The teams have filed suit over NASCAR’s charter agreement and will have the chance to appeal the decision.
Denny Hamlin and Michael Jordan’s 23XI Racing is challenging NASCAR over its charter agreement. (Photo by Chris Graythen/Getty Images)
A federal judge has denied 23XI Racing and Front Row Motorsports’ request for a preliminary injunction in its lawsuit against NASCAR.
The two teams filed suit against NASCAR over the charter agreement NASCAR offered its teams. Eight of the 10 franchised teams in the Cup Series signed the agreement while 23XI and FRM did not. The two teams then filed an anti-trust lawsuit against NASCAR, accusing the sanctioning body of monopolistic business practices.
The teams asked for an injunction so they could race as chartered cars in 2025 as the lawsuit continued. Chartered cars are guaranteed spots in every race and receive a larger share of the purse money than open cars do.
“At this time, Plaintiffs have not met their burden as required for a preliminary injunction,” U.S. District Judge Frank Whitney said. “Should circumstances change, Plaintiffs may file a renewed motion for preliminary injunction. Therefore, the Court denies Plaintiffs’ motion without prejudice. However, the Court intends to assign this case to the fast track as defined in this Court’s standing orders.”
Since the motion was denied without prejudice, the teams will have the opportunity to appeal the ruling. As part of its arguments for the injunction, 23XI, the team owned by Michael Jordan and Cup Series driver Denny Hamlin, said Monday that driver Tyler Reddick and the teams’ sponsors could be free to leave if the team didn’t have charters. Reddick is one of four drivers racing for the Cup Series title on Sunday.
Both Front Row and 23XI field two chartered cars in the Cup Series. Both teams have been planning to expand to three cars after the closure of Stewart-Haas Racing, but what happens with their purchases of each of the SHR charters they want to acquire are unclear. NASCAR has publicly stated that it is planning to operate with 32 chartered cars in 2025 instead of the 36 that have been a part of the original agreement.
If the teams do not appeal the ruling or the appeal is unsuccessful, it’s unclear what their outlook for 2025 is barring a settlement between them and NASCAR that allows them to run as chartered teams.
NASCAR and its teams agreed to the charter system in 2016 as a way for teams to have franchise value. Before charters, teams that shut down had no value and only parts and pieces to sell to other teams and prospective buyers. With a charter, a team that’s looking to downsize or exit the Cup Series altogether can receive millions from another team for the guaranteed spot in every race.
In 2023, Live Fast Motorsports reportedly sold its charter to Spire Motorsports for approximately $40 million after purchasing the charter for a fraction of that price two years earlier.
