23XI Racing drivers prepare for an event amid charter status dispute.
In a setback for 23XI Racing and Front Row Motorsports, the ongoing 23XI Racing charter status dispute has escalated after a federal court declined their request for a rehearing, potentially forcing the teams to compete without guaranteed entries as early as next week at Dover Motor Speedway. This ruling from the Fourth Circuit Court of Appeals has put their future as chartered teams in jeopardy, jeopardizing their financial stability and season plans as legal uncertainty continues.
Court Decision Threatens Charter Status
On Wednesday, the Fourth Circuit Court of Appeals refused to grant a full rehearing to 23XI Racing and Front Row Motorsports, teams co-owned by Denny Hamlin and Michael Jordan, effectively setting the stage for their demotion to open team status. Charters, which provide financial incentives and automatic starting spots, are vital in NASCAR‘s Cup Series. Without charter status, these teams will earn significantly less per race and must qualify for each event, rather than being guaranteed a spot on the starting grid. Currently, the threat of missing races due to overfilled entry lists is low, but the loss of charters still signals financial and competitive uncertainty.
Jeffrey Kessler, attorney for 23XI Racing and Front Row Motorsports, expressed clear disappointment at the outcome:
Image of: 23XI Racing
“We are disappointed by the Fourth Circuit Court of Appeals decision to deny our request for a full rehearing,”
—Jeffrey Kessler, attorney for 23XI Racing and Front Row Motorsports. He also emphasized ongoing dedication to their legal strategy:
“This decision has no bearing on the strength of our antitrust case, which we look forward to presenting at trial. We are committed to racing this season as we continue to fight for more competitive and fair terms for all teams to ensure the future of the sport, and remain fully confident in our case.”
This legal battle stems from 23XI Racing and Front Row Motorsports’ refusal to sign NASCAR’s updated charter agreement last year, a contract clause in dispute being one that prohibited teams from taking legal action against NASCAR. Thirteen other Cup organizations signed on, while 23XI Racing and Front Row Motorsports, citing fears over sponsor and driver retention, held out and subsequently sought legal protection to maintain their chartered status.
Teams Prepare to Race as Open Entries
Despite the appellate ruling, Denny Hamlin conveyed determination to remain on track this season, regardless of their charter situation. He told reporters,
“Same as what we said in December is that we’re committed to run this season open if we have to, even before they decided on the injunction,”
—Denny Hamlin, team co-owner and driver. Hamlin further stated,
“So we’re going to race and fulfill all of our commitments no matter what. We’re here to race. Our team is going to be here for the long haul and we’re confident of that.”
Without charters, six cars—three from each organization—may lose their guaranteed participation in each race starting at the Dover event on July 20. The drivers directly affected include Tyler Reddick, Bubba Wallace, and rookie Riley Herbst for 23XI Racing, along with Todd Gilliland, Zane Smith, and Noah Gragson for Front Row Motorsports. Zane Smith commented on this situation, stating,
“We’re all just focused on our jobs and allowing the lawyers to kind of take care of that side,”
—Zane Smith, driver, adding,
“With this charter change, we often don’t see 40-plus cars (per race) so I don’t know what it will look like … but I know I’ll still have the same tools every Saturday for practice and qualifying and same for the race and my seat is not going to change. Just trying to stack up some good runs and hopefully get (Front Row Motorsports car owner) Bob Jenkins a win here shortly.”
Context Behind the Legal Battle
The legal struggle began last November when 23XI Racing and Front Row Motorsports requested an injunction to participate as charter teams while challenging the charter agreement’s terms. Their lawyer used Tyler Reddick’s situation as an example of the potential fallout, arguing,
“So right here, for example, 23XI has a driver who might be the champion this year. He will be in the finals next week. Says if we do not have a charter, he is free to leave. He could be the number one driver. We will never be able to get him back if we do not have a charter,”
—Jeffrey Kessler, attorney for 23XI Racing and Front Row Motorsports. This highlighted the high stakes in the dispute, particularly regarding the potential loss of top drivers should charter status be revoked.
U.S. District Court Judge Kenneth D. Bell initially sided with the teams, granting a preliminary injunction on December 18 and asserting in his opinion,
“NASCAR fans (and members of the public who may become fans) have an interest in watching all the teams compete with their best drivers and most competitive teams,”
—Kenneth D. Bell, U.S. District Court Judge. However, on June 5, a three-judge federal appellate panel vacated that injunction, and the ruling was set to take effect after the teams’ unsuccessful appeal to the full court this week. The panel’s position was made clear at a May 9th hearing, with one judge stating,
“If you don’t want the contract, you don’t enter into it and you sue. Of if you want the contract, you enter into it and you’ve given up past releases. But … you can’t have your cake and eat it too,”
—Federal appellate judge.
The recent procedural decisions represent only part of the broader lawsuit 23XI Racing and Front Row Motorsports filed against NASCAR and NASCAR CEO Jim France. The central issues are scheduled for trial on December 1, when the teams will further argue their antitrust claims and seek more equitable terms within the sport.
Implications for Teams and the Future of NASCAR
The immediate impact of the Fourth Circuit’s denial is that 23XI Racing and Front Row Motorsports may lose charter status as soon as next week, fundamentally altering their season. For NASCAR, this development comes at a time when maintaining strong competition and stable teams is crucial for fan engagement. Key names—drivers like Tyler Reddick, Bubba Wallace, and Noah Gragson, and leaders like Denny Hamlin and Michael Jordan—underscore the high level of talent and investment at stake.
As the 23XI Racing charter status dispute continues, teams are prepared to race regardless of outcome, intent on keeping their commitments to drivers, sponsors, and fans alike. Meanwhile, the motorsports world will be watching closely as this case heads to court, with its result likely shaping the future dynamics between NASCAR, teams, and their legal agreements for seasons to come.
Our Reader’s Queries
Q. Who is the CEO of 23XI Racing?
A. Michael Jordan, a Hall of Fame basketball player, owns and runs it with Denny Hamlin, a driver who has won the Daytona 500 three times.
