Explosive Text Messages Revealed During Hearing In 23XI Racing’s Lawsuit Against NASCAR

The gloves are off.

NASCAR has been locked in a heated legal battle after a lawsuit was filed against the sport by two of its race teams, Front Row Motorsports and 23XI Racing.

23XI is, of course, owned by NBA legend Michael Jordan and current Joe Gibbs Racing driver Denny Hamlin.

The lawsuit came as a result of tense negotiations between NASCAR and team owners over the sport’s charter agreement for 2025 and beyond. (A charter gives a team a guaranteed spot in each race, as well as a larger portion of the revenue). Without charters, teams can still compete as “open” teams, but they are not guaranteed a spot in the race and must race their way in during qualifying. Open teams also get a smaller share of the revenue from each race.

The previous charter agreement expired at the end of 2024, and the team owners pushed throughout the year for an agreement that would provide a greater share of television revenue to the race teams, among other changes that they were seeking to help improve their own financial stability.

Of course NASCAR pushed back on many of the requests by teams, giving them an increased share of the TV revenue but not meeting the number that some team owners (like Hamlin) claim is necessary for teams to simply break even.

And the new agreement presented by NASCAR also reportedly included a non-disparagement clause, preventing the teams from publicly criticizing the sanctioning body, as well as a provision that allowed NASCAR itself to own charters and run their own teams.

There was also a clause in the charter agreement that would prohibit teams from suing NASCAR for antitrust violations.

Eventually NASCAR presented team owners with what they said was their best and final deal, and gave them an ultimatum: Sign it before the 2024 playoffs start, or we’ll take your charters.

Well 13 of 15 NASCAR teams decided to just bite the bullet and sign the agreement, although many of them didn’t exactly sound thrilled with the deal they got. But the two that refused to accept NASCAR’s proposal, 23XI and FRM, decided to instead file a lawsuit against the sanctioning body.

The lawsuit accuses NASCAR and CEO Jim France of “unlawful monopolization of premier stock car racing in order to enrich themselves at the expense of the premier stock car racing teams.”

The teams cite NASCAR’s ownership of many of the tracks at which it races, as well as requirements that teams buy their parts from suppliers chosen by NASCAR, as proof that the sanctioning body has a monopoly on the sport of stock car racing.

As part of the lawsuit, the teams asked for a preliminary injunction that would allow them to compete as chartered teams for 2025, something that they wouldn’t have been able to do unless a judge struck the provision in the charter agreement prohibiting teams from filing an antitrust lawsuit against NASCAR.

And competing as a chartered team is a big deal: It’s not only more revenue, but a guaranteed spot in each race, which is important when it comes to signing sponsors and drivers. (In fact, 23XI claims that both Bubba Wallace and Tyler Reddick informed the team that they may seek other options if 23XI couldn’t guarantee them a charter).

Well a district court judge granted 23XI an injunction back in December that required NASCAR to permit the team to run as chartered cars for 2025, citing in part a clause in Reddick’s contract that requires 23XI to provide a chartered car for the driver as well as threats from sponsors to pull out if the team wasn’t chartered.

But NASCAR appealed that ruling, and in June a three judge panel on the appeals court vacated the injunction requiring NASCAR to allow 23XI and Front Row Motorsports to run as chartered teams.

That means that, if NASCAR decided not to allow them to continue on as chartered teams, they would lose not only the money that they would get from running as a chartered team but also the guaranteed starting spot for Bubba Wallace, Tyler Reddick and Riley Herbst for 23XI Racing and Noah Gragson, Todd Gilliland and Zane Smith for FRM.

The teams appealed the ruling, asking for a rehearing in front of the full Court of Appeals. But last month, NASCAR scored yet another legal victory when the court declined to rehear the appeal from the teams:

With the appeals court ruling, NASCAR did indeed revoke the charters of 23XI and FRM, meaning that the teams have been forced to run as open teams for the last month. But they also took steps to change the rulebook to ensure that 23XI and FRM would be guaranteed starting spots in each race (which sounds like something a monopoly would do, change the rules midseason to benefit their own legal case…).

Things heated up again this week though, when NASCAR informed the court that they intended to sell one of the charters from either 23XI or FRM to another interested team, prompting the teams to renew their request for an injunction allowing them to run as chartered teams and prohibiting NASCAR from selling their charters.

Of course if the charters were sold to another team, and 23XI and FRM ultimately prevail in the litigation, it would be hard to figure out what the damages are: There are only 36 charters, and their value fluctuates depending on how many are up for sale and which teams are in the market for them. Last year, FRM reportedly paid between $20-25 million for a charter that they bought from Stewart-Haas Motorsports. And the year prior, Spire Motorsports (which isn’t involved in the litigation) reportedly paid $40 million for a charter.

And 23XI and FRM also say that selling their charters would put them out of business.

“NASCAR has stated its intent to sell Plaintiffs’ charter slots to other entities before trial, putting 23XI and Front Row Motorsports out of business regardless of what happens at trial.”

Well the two sides were in court today for a hearing on the request for an injunction, and it sounds like it was explosive.

Up to this point in the litigation, much of the discovery that’s been exchanged between the two sides has been sealed, something that the judge doesn’t sound very pleased with. But after some text messages were introduced during the hearing, it’s pretty clear why both sides wanted to keep the evidence from becoming public.

In one text, NASCAR president Steve Phelps said that the proposed charter agreement contained “zero wins” for the teams, and made clear his feelings for the teams that make up the sport:

“F–k the teams.”

And another text from 23XI owner Michael Jordan showed his feelings on teams that signed the charter agreement, calling Joe Gibbs Racing “f–kers” after finding out that they had signed the agreement, while calling the rest of the teams “p–sies” for not pushing back on NASCAR’s demands.

Another text message from Denny Hamlin bashed the France family, including NASCAR CEO Jim France, saying that his “despise for the France family runs deep,” while 23XI executive Steve Lauletta said that the only solution to the problems facing the sport was “Jim France dying.”

Meanwhile, NASCAR was reportedly planning to continue on with the sport without the Cup Series teams if a charter agreement wasn’t reached after the 2024 season, reportedly planning on relying on the Truck Series and Xfinity Series while trying to prevent the Cup Series team from forming another racing series by locking them out of racetracks.

Insanity.

The court didn’t issue a ruling on the teams’ request for an injunction, signaling that would come next week. But he did issue a warning to both sides that if a settlement isn’t reached, the case would go to trial, and that if either side is confident of a win, they’re wrong.

It’s a messy situation, but at this point it doesn’t look like either side has much interest in trying to find an off ramp to keep it from escalating.