn and it seems there is no backing down from 23XI and Front Row Motorsports. Whatever the outcome, it could possibly change the landscape of NASCAR as we know it.