Front Row Motorsports and 23XI Racing are embroiled in a legal dispute with NASCAR over charter agreements, raising significant concerns about their future in the sport.
Legal Battle Overview
Just two days after the latest Cup Series race at Daytona, NASCAR announced plans to sell charters previously held by 23XI Racing and Front Row Motorsports to an undisclosed party. In redacted filings, NASCAR indicated that an agreement was pending the outcome of a hearing scheduled for August 28. The organization claimed that operating without 36 chartered teams would cause irreparable harm to the 2026 NASCAR Cup Series season, although the specific reasons were not disclosed. An earlier court ruling had mandated that NASCAR recognize the teams as if they were chartered, but that decision was subsequently overturned, allowing NASCAR to negotiate with interested parties regarding the charters.
Teams’ Response
The teams are actively seeking a new injunction from the court to compel NASCAR to treat them as chartered, which would enable them to receive dividends. In response to the potential sale of the charters, 23XI Racing and Front Row Motorsports filed a counterclaim, arguing that such a move would jeopardize their businesses before the scheduled trial on December 1. The teams stated, “Plaintiffs will indisputably suffer irreparable harm if NASCAR is allowed to carry out its plan to immediately sell their charters to other entities before trial, because that would put 23XI and Front Row out of business following the 2025 Cup Series season.” They further noted that the court had already determined that racing as open teams is not economically viable in the long term.
Charter Agreements and NASCAR’s Position
Currently, NASCAR possesses six charters, which were evenly distributed between 23XI Racing and Front Row Motorsports. NASCAR contends that since the teams never signed the charter agreement and the charters were returned, it has the right to sell them to other interested parties. The teams allege that NASCAR is attempting to impose one-sided charter agreements and has acted unlawfully by excluding competition. They criticized NASCAR’s practices, claiming that teams were compelled to accept below-market prices, akin to college or UFC athletes in similar situations.
Upcoming Court Proceedings
The parties involved are scheduled to return to court later this week, where the teams will seek an injunction to prevent NASCAR from selling the charters until the case is resolved. A trial is set for December 1. The teams expressed concern over NASCAR’s opposition, which they claim is filled with personal attacks rather than addressing the merits of their antitrust claims. They remarked, “None of these attacks have anything to do with the merits of plaintiff’s antitrust claims against NASCAR or plaintiff’s pressing need for a preliminary injunction.”
Background on Charter System
The dispute traces back to 23XI Racing and Front Row Motorsports’ decision not to sign a charter agreement with NASCAR. The charter system was introduced in 2016, providing teams with guaranteed participation and financial incentives similar to the Teams Racing Charter in Supercars. As the 2024 agreement approached renewal, teams expressed dissatisfaction with the dividends offered. When it was time to sign, both 23XI Racing and Front Row Motorsports rejected the terms and initiated legal action against NASCAR. As it stands, these teams are unchartered and compete as open entries, while 13 teams hold charters.
Antitrust Claims
The teams have also pursued legal action citing violations of federal antitrust laws. NASCAR has argued that it does not operate as a monopsony because it allows teams to race in the adjacent CARS Tour, which is owned and operated by notable figures such as Dale Earnhardt Jr. And Kevin Harvick. However, the teams counter that the CARS Tour represents amateur-level competition and poses no real threat to NASCAR. They stated, “The cases NASCAR cites to argue against its monopsony power are off point. They involve markets for amateur auto clubs, dirt track racing, or an entertainment output market that have no relevance to the input market for premier stock car racing that Plaintiffs have proven in this case. NASCAR cannot seriously argue that dirt track or amateur racing are substitutes for the top-tier stock car teams competing in the Cup Series.”