NASCAR driver Denny Hamlin and basketball icon Michael Jordan, who co-own 23XI Racing, have teamed up with Front Row Motorsports to initiate a federal antitrust lawsuit against NASCAR. This significant legal action, highlighting the Denny Hamlin NASCAR lawsuit, began its trial phase earlier this week and could have lasting consequences on the structure of the sport.
The lawsuit, filed last October, challenges the fairness of NASCAR’s charter system and its business practices. Hamlin and Jordan argue that the current system undermines competitive parity and financial sustainability for teams by limiting revenue distribution and imposing inflexible regulations. They allege that NASCAR exercises overwhelming control, placing teams at a financial disadvantage as a result.
Lawsuit Driven by Charter System Changes and Financial Strains
The principal point of conflict is the recent reworking of charter agreements set to take effect in 2025. NASCAR’s charter system, established in 2016, functions similarly to a franchise model—granting teams automatic entry into races and a guaranteed share of prize funds. However, the 23XI Racing ownership contends that the revised payout under the latest agreement is insufficient to sustain operations, especially given the rising costs of running a competitive team.
During the trial’s second day, Denny Hamlin took the stand, explaining that operating a single car throughout NASCAR’s 38-race season requires about $20 million. Meanwhile, the anticipated revenue from the new charter payout is pegged at roughly $12.5 million, creating a substantial financial shortfall for teams that do not secure extensive sponsorships. Hamlin described the situation in stark terms, stating,
“I didn’t sign because I knew this was my death certificate for the future. I have spent 20 years trying to make this sport grow as a driver and for the last five years as a team owner. 23XI is doing our part. You can’t have someone treat you this unfairly and I knew It wasn’t right. They were wrong and someone needed to be held accountable,”
Denny Hamlin said (via Associated Press).
Hamlin and Jordan’s argument extends beyond the charter system itself. They point to NASCAR’s substantial ownership of Cup Series racetracks and its move to restrict which companies can supply parts for the Next Gen race cars, introduced in 2022. According to the plaintiffs, this approach limits marketplace competition and drives up costs, further shaking the long-term stability of team operations.
Accusations of Monopoly Power and Financial Inequity
23XI Racing and Front Row Motorsports, seeking $205 million in damages, accuse NASCAR of deploying a structure that maximizes profits for the sanctioning body and its leadership, predominantly the France family, while squeezing team owners financially. Citing evidence raised in the trial, about three-quarters of Cup Series teams posted net losses in 2024, even as nearly $400 million reportedly flowed over three years to the France family’s trust.
The plaintiffs describe NASCAR’s grip over racetrack ownership and race car components as monopolistic, reducing both business flexibility and the incentive for investment by new or existing team owners. They maintain that without substantial revision to the revenue distribution model and regulatory approach, teams will face an increasingly precarious future.
What This Legal Battle Means for NASCAR’s Future
This contentious trial is expected to last two weeks, though the losing side is anticipated to pursue appeals that could extend the litigation for years. The outcome holds the potential to reshape how profits are distributed among NASCAR teams and may prompt significant operational changes. As teams, sponsors, and fans await a verdict, the Denny Hamlin NASCAR lawsuit underscores deep-rooted strains between team owners and sanctioning body leadership, with ripple effects likely to influence the entire Cup Series landscape for seasons to come.
