Lawyer for race teams suing NASCAR lays his case

While the quotes provided during a Wednesday morning press conference were informative, the interview Jeffrey Kessler provided SiriusXM NASCAR Radio on Wednesday was downright candid.

Kessler is the lawyer representing both 23XI Racing and Front Row Motorsports, the teams that did not sign NASCAR’s final revenue sharing and sporting governance (charter) agreement extension and are now bringing forth an antitrust lawsuit against the sanctioning body.

The interview was conducted by Dave Moody, who works for NASCAR owned Motor Racing Network as a turn announcer, and also hosts a decade long daily talk show, SiriusXM Speedway, where this conversation took place.

What are the claims?

“So this is an antitrust case. The antitrust laws are laws that regulate fair competition. One of the things the antitrust laws prohibit is somebody getting a monopoly, which means you are the only competitor through unfair anti-competitive means.

“NASCAR is the poster child for being an illegal monopoly. It is, as all your fans know, the only premier stock car racing circuit in the country, maybe in the world and it’s got that position not by being the best or by investing money or by having the best thing out there that no one compete with.

‘No, it got there by acquiring its competitors tied up the racetracks so no one else could compete with it. Going to all the teams who are independent contractors and saying you can’t go race at anybody else’s races and imposing restrictions on the cars, that the teams can’t even take their NextGen car and put it in another race.

“So all of this gives them this monopoly power. And what do they do with that power? Well, they’re not like some kind of like benign dictator monopolist. This is what they do: They go to the teams on September 6th and they say to the teams, here is our take it or leave it offer to be a charter team in NASCAR. If you do not take it in the next hour, you are out, you’ll not get a charter. We might even get rid of the charters. We will destroy the whole economics of your organization. So what happens, 13 of the 15 race teams could not take that pressure. They said, well, if the alternative is this bully is gonna crush me if I don’t say yes, I guess I’m saying yes. Two teams had the ability, the fortitude, the resources to say, ‘I am not gonna take this anymore.’

“Someone has gotta hold NASCAR to the same laws that apply to all other businesses. So that was 23XI and Front Row. They hired me and that’s why we filed this case.”

Is NASCAR a monopoly because its privately owned?

Not by itself but it is the motivating factor for why it’s been run this way. Because when you look at it, what the France family has done, they run it as if it’s like their own personal fiefdom where all the revenues and all the profits and all these big TV deals and money should mostly go to them and what they offer to the teams, who by the way also pay the drivers.

“So it’s the teams and the drivers that end up getting just enough economic scraps that they can barely survive and a lot of them can’t survive. In 2016, of the 19 owners (part of the first charter agreement) 11 of them don’t exist anymore because they couldn’t survive under this system. Something has got to change.

“If the teams are gonna invest in this sport, if the teams are going to make a better product for the fans, if the teams are going to survive long term, they have to be able to have a fair chance if they’re successful to get some kind of fair return for their investment. This sport does not permit that because the France family run this monopoly to stifle it. That’s what has to change.”

So NASCAR hasn’t grown the sport?

“No, I’m not saying they’ve done nothing, right? I’m saying the way they have stopped the competitive process is through anti-competitive behavior.

“Nobody knows if stock car racing would be better, if stock car racing would be more innovative, if it would be more accessible to the fans, if it would be available at lower prices to the fans, if there was the breadth of competition allowed to come in. And what they have done is stifle all that competition.

“So we will never know if that world what it would’ve looked like going forward. We are going to see what competition can produce. What we know is in other sports, when competition has been introduced, it has gotten better for everyone. There’s been more product, there’s been better product, there’s been less expensive product. All of that happens. Would you let the fresh air of competition come in the door?”

Why did most teams sign the deal?

“My interpretation is, have you ever heard of the battered spouse syndrome? You’ll have someone who gets beaten, who gets abused, who stays in the relationship, and when the police show up to ask about it, they say, oh, it’s okay. It’s not so bad. I could keep living. I could …”

Hendrick, Penske and Gibbs don’t get pushed around

“I have spoken to some of those people. I’m not going to tell you who, okay? And what they say publicly is not what they say privately. Okay. Here’s what you might go back to ask them, how much profits did they make last year? How much did they make the year before that? How much do they think they’ll make next year? See what they say if they say anything.”

Why did Michael Jordan’s tune change about NASCAR in four years?

“They want to compete in nascar, right? They don’t want to close their teams, right? The 2025 charter agreement has a provision in it that says, ‘if you wanna go forward with this charter, you should give up your rights to bring a lawsuit to assert your antitrust rights.’

“That itself is an antitrust violation designed to protect this monopoly. So what we are seeking in our relief is saying they’ll sign the 2025 agreements because they want to compete. They wanna be there and they’ll sue.

“It’ll may take a year, it may take two years to get the trial, but they can’t have as a cost that they give up their antitrust rights. So if we don’t get that injunction, they will compete as open teams, but you cannot compete as open teams for very long, right?

“You could start competing that way but because as bad as the economics are for the charters, you are talking about access to making tens of millions of dollars less if you try to compete as an open tea.. The system is not designed to make open competition a long-term viable way of competing.”

How do these parties coexist?

“I’ve done this in a lot of sports and the answer is, we expect both sides will continue to do business while they’re in lawsuits together.

“You know, I’ve represented, you know, for example, the NFL players and the union who stopped being a union for three and a half years while they were in antitrust litigation and did not have a collective bargaining agreement and they just had to get along and keep doing their jobs.

“That’s what we expect people will do here. There are a lot of companies out there who’ve had cases where they’ve had employees sue them, but the employee still works for the company. You have to do your job and go forward.”

Will the teams make any compromises?

“Front Row and 23XI did not bring this case to take like a D+ deal and settle for like a D- deal. The changes have to be significant and transformative. They are willing to sit down in a settlement, talk with NASCAR and work out what that is.

“So there could be compromise but it has to be fair to both sides. I just did this in college sports, you know, I was one of the two prime negotiators for the classes of athletes that have created the new system that hopefully is a move forward in college sports. That system is a compromise but it was fair to everyone. That’s the type of change that would have to happen here.”

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