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Michael Jordan’s NASCAR Team Denied Charter Bid After Appeals Court Ruling

By  |  June 5, 2025

Michael Jordan’s racing team, 23XI Racing, has lost a significant legal battle in its effort to compete in the 2025 NASCAR season under a coveted charter system. In a decision issued Thursday, the US Court of Appeals for the Fourth Circuit overturned an earlier injunction that had temporarily granted the team charter status, marking a setback in Jordan’s broader challenge to NASCAR’s business model.

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    According to a Bloomberg report, the appeals court determined that the injunction, previously granted by a district court judge, improperly compelled NASCAR to enter agreements with 23XI and Front Row Motorsports that excluded standard legal terms — namely, a litigation release clause. The absence of that clause, the court said, went against typical contractual practices and gave the plaintiffs preferential treatment.

    Judge Paul V. Niemeyer, writing for the three-judge panel, concluded that neither 23XI nor the lower court demonstrated how the release clause — a common requirement in NASCAR’s agreements — would harm competition. “Absent anticompetitive conduct in the service of monopoly power,” the opinion stated, businesses remain legally entitled to determine their own terms of engagement.

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    Related: NASCAR Urges Appeals Court to Overturn Injunctions in Ongoing Charter Dispute

    The ruling undercuts the legal claims brought by 23XI and Front Row Motorsports, who sued NASCAR last year alleging the organization operates a monopoly over premier stock car racing in the United States. The suit targeted NASCAR’s charter system, which guarantees teams entry into major races and performance-based earnings — privileges not extended to so-called “open” teams that must qualify for each race individually.

    Per Bloomberg, the Fourth Circuit found no credible basis for the lower court’s assumption that NASCAR’s requirement of a legal release amounted to anticompetitive behavior. The opinion emphasized that the release provision was broad and standard, covering a wide range of prior conduct, including any alleged violations of antitrust laws.

    Niemeyer, joined by Judges Steven Agee and Stephanie D. Thacker, noted the injunction had no clear precedent and was unlikely to succeed on legal grounds. The panel’s opinion aligns with skepticism Niemeyer had expressed during oral arguments in May.

    Attorneys for 23XI and Front Row, including Jeffrey Kessler of Winston & Strawn LLP, declined to comment on the ruling, Bloomberg reported.

    The decision now forces 23XI to operate without the guaranteed access to races and financial benefits that charter status affords — a notable blow for a team backed by one of the most recognizable figures in sports.

    Source: Bloomberg