As the 2025 NASCAR Cup Series season reaches its midpoint, the intensity isn’t just on the racetrack—it’s in the courtroom. A legal battle continues between 23XI Racing, Front Row Motorsports (FRM), and NASCAR over the structure of the sport’s business model. While most fans focus on lap times and playoff points, a broader fight is underway that could alter how teams operate for years to come.
The disagreement centers around NASCAR’s charter system—its rules, its fairness, and whether it gives teams a legitimate shot at financial and competitive sustainability. Recent legal developments, including a federal judge’s refusal to allow 23XI and FRM access to financial records from other major sports leagues, have added new layers to this growing controversy.
The Charter System Under the Microscope
Since 2016, NASCAR’s charter system has provided a guaranteed spot in each race for 36 teams, adding business security but also creating tension among newer or smaller organizations. 23XI Racing, co-owned by Denny Hamlin and NBA legend Michael Jordan, along with FRM, believes that NASCAR’s governance of the charter system limits fair competition and team value.
Their lawsuit alleges that NASCAR holds a monopoly, restricting opportunities for growth and transparency in how revenue is shared. The two teams argue that, compared to other professional sports leagues, NASCAR has been slow to modernize its approach to team finances and franchise equity.
The legal complaint claims NASCAR’s system is weighted in favor of legacy teams and offers limited flexibility for new entrants to thrive without relying heavily on NASCAR’s approval.
Judge Blocks Request for NFL, NBA, and F1 Financials
In an effort to strengthen their argument, the plaintiffs recently requested financial documents from other major sports organizations—namely the NFL, NBA, NHL, MLB, and Formula 1. The goal was to show how those leagues distribute revenue among teams or athletes and to draw comparisons that could position NASCAR’s practices as restrictive.
U.S. District Court judge in NY denies motion by 23XI/FRM to force NFL, NBA & NHL to comply with subpoena for financial info. Reasoning:
-It's confidential commercial info & disclosure would be harmful
-Info not relevant to case
-Much of league financial info already is public— Bob Pockrass (@bobpockrass) June 30, 2025
However, a U.S. District Court judge denied the request, calling the information confidential and not directly relevant to the case. The judge also noted that some of the requested financial data is already publicly accessible and does not justify compelling full disclosure from outside entities.
This ruling removes a potentially powerful angle from 23XI and FRM’s argument. Without those comparisons, they’ll have to rely more heavily on NASCAR’s own internal financial practices to make their case for change.
NASCAR Responds: It’s About Contracts, Not Monopoly
NASCAR President Steve Phelps addressed the lawsuit in a recent interview, where he pushed back against the notion that the league is acting like a monopolist. According to Phelps, the issue is not about competition law—it’s about contract terms.
“I’m not sure why they decided to sue,” Phelps said. “This isn’t about monopoly power. It’s a contractual matter.” He pointed to a 73% increase in team payouts under NASCAR’s new media deal as evidence that the league is actively supporting its teams, not suppressing them.
Phelps argued that monopolistic behavior would involve lowering revenue shares or restricting payouts—something NASCAR hasn’t done. Instead, he described the current structure as a way to keep teams financially stable while ensuring competitive balance.
Whether that logic holds in court remains to be seen, but NASCAR’s leadership has made it clear they view the lawsuit as both unnecessary and unfounded.
Trial Date Set, Stakes Are Massive
The federal trial is scheduled to begin on December 1, 2025, and could have wide-reaching consequences. If the court sides with NASCAR, the charter system will likely remain intact and teams like 23XI and FRM could face serious consequences—including losing their charters altogether. That would strip them of guaranteed race entries and reduce their revenue share under NASCAR’s new media deals.
On the flip side, if the court rules in favor of the teams, NASCAR may be forced to rethink its entire charter system, open the door to more transparent revenue sharing, or allow greater team input into business decisions. It could mark the beginning of a new era for how NASCAR teams are governed and compensated.
For 23XI Racing, which entered the sport with ambitious goals, and FRM, a long-time independent team, the lawsuit represents more than just money. It’s about fairness, sustainability, and having a seat at the table when decisions are made about the sport’s future.
News in Brief: Judge Sides with NASCAR in Monopoly Case
While fans eagerly await the action at this weekend’s Grant Park 165 in Chicago, another race—this one off the track—is quietly shaping the future of NASCAR. The lawsuit between 23XI, FRM, and NASCAR is more than just legal maneuvering. It’s a test of who holds power in modern motorsports and what the business side of NASCAR will look like going forward.
Whether it ends with reform or reinforces the status quo, one thing is certain: this legal battle is far from over, and the implications could be just as dramatic as anything we see on the track this summer.
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