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Yahoo
2 days ago
- Automotive
- Yahoo
NASCAR Seeks Racing Teams' Financial Data in Antitrust Case
NASCAR on Wednesday petitioned U.S. District Judge Kenneth D. Bell to order racing teams that aren't part of 23XI Racing and Front Row Motorsports' antitrust case to provide financial documents related to costs, revenues and profits since those teams aren't willing to share them. If Bell refuses, NASCAR insists he should rule that this type of data is 'irrelevant at trial.' Joe Gibbs Racing, Hendrick Motorsports, Spire Motorsports IV, Trackhouse Racing, Penske Motorsports, Richard Childress Racing Enterprises, Wood Brothers Racing, RFK Racing, Legacy Motor Club, Hyak Motorsports, Rick Ware Racing, and Haas Factory Team are the teams at issue. Each signed charters and none is a party to the litigation. Advertisement More from NASCAR contends these teams possess crucial evidence that the association can't otherwise obtain. This evidence is described as essential for NASCAR to be able to rebut the plaintiffs' claim that it doesn't 'fairly' share 'industry revenues' with teams. Along those lines, NASCAR's use of charters, which guarantee teams a starting position in NASCAR-sanctioned races but restrict their opportunities to compete in other circuits, is central to the case. In a brief authored by Tricia Wilson Magee and other attorneys from Shumaker, Loop, & Kendrick and Latham & Watkins, NASCAR says it subpoenaed the teams in April and sought 11 categories of documents. After discussion with those teams, NASCAR agreed to narrow its request. But the teams still won't produce the records, with NASCAR attributing their decision to confidentiality concerns. NASCAR maintains this concern is misplaced. The litigation is governed by a protective order that shields some materials from public access. NASCAR asserts it has offered 'extensive assurances' for confidentiality. As NASCAR tells it, the teams have agreed to only share selected information that would feature redacted and anonymized data. NASCAR argues these limitations would invite 'questions' about the admissibility of the data at trial and whether NASCAR's experts could credibly draw from the data in formulating conclusions. Advertisement Teams, NASCAR argues, could 'easily provide' the 'ordinary-course financial documents' it seeks. The teams are described as 'sophisticated companies' that rely on contemporary accounting practices. Audited financial statements, income statements, cash flow statements and other 'ordinary course financials' are already generated by teams, NASCAR suggests. NASCAR also contends that while it is the league in which teams compete, it nonetheless has 'limited visibility into teams' financial metrics.' Teams take in 'substantial revenue from sponsorships' that are 'separate from what they receive from NASCAR' in charters. This additional revenue allegedly represents a 'major component of the industry revenue' at issue. Bell, NASCAR argues, shouldn't permit 23XI Racing and Front Row to accuse NASCAR of unfairly sharing revenue with charter teams if NASCAR can't ascertain the financial health of those teams. NASCAR makes that point as the Dec. 1 trial date looms. If Bell refuses to order racing teams to divulge financial information and permits NASCAR to be accused of unfairly sharing revenue, and if NASCAR loses the trial, NASCAR would be armed with a potential appellate argument that Bell erred. Penske Motorsports is owned by Roger Penske and is not related to Penske Media, the parent company of Sportico. Advertisement Best of Sign up for Sportico's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
New York Times
4 days ago
- Automotive
- New York Times
Judge expresses concern over suit vs. NASCAR, asks what 23XI, Front Row want
CHARLOTTE, N.C. — From the moment 23XI Racing and Front Row Motorsports collectively filed an antitrust lawsuit last fall against NASCAR and NASCAR CEO and chairman Jim France, the most-asked question has been, what exactly do 23XI and Front Row want if they prevail in federal court? On Tuesday, after receiving that question from U.S. District Court Judge Kenneth D. Bell, attorney Jeffrey Kessler, who represents 23XI and Front Row, laid out what his clients seek. Advertisement Among the possibilities, Kessler explained, was forcing NASCAR to divest itself of the racetracks it owns, 11 of which host premier Cup Series races. The plaintiffs also want any financial damages to be tripled, and the ability to compete in non-NASCAR-sanctioned races using the NASCAR-exclusive Next Gen car. The goals of 23XI and Front Row were among the highlights from a nearly two-hour hearing centered around NASCAR's counterclaim that 23XI, Front Row and 23XI co-owner Curtis Polk 'agreed to a scheme to pressure NASCAR to accept their collusive terms, including by engaging in media campaigns, interfering with NASCAR's broadcast agreement negotiations, threatening boycotts of NASCAR events and engaging in a group boycott of a NASCAR Team Owner Council Meeting.' In its counterclaim filed in March, NASCAR alleged that Polk operated as the ringleader in conspiring against NASCAR as the league and the 15 teams that hold charters — the equivalent of a franchise in other sports, which includes assurances of certain monetary gains — negotiated a new charter agreement. In court on Tuesday, NASCAR's attorneys argued that the fact that the teams boycotted a planned meeting with NASCAR demonstrated a willingness to boycott a race. NASCAR has previously argued that the teams discussed boycotting the 2024 Daytona qualifying races. On Tuesday, Kessler rebutted that claim, saying there was no conspiracy by the teams and that boycotting a meeting is merely part of the negotiating process. Bell did not render a verdict Tuesday, but with a trial date set for Dec. 1 and both sides far apart, he did issue a warning at the conclusion of the hearing. 