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Judge Denies NASCAR Teams’ Injunction Request in Antitrust Case

By  |  November 10, 2024

U.S. District Court Judge Frank Whitney on Friday denied a request for a preliminary injunction from two racing teams, including 23XI Racing, co-owned by NBA legend Michael Jordan. The teams sought to secure early access to NASCAR’s 2025 charter agreements without being bound by a clause preventing them from taking legal action against the organization.

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    23XI Racing and Front Row Motorsports had appeared in court earlier in the week, pushing for an injunction that would allow them to bypass NASCAR’s requirement barring teams from initiating lawsuits if they signed the new charter agreement. The request was part of a larger antitrust complaint filed by the two teams against NASCAR and its CEO, Jim France, which alleges restrictive practices within the sport’s charter system.

    Judge Whitney ruled that the teams had not sufficiently demonstrated that an injunction was necessary to avoid “irreparable harm,” explaining that the start of the 2025 racing season was still months away. In his statement, Whitney noted, “the stock cars remain in the garage,” adding that the timeline for potential harm was far from immediate. “At this stage, the teams are no closer to irreparable harm than they are to the command, ‘Drivers, start your engines,’ at the first race of the 2025 season,” he wrote, according to The New York Times.

    The teams argued that failure to secure the charter agreements could jeopardize their ability to retain drivers, sponsors, and prize money, potentially damaging their reputation with fans. However, Whitney dismissed these claims as speculative, stating that the possible losses outlined by the teams did not meet the standard for irreparable harm.

    Read more: Michael Jordan Appears in Court to Challenge NASCAR’s Charter System

    “Plaintiffs have not alleged that their business cannot survive without a preliminary injunction,” Whitney stated in the ruling. Instead, he described their argument as one suggesting their businesses “may not survive,” a level of risk that he ruled insufficient to justify the injunction.

    This legal clash is rooted in a September decision by NASCAR, in which 13 out of 15 Cup Series teams agreed to an extension of the charter system, which has been likened to a franchise model in traditional sports leagues. 23XI Racing and Front Row Motorsports were the only teams to abstain, sparking this dispute.

    The charter agreement, crucial to the revenue-sharing structure in NASCAR, secures teams a share of NASCAR’s income generated from a new seven-year media rights deal. The agreement, which goes into effect in 2025, includes partnerships with broadcasting giants Fox Sports, NBC Sports, Amazon Prime, and Warner Bros. According to court records, NASCAR’s teams collectively stand to receive nearly 50 percent of the revenue from these media rights, making the charter system a vital component of their financial stability.

    Source: The New York Times