NASCAR files appeal against 23XI and Front Row just 1 hour before Daytona 500 qualifying begins

DAYTONA BEACH, Fla. (AP) — NASCAR filed a 68-page appeal Wednesday night — roughly one hour before the start of Daytona 500 qualifying — arguing a federal judge erred in recognizing 23XI Motorsports and Front Row Motorsports as chartered teams for 2025 as the two organizations sue over antitrust claims.

U.S. District Judge Kenneth Bell of the Western District of North Carolina in December issued a preliminary injunction that allowed 23XI and Front Row to receive the same rewards as a chartered team while the lawsuit wades through the court system.

23XI Racing is co-owned by NBA Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, while Front Row Motorsports is owned by entrepreneur Bob Jenkins.

Last month, Bell denied NASCAR's motion to dismiss the suit, and also denied NASCAR's request that the two organizations post a bond to cover any monies they are paid as chartered teams that would have to be returned should 23XI and Front Row lose the lawsuit.

“The district court’s injunction orders flout federal antitrust law; misapply the established rules governing the use of preliminary injunctions; ignore unrebutted, legally significant evidence; and have sweeping implications for NASCAR’s 2025 Cup Series season," NASCAR wrote. "These injunctions misuse the judicial power to force NASCAR to treat its litigation adversaries as its business partners and confidants, undermining the mutual trust that has fueled NASCAR’s growth and success.”

The timing of the appeal — despite it hitting just one hour before time trials begin for Sunday's season-opening Daytona 500 — was a coincidence in that Wednesday was a court-ordered deadline. NASCAR does not publicly comment on the lawsuit.

NASCAR has maintained that it will defend itself against antitrust claims and believes that 23XI and Front Row have a misguided case; the teams don't like the terms of the charter agreement so were the only two out of 15 organizations that refused to sign the forms when NASCAR presented its take-it-or-leave it offer 48 hours before last season's playoffs began.

Not liking the terms of a contract does not qualify as an antitrust case, NASCAR believes, and is willing to see the case through to trial. Should 23XI and Front Row prevail, it is believed NASCAR will eliminate the charter system outright rather than renegotiate new charters.

“While every other team owner that was offered a new Charter with these better terms accepted it, these two held out — raising concerns about several provisions but not the mutual releases,” NASCAR wrote. "NASCAR eventually withdrew its offers to Plaintiffs and moved forward with planning its 2025 Cup Series season without them as chartered teams. So 23XI and Front Row turned to the courts, attempting to transform the Charter’s standard release provision into a trump card to belatedly secure, outside of negotiations, the Charters they regretted rejecting — even though neither team owner ever raised that provision as an issue in two years of Charter negotiations.

“With neither the facts nor the law on their side, 23XI and Front Row argue it violates the Sherman Act for sports enterprises to include such standard releases in their agreements. The district court took the bait.”

At issue are the agreements that teams asked for and were granted in 2016. A charter guarantees each car that holds one a spot in the field each week, as well as guaranteed prize money and other financial incentives.

There are 36 guaranteed spots in each race, with four “open” spots for cars that do not hold charters. NASCAR believes 23XI and Front Row should be open cars since they did not sign the charter agreements.

NASCAR also did not want to approve the sale of charters from now-defunct Stewart-Haas Racing to the two teams, which each purchased one charter to expand their organizations from two cars to three. Had Bell not granted the injunction to recognize the two teams as chartered for 2025, a combined six cars between the two organizations would not have received an automatic berth into the Daytona 500.

23XI fields Toyotas for newcomer Riley Herbst, as well as Tyler Reddick, last year's regular-season champion, and Bubba Wallace. Front Row field Fords for Noah Gragson, Todd Gilliland and newcomer Zane Smith.

“At this point, NASCAR would prefer to extend the perks of the 2025 Charter to owners committed to enhancing NASCAR’s competitiveness with other sports for fans, sponsors, and media dollars - rather than owners that undermine NASCAR’s brand,” the sanctioning body wrote in the appeal.

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