A New Era for NASCAR: Lawsuit Settlement Reshapes the Sport

In the high-stakes world of stock car racing, the antitrust lawsuit filed by 23XI Racing (co-owned by Michael Jordan and Denny Hamlin) and Front Row Motorsports against NASCAR in October 2024 marked a pivotal challenge to the sport’s business model.

–by Mark Cipolloni–

The teams, the only two to refuse signing the new charter agreement for 2025-2031, alleged that NASCAR and the France family engaged in anticompetitive practices, including monopolistic control over premier stock car racing, restrictive exclusivity clauses, and unfair revenue distribution that stifled team growth and competition.

The case escalated to a federal trial in Charlotte, North Carolina, beginning December 1, 2025. Over eight days of testimony, evidence emerged that proved damaging to NASCAR’s image. Internal text messages from executives were unsealed, revealing derogatory comments: NASCAR President Steve Phelps called veteran owner Richard Childress a “stupid redneck” and “clown,” while EVP Scott Prime joked in messages that many fans “can’t read.” Other texts showed frustration with team proposals, with executives describing them as returning to a “1996, f— the teams, dictatorship” era. Chairman Jim France testified he remained opposed to permanent charters despite team pleas, entering negotiations intent on “winning.” An economist testified that NASCAR potentially owed the plaintiffs $364.7 million in damages and had shorted all chartered teams over $1 billion in revenue from 2021-2024.

Facing mounting pressure and the risk of a jury verdict that could award triple damages or force structural changes—like divesting tracks or eliminating exclusivity—the parties reached a settlement on December 11, 2025, the ninth day of trial. In a joint statement, NASCAR, 23XI, and Front Row expressed mutual satisfaction, noting the resolution “delivers long-term stability and creates the conditions for meaningful growth for all teams in a more competitive environment.”

Key terms of the settlement, drawn from court statements and industry reports, include:

– Permanent (“Evergreen”) Charters: All 36 chartered teams now hold permanent charters, akin to franchises in other sports, eliminating expiration dates and providing unprecedented security. This was a core demand unmet in prior negotiations.

– Restoration for Plaintiffs: 23XI and Front Row regained their six combined charters (three each), lost during litigation, along with compensation for lost revenue from racing as “open” (non-chartered) teams in 2025.

– Expanded Revenue Sharing: Teams gain a percentage of international TV rights deals (previously zero) and one-third of new business involving team intellectual property.

– Restored and Enhanced “Strike” Rule: The “three-strike” mechanism—allowing teams to block costly NASCAR changes—was removed in the 2025 agreement but reinstated and expanded to five strikes. Accumulating five could void exclusivity clauses.

– Other Protections: Renewal requires two-thirds team approval; non-signing teams retain charters with time to sell; performance standards include sell mandates but with grace periods; NASCAR’s cut of charter sales rises to 10%.

Financial damages to the plaintiffs remain confidential, but the concessions benefit all teams, increasing charter values (recent sales hit $45 million) and economic viability.

As NASCAR heads into 2026 and beyond, the settlement averts catastrophe but highlights lingering challenges. The exposed internal disdain damaged trust and fan perception, splitting the base—some viewed the suing teams as greedy, others as heroes fighting for fairness. Leadership questions linger over figures like Phelps and Prime. Yet, with permanent charters and better revenue, teams gain leverage for future growth, potentially fostering collaboration on new media deals and international expansion.

Michael Jordan called it “progress” for the entire sport, while Hamlin emphasized sustainability. NASCAR now stands on firmer, more equitable ground—poised for unity and evolution, provided the France family and teams bridge the revealed divides to prioritize fans and competition. The lawsuit’s end signals not just resolution, but a transformed landscape for America’s premier motorsport series.