'Hard to picture a real winner if this goes to the mat, or the flag, in this case,' Bell said. Afterward, Kessler told reporters his side was open to a settlement, but that NASCAR was uninterested in doing so. Advertisement 'We've always indicated that if there could be a fair settlement breach, that we could come to something that's good for everybody, I'm a lawyer, I am always open to settlement,' Kessler said. 'I think my clients are always open to settlement. '(If) they're not going to agree to anything, we'll see them at trial. We are very much open to what all the judges are saying … this is a case that should be settled and worked out so that everyone could go forward racing. The fans don't have to read and hear about all of this, and could have a better system for everyone.' Kessler also said 23XI and Front Row would seek a rehearing before the full Fourth Circuit Court of Appeals as they attempt to maintain their charter status for the 2025 season. Three judges earlier this month overturned an injunction the teams had been granted to maintain their charter status, after NASCAR won its appeal. 'Unfortunately, I don't think the three judges, if you read their opinion, actually dealt with the hard issues, and that's what the circuit will need to do,' Kessler said.
Yahoo
4 days ago
- Automotive
- Yahoo
Federal judge calls on NASCAR, teams to settle bitter antitrust battle
CHARLOTTE, N.C. (AP) — A federal judge urged NASCAR and two of its teams, including one owned by retired NBA great Michael Jordan, to settle their increasingly acrimonious legal fight that spilled over into tense arguments during a hearing on Tuesday. U.S. District Judge Kenneth Bell of the Western District of North Carolina grilled both NASCAR and the teams — 23XI Racing, which is owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins — on what they hoped to accomplish in the antitrust battle that has loomed over the stock car series for months. 'It's hard to picture a winner if this goes to the mat — or to the flag — in this case,' Bell said. 'It scares me to death to think about what all this is costing.' 23XI and Front Row were the only two organizations that refused to sign a take-it-or-leave-it offer from NASCAR last September on a new charter agreement. Charters are NASCAR's version of a franchise model, with each charter guaranteeing entry to the lucrative Cup Series races and a stable revenue stream; 13 other teams signed the agreements last fall, with some contending they had little choice. The nearly two-hour hearing was on the teams' request to toss out NASCAR's countersuit, which accuses Jordan business manager Curtis Polk of 'willfully' violating antitrust laws by orchestrating anticompetitive collective conduct in negotiations. NASCAR said it learned in discovery that Polk in messages among the 15 teams tried to form a 'cartel' type operation that would include threats of boycotting races and a refusal to individually negotiate. One of NASCAR's attorneys even cited a Benjamin Franklin quote Polk allegedly sent to the 15 organizations that read: 'We must all hang together, or most assuredly we shall all hang separately." Jeffrey Kessler, an attorney representing the teams, was angered by the revelation in open court, contending it is privileged information only revealed in discovery. Kessler also argued none of NASCAR's claims in the countersuit prove anything illegal was done by Polk or the Race Team Alliance during the charter negotiation process. 'NASCAR knows it has no defense to the monopolization case so they have come up with this claim about joint negotiations, which they agreed to, never objected to, and now suddenly it's an antitrust violation,' Kessler said outside court. 'It makes absolutely no sense. It's not going to help them deflect from the monopolizing they have done in this market and the harm they have inflicted.' He added that 'the attacks' on Polk were "false, unfounded and frankly beneath the dignity of my adversary to even make those type of comments, which he should know better about.' NASCAR attorneys said Polk improperly tried to pressure all 15 teams that comprise the RTA to stand together collectively in negotiations and encouraged boycotting qualifying races for the 2024 Daytona 500. NASCAR, they said, took the threat seriously because the teams had previously boycotted a scheduled meeting with series executives. 