Michael Jordan's race team just scored a major win against NASCAR

A federal judge on Tuesday issued a key victory for two race teams, one owned by Michael Jordan, that further pressures NASCAR to settle the antitrust lawsuit filed against it by 23XI Racing and Front Row Motorsports.

NASCAR Commissioner Steve Phelps said last week the series is "trying our hardest" to settle the federal antitrust lawsuit with the two teams suing in the most expansive comments yet from the defendants.

U.S. District Judge Kenneth Bell ruled Tuesday in favor of 23XI, owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Bob Jenkins-owned Front Row, on an argument over the market definition of "premier stock-car racing." Bell found that NASCAR controls the market and NASCAR's argument that teams can race in other series is moot.

The teams said in alleging the relevant market for premier stock car racing teams that "NASCAR's Cup Series is currently the only buyer." The argument was backed by the the expert opinion of Dr. Daniel Rascher, who concluded that "premier stock car racing" is a distinct form of automobile racing, and other types of motorsports like Formula 1 and IndyCar, and all lower levels of stock car racing, are not an equal substitute to NASCAR.

NASCAR in a counterclaim said the teams unlawfully conspired in banding together for negotiations on new charter agreements, but Bell found "NASCAR deliberate(ly), clear(ly) and unambiguous(ly)" alleged that the relevant market is "the market for entry of cars into NASCAR Cup Series races in the United States and any other location where a Cup Series race is held."

"The same transaction - the sale and purchase of premier stock car racing services - cannot be a different relevant market depending only on which side is complaining," Bell wrote. "Most simply put, NASCAR made a strategic decision in asserting its Counterclaim and must now live with the consequences."

The lawsuit was filed a year ago by 23XI Racing and Front Row Racing when they were the only two organizations out of 15 to not sign extensions on new charter agreements.

The new charter agreements were presented to the teams at the start of the 2024 playoffs with a deadline for them to sign. It followed more than two years of tense negotiations over the charters, which are at the heart of NASCAR's business model as they guarantee revenue and access to weekly races.

23XI and Front Row likely will go out of business without them and are racing this season unchartered, which comes with significantly reduced prize money.

Other teams have called for a settlement to move forward, but mediation sessions and private negotiations have not worked. The trial is scheduled for Dec. 1.

"We are very pleased with the Court's decision today, ruling in our favor. Not only does it deny NASCAR's motion for summary judgment, but it also grants our partial summary judgment motion, finding that NASCAR has monopoly power in a properly defined market," said Jeffrey Kessler, the attorney representing 23XI and Front Row.

"This means that the trial can now be focused on whether NASCAR has maintained that power through anticompetitive acts and used that power to harm teams. We're prepared to present our case to the jury and are focused on obtaining a verdict that benefits all of the teams, partners, drivers, and the fans."

NASCAR in its own statement touted the commitment it has shown into building NASCAR into the top motorsports series in the United States since its 1948 formation. Phelps did the same last week while reading from a statement that ran more than six minutes; he defended the Florida-based France family who founded and controls NASCAR and most of the tracks the series uses for events.

"NASCAR looks forward to proving that it became the leading motorsport in the United States through hard work, risk-taking, and many significant investments over the past 77 years," NASCAR said in a statement. "The antitrust laws encourage this - and NASCAR has done nothing anticompetitive in building the sport from the ground up since 1948.

"While we respect the Court's decision, we believe it is legally flawed and we will address it at trial and in the Fourth Circuit if necessary. NASCAR believes in the charter system and will continue to defend it from 23XI and Front Row's efforts to claim that the charter system itself is anticompetitive."

Most of the organizations that did sign the new charter agreements last year submitted declarations to the court in support of the charter system and calling for a settlement to the case. All the teams want the charters to become permanent, which NASCAR refused to budge on during negotiations for the current agreement.

Should a settlement not be reached before the trial and NASCAR loses, the entire charter system is at risk of being disbanded or overhauled. Teams are frustrated by that threat, and it is understood that NASCAR has since agreed to make the charters permanent and the snag in settlement talks is the amount of money 23XI and Front Row is demanding in damages and legal fees.

Teams are concerned that NASCAR's entire framework could be torn apart by a loss and are aggravated that it would be over the monetary demands being made by 23XI and Front Row.

Bell last week issued another win for 23XI and Front Row when he dismissed NASCAR's countersuit against Curtis Polk, the longtime business manager for Jordan and one of 23XI's owners.