In a legal fight with wide-reaching implications for the NASCAR industry, Michael Jordan’s 23XI Racing and Front Row Motorsports (FRM) are at risk of losing their charter status and possibly even being forced out of business as their antitrust lawsuit against NASCAR advances.
Recent Developments
As of mid-July 2025, both teams have filed new documents in federal court seeking a temporary restraining order and preliminary injunction to prevent NASCAR from immediately stripping or selling their charters while the court case is pending. This action follows a key setback: on July 9, the U.S. Court of Appeals for the Fourth Circuit denied the teams’ request to keep their charters during the litigation, siding with NASCAR on the so-called “release clause” in the 2025 charter agreement.
Court documents argue that, without the injunction, NASCAR could revoke the teams’ charter rights as soon as July 16 and “immediately move or sell their charters to other entities — putting 23XI Racing and Front Row Motorsports in irreparable jeopardy of never getting their charters back and going out of business”. If stripped of charter status, they would lose their guaranteed starting spots and a substantial share of TV revenue, making it nearly impossible to operate at current levels and potentially forcing layoffs or closure.
The teams’ lawyer, Jeffrey Kessler, emphasized the seriousness, stating:
“If the temporary restraining order and preliminary injunction aren’t granted, the six cars fielded by the two organizations wouldn’t be guaranteed starting positions … and may also have to repay the money they received through the season’s first 20 races.” – Jeffrey Kessler
Why the Lawsuit?
In October 2024, 23XI and FRM filed an antitrust lawsuit against NASCAR, alleging that the sanctioning body’s charter system and business practices violate antitrust law and unfairly limit team autonomy and revenue. Crucially, NASCAR’s 2025 charter agreement includes a clause requiring teams to release potential legal claims—a key sticking point that led these teams to refuse to sign, triggering the conflict.
NASCAR’s Position
NASCAR has criticized the teams’ latest court filing as “another unnecessary and inappropriate preliminary injunction” and maintains that it has made numerous offers to resolve the dispute out of court. NASCAR asserted in a statement:
“We will defend NASCAR’s integrity from this baseless lawsuit … We remain focused on collaborating with the 13 race teams that signed the 2025 charter agreements and share our mutual goal of delivering the best racing in the world each week, including this weekend in Dover.”
“NASCAR says the teams have alternative options—running as open teams without guarantees or the full revenue share—and that any damages could be recovered if the teams prevail later in court.” – NASCAR
Potential Fallout
If the injunction is not granted:
23XI Racing (owned by Michael Jordan and Denny Hamlin) and Front Row Motorsports (owned by Bob Jenkins) could lose their charters within days, possibly leading to the sale of those assets to other organizations.
Both teams would run as “open” entries, with no guaranteed spots in races and limited purse and TV revenue, putting 100+ jobs and millions in investment at serious risk.
Drivers like Bubba Wallace, Tyler Reddick, and Todd Gilliland could find themselves needing new rides if their teams cannot sustain operations.
NASCAR’s Cup Series field, which was set to have 32 chartered teams and eight open cars in 2025, could see new entrants or consolidation if charters are reallocated.
If the injunction is granted, the teams would keep their charters while the case proceeds to a jury trial tentatively scheduled for December 2025.
Broader Industry Impact
This legal battle raises critical questions about the future of the charter system, team autonomy, and the balance of power within NASCAR. Denny Hamlin, co-owner of 23XI and an active driver, recently admitted their entire 2025 plans hinged on this issue. The case is being closely watched throughout the garage for its implications on sponsorship, team stability, and revenue share models.
News in Brief: Michael Jordan’s NASCAR Team Risks Collapse
NASCAR is required to respond to the teams’ latest emergency court filing by July 16, with the judge expected to rule on the injunction request soon after. Until a verdict, both teams race under a cloud of uncertainty, and the possibility remains that the high-profile antitrust suit could reshape NASCAR’s economic and operational landscape moving forward.
23XI Racing and Front Row Motorsports are in a legal and existential battle over charter rights and NASCAR’s business model, with court decisions in the coming days set to determine the immediate future of both teams and potentially the broader structure of the sport.
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