'NASCAR knew the next step was they could boycott a race, which was a threat they had to take seriously,' attorney Lawrence Buterman said on behalf of NASCAR. Kessler said outside court the two teams are open to settlement talks, but noted NASCAR has said it will not renegotiate the charters. NASCAR's attorneys declined to comment after the hearing. Bell did not indicate when he'd rule, other than saying he would decide quickly. Preliminary injunction status Kessler said he would file an appeal by the end of the week after a three-judge federal appellate panel dismissed a preliminary injunction that required NASCAR to recognize 23XI and Front Row as chartered teams while the court fight is being resolved. Kessler wants the issue heard by the full appellate court. The injunction has no bearing on the merits of the case, which is scheduled to go to trial in December. The earliest NASCAR can treat the teams as unchartered is one week after the deadline to appeal, provided there is no pending appeal or whenever the appeals process has been exhausted. There are 36 chartered cars for the 40-car field each week. If 23XI and Front Row are not recognized as chartered, their six cars would have to compete as 'open' teams — which means they'd have to qualify on speed each week to make the race and they would receive a fraction of the money guaranteed for chartered teams. Discovery issues Some of the arguments Tuesday centered on Jonathan Marshall, the executive director of the RTA. NASCAR has demanded text messages and emails from Marshall and says it has received roughly 100 texts and over 55,000 pages of emails. NASCAR wants all texts between Marshall and 55 people from 2020 through 2024 that contain specific search terms. Attorneys for the RTA said that covers more than 3,000 texts, some of which are privileged, and some that have been 'deleted to save storage or he didn't need them anymore.' That issue is set to be heard during a hearing next Tuesday before Bell. ___ AP auto racing:
Associated Press
4 days ago
- Automotive
- Associated Press
Federal judge calls on NASCAR, teams to settle bitter antitrust battle
CHARLOTTE, N.C. (AP) — A federal judge urged NASCAR and two of its teams, including one owned by retired NBA great Michael Jordan, to settle their increasingly acrimonious legal fight that spilled over into tense arguments during a hearing on Tuesday. U.S. District Judge Kenneth Bell of the Western District of North Carolina grilled both NASCAR and the teams — 23XI Racing, which is owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins — on what they hoped to accomplish in the antitrust battle that has loomed over the stock car series for months. 'It's hard to picture a winner if this goes to the mat — or to the flag — in this case,' Bell said. 'It scares me to death to think about what all this is costing.' 23XI and Front Row were the only two organizations that refused to sign a take-it-or-leave-it offer from NASCAR last September on a new charter agreement. Charters are NASCAR's version of a franchise model, with each charter guaranteeing entry to the lucrative Cup Series races and a stable revenue stream; 13 other teams signed the agreements last fall, with some contending they had little choice. The nearly two-hour hearing was on the teams' request to toss out NASCAR's countersuit, which accuses Jordan business manager Curtis Polk of 'willfully' violating antitrust laws by orchestrating anticompetitive collective conduct in negotiations. NASCAR said it learned in discovery that Polk in messages among the 15 teams tried to form a 'cartel' type operation that would include threats of boycotting races and a refusal to individually negotiate. One of NASCAR's attorneys even cited a Benjamin Franklin quote Polk allegedly sent to the 15 organizations that read: 'We must all hang together, or most assuredly we shall all hang separately.' Jeffrey Kessler, an attorney representing the teams, was angered by the revelation in open court, contending it is privileged information only revealed in discovery. Kessler also argued none of NASCAR's claims in the countersuit prove anything illegal was done by Polk or the Race Team Alliance during the charter negotiation process. 'NASCAR knows it has no defense to the monopolization case so they have come up with this claim about joint negotiations, which they agreed to, never objected to, and now suddenly it's an antitrust violation,' Kessler said outside court. 'It makes absolutely no sense. It's not going to help them deflect from the monopolizing they have done in this market and the harm they have inflicted.' He added that 'the attacks' on Polk were 'false, unfounded and frankly beneath the dignity of my adversary to even make those type of comments, which he should know better about.' NASCAR attorneys said Polk improperly tried to pressure all 15 teams that comprise the RTA to stand together collectively in negotiations and encouraged boycotting qualifying races for the 2024 Daytona 500. NASCAR, they said, took the threat seriously because the teams had previously boycotted a scheduled meeting with series executives. 