Home/NASCAR

via Getty

via Getty

0
  Debate

Debate

Is Michael Jordan's legal battle with NASCAR a game-changer for the sport's future?

A historic season for Michael Jordan co-owned 23XI is getting overshadowed by the ongoing lawsuit. Tyler Reddick, the driver of the No. 45 Toyota Camry XSE, will compete in the Championship 4, hoping to land his and his team’s first championship. But as the excitement towards the season’s climax builds, 23XI and Front Row Motorsports are engaged in a tug-of-war with NASCAR, which is seeing a new twist every day.

A lot has been said about the new charter deal offered by NASCAR, which was signed by 13 teams, with 23XI and FRM opting out. Though their request for a seat on the executive table and permanent charters was denied, they were offered an increase in revenue share. Rick Hendrick, the owner of the sport’s most successful team, went on to say, “I felt it was a fair deal, and we protected the charters, which was number one, we got the (revenue) increase.”

But 23XI and FRM in their anti-trust lawsuit argued NASCAR of being “monopolistic bullies” and said a fair deal was not offered to the teams. However, the sanctioning body’s attorney, Christopher Yates, has disclosed new details about the agreement, flipping the narrative surrounding the accusations.

ADVERTISEMENT

Article continues below this ad

The Latham & Watkins LLP representative said that under the new terms, teams would receive “nearly half of the TV revenue — that is not a small amount by any metric.”  With NASCAR signing a multi-billion dollar media rights deal worth an estimated $7.7 billion with NBC, Fox, Amazon, and Warner Bros Discovery from 2025 to 2031, it was only natural that teams would want a significant slice of the pie to make the sport more sustainable.

While not every stakeholder was happy with all the terms presented in the charter proposal, one team owner, who wished to remain anonymous said, “Even though it wasn’t a great deal, we took the deal because it is getting us more revenue.”

After years of intense negotiations, NASCAR issued an ultimatum to its teams over a charter deal. Just 48 hours before the opening playoff race at Atlanta Motor Speedway, the sport’s hierarchy offered a final proposal to its teams, giving them time until midnight to make a decision. The take-it-or-leave-it offer put owners in a spot, not only because there was no room for negotiations but it also came with conditions that meant the organization could not be held accountable in the court.

With the threat of losing their charters looming large, the majority of team owners gave in to NASCAR’s terms, except for Michael Jordan’s co-owned 23XI Racing and Bob Jenkins’ Front Row Motorsports, who accused NASCAR of using coercion tactics. However, as per NASCAR’s attorney Christopher Yates, teams had an additional source of motivation that prompted them to sign the agreement.

What’s your perspective on:

Is Michael Jordan's legal battle with NASCAR a game-changer for the sport's future?

Have an interesting take?

In many ways, revealing the financial terms being offered to the 13 NASCAR teams was a smart move by attorney Christopher Yates, as it not only flipped the narrative surrounding stakeholders being coerced but also highlighted the equitable terms being offered in return.

Meanwhile, Jordan and Co. appeared in Charlotte, North Carolina federal court on Monday, represented by their attorney Jeffrey Kessler. Kessler presented their case for a preliminary injunction to District Judge Frank D. Whitney as they now await the judge’s decision, which is expected to come by Friday.

Speaking to the media after the court proceedings, Jordan said, “Yeah, I put all my cards on the table. I think we did a good job of that.” He also addressed whether the ongoing saga will affect their team’s chances for the title-deciding race on Sunday in Phoenix.

“No, I’ve been in situations of disparity. I think the race team is going to focus on what they have to do this weekend, which I expect them to do. I think Jeffrey did an unbelievable job today, and I think I put all my cards on the table. I’m looking forward to winning a championship this weekend,” Jordan said.

Jeffrey Kessler mentioned said NASCAR has rescinded the charter agreements offered to 23XI and FRM in September. “We do not challenge the entire charter agreement. We want a return to status quo. We are not seeking a seven-to-14-year argument. Let us operate under the terms they offered for the duration of the (court) case and race under the charter terms for the duration of the case,” he said.

This move by NASCAR to disclose the revenue share details comes after they subtly threatened the very future of 23XI and FRM in response to the lawsuit.

“NASCAR has taken steps, consistent with its contractual obligations to other Charter Teams, to plan for a season with only 32 Charters,” was their response in the court to an injunction filed by 23XI and FRM. This means both the teams involved in the lawsuit could be forced to compete as open teams, thus missing out on significant revenue for the next season.

ADVERTISEMENT

Article continues below this ad

Christopher Yates dismisses the need for preliminary injunction

While Michael Jordan’s co-owned 23XI Racing and Front Row Motorsports would prefer keeping their charters, anti-trust attorney Jim Kessler has revealed that the teams could be willing to compete in the ‘open’ category if their preliminary injunction is denied. However, they would still want the clause where NASCAR cannot be sued on monopolistic grounds to be waived away, in order to compete in the Cup Series during the 2025 season while pursuing legal action.

However, NASCAR’s attorney, Christopher Yates, believes that the injunction request is too broad and the teams should compete in the open category, as they have done so with one-off cars in the past. Should the Michael Jordan-led lawsuit win the judgment, they could seek financial compensation from the sport’s hierarchy for the damages incurred during the 2025 season. However, Yates has made it clear that the sanctioning body no longer wants to sign a charter agreement with the two teams after they disparaged NASCAR publicly.

ADVERTISEMENT

Article continues below this ad

Having accused Michael Jordan, Denny Hamlin, and Bob Jenkins of making a “frontal assault to the charter system”, the attorney went on to say, “They have been calling NASCAR a series of names that undermine NASCAR’s brand and goodwill. NASCAR only wants to enter into charter agreements with teams who want to work collectively to grow the sport.

With just a few more days to go until the court reaches a verdict, both parties will be optimistic about their chances, believing that they have made a compelling case in front of Judge Frank Whitney.

Have something to say?

Let the world know your perspective.