It’s been exactly one week since 23XI Racing and Front Row Motorsports filed an antitrust lawsuit against NASCAR in federal court in North Carolina.
The two teams accused NASCAR and its CEO Jim France of “unlawful monopolization of premier stock car racing in order to enrich themselves at the expense of the premier stock car racing teams.” It’s not difficult to pinpoint where the lawsuit stems from, as 23XI and Front Row were the only two Cup Series teams to not sign NASCAR’s final charter proposal at Atlanta Motor Speedway last month.
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As for what led to both teams refusing to sign and then filing the subsequent lawsuit, 23XI co-owner Denny Hamlin explained the reasoning in detail during Monday’s “ Actions Detrimental ” podcast. Hamlin, a two-decade veteran of the sport, wants to see the investment he put back into the sport be recouped. That hasn’t happened, among other things, leading to this “important moment in our sport.”
Denny Hamlin opines on what led to lawsuit against NASCAR
“This is just something that I feel is an important moment in our sport,” Hamlin said. “For myself personally, I’ve invested a lot back into this sport to help put on NASCAR’s show. All I’ve asked them from the very beginning is show me an avenue where I can get that investment back. I’m not looking to bank a bunch of money or anything like that. Just show me a way that investment can be recouped, and I’ve not seen that yet. That is an issue. We heard NASCAR say, ‘Well we don’t want big investment companies coming into our sport. We want old drivers being car owners.’ They tried it and it failed for one reason or another.
“So, when does it stop? We brought out facts that in 2016, there were 19 charter members and 11 of those are gone. And so, I know it’s easy to live in the short-term and say, ‘Oh, we’re fine.’ It’s not fine. And the 2025 agreement binds the teams in such a way that there is no upside whatsoever. All the upside goes to one side and all of our rights are taken away. So, any way that we had in the past, a way or an avenue to at least use our rights that we created, brands that we created, IP that we created to then go get other revenue to supplement this thing called a racing team — those got taken away.”
Teams had been negotiating an extension of the original 2016 charter agreement for the last two years ahead of its expiration on Dec. 31. Teams made demands such as making charters permanent, which NASCAR refused to include in its proposals.
Denny Hamlin: ‘It’s just a broken system’
The final proposal came in at 6 p.m. ET on Friday, Sept. 6. NASCAR gave teams a six-hour deadline to sign, threatening to “eliminate the charter system altogether for 2025 and beyond” if they did not. 23XI and Front Row were the two holdouts among the 15 Cup Series teams.
“The take-it-or-leave-it offer from NASCAR included numerous one-sided, monopolistic economic terms that were far less than the teams would receive in a competitive market,” the lawsuit states. “It did not provide a fair split of revenues so that the teams would have a chance to earn a reasonable return on their investment. It seized control over team intellectual property rights, to be used for NASCAR’s benefit.
“Did not provide permanent charters so that the teams could realize value through permanent charter appreciation. It did not give teams the ability to resist unilateral NASCAR rules that increased team costs. And it did not give the teams any meaningful role in governance of the sport. It also imposed terms that would undermine the relationship between teams and drivers.”
23XI and Front Row have asked for preliminary injunction that will allow them to compete as chartered teams in 2025 while still proceeding with the lawsuit.
Hamlin believes people will soon understand “how broken this system is” if the case goes to discovery.
“It’s just a broken system and I wish people understood how broken this system is,” Hamlin said. “I think as time goes on and things get discovered, you will see more specifics on why we believe that this is an unfair system and an unfair agreement.”
The post Denny Hamlin takes NASCAR to task for actions that led to 23XI Racing lawsuit appeared first on On3 .
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