'NASCAR knew the next step was they could boycott a race, which was a threat they had to take seriously,' attorney Lawrence Buterman said on behalf of NASCAR. Kessler said outside court the two teams are open to settlement talks, but noted NASCAR has said it will not renegotiate the charters. NASCAR's attorneys declined to comment after the hearing. Bell did not indicate when he'd rule, other than saying he would decide quickly. Preliminary injunction status Kessler said he would file an appeal by the end of the week after a three-judge federal appellate panel dismissed a preliminary injunction that required NASCAR to recognize 23XI and Front Row as chartered teams while the court fight is being resolved. Kessler wants the issue heard by the full appellate court. The injunction has no bearing on the merits of the case, which is scheduled to go to trial in December. The earliest NASCAR can treat the teams as unchartered is one week after the deadline to appeal, provided there is no pending appeal or whenever the appeals process has been exhausted. There are 36 chartered cars for the 40-car field each week. If 23XI and Front Row are not recognized as chartered, their six cars would have to compete as 'open' teams — which means they'd have to qualify on speed each week to make the race and they would receive a fraction of the money guaranteed for chartered teams. Discovery issues Some of the arguments Tuesday centered on Jonathan Marshall, the executive director of the RTA. NASCAR has demanded text messages and emails from Marshall and says it has received roughly 100 texts and over 55,000 pages of emails. NASCAR wants all texts between Marshall and 55 people from 2020 through 2024 that contain specific search terms. Attorneys for the RTA said that covers more than 3,000 texts, some of which are privileged, and some that have been 'deleted to save storage or he didn't need them anymore.' That issue is set to be heard during a hearing next Tuesday before Bell. ___ AP auto racing:
Yahoo
12-06-2025
- Automotive
- Yahoo
NASCAR Blocks Michael Jordan Team in Appellate Court
In a significant legal win for NASCAR, the U.S. Court of Appeals for the Fourth Circuit on Thursday vacated a preliminary injunction issued last December by a trial court judge that allowed 23XI Racing, owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports to race with the benefits of charters without having to release claims. Judge Paul V. Niemeyer, writing on behalf of himself and Judges Steven Agee and Stephanie Thacker, reasoned that the 'theory of antitrust law' asserted by 23XI and Front Row 'is not supported by any case of which we are aware.' Advertisement More from The ruling does not necessarily bar 23XI and Front Row from competing, as they could race as open (non-chartered) teams. Per an agreement with NASCAR, the two teams competed as open teams last fall after they sued NASCAR, but their charters are no longer protected by a district court's injunction. Thursday's ruling is not a surprise. As Sportico detailed following an oral argument at the Fourth Circuit last month, the three judges expressed substantial skepticism toward the case and sharply questioned why U.S. District Judge Kenneth D. Bell granted the injunction. Thacker went so far as to say 'this is the first time . . . in all the history of contract law' that an injunction effectively creates a new contract. By that, Thacker meant NASCAR was compelled to provide 23XI and Front Row the benefits of a charter—which guarantee teams a starting position in NASCAR-sanctioned races—without those two teams, unlike other NASCAR teams, having to release claims. The judges repeatedly opined that there's an absence of case precedent supporting this legal theory and suggested it provided an unauthorized windfall to 23XI and Front Row. Advertisement Thursday's ruling captures that same spirit of hostility toward the case. 'While [23XI and Front Row allege] years of conduct and contract provisions that they claimed were anticompetitive, thus attacking NASCAR's entire business model,' Niemeyer wrote, the two nonetheless want to compete in NASCAR Cup Series events 'under the terms of the 2025 Charter Agreement' except without having to sign a release. Niemeyer questioned why 23XI Racing and Front Row want to 'participate in the very business' that they seek 'to dismantle.' Niemeyer also criticized Bell for supplying an answer to a legal question that, the three-judge panel contends, isn't based on any precedent. Bell raised the question, 'Can a monopolist require that a party agree to release the monopolist from all claims that it is violating the antitrust laws as a condition of doing business?' He followed with, 'The answer is no.' Advertisement Niemeyer suggested Bell's answer isn't based on case law. To that end, Niemeyer wrote, Bell 'supplied no case law to support that theory. Indeed, we have found no case to support it, and the defendants claim that there is none.' Although there are cases involving parties signing agreements, those cases are 'hardly relevant,' since with 23XI and Front Row, 'there is no agreement.' Instead, 'the plaintiffs refused to sign the 2025 Charter Agreement.' Niemeyer offered still other criticisms of the injunction's issuance and the underlying case. He questioned how a release of claims could cause the type of legal injury remedied by antitrust law, which is used to combat anticompetitive practices in the marketplace. 'Neither the plaintiffs nor [Bell],' Niemeyer wrote, 'has shown how the release would have injured competition.' Quoting a U.S. Supreme Court decision from 2009, Niemeyer stressed that parties—including NASCAR and teams—are 'free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing.' Advertisement Thursday's ruling is a victory for Christopher S. Yates of Latham & Watkins. Yates argued the case for NASCAR, while Jeffrey Kessler of Winston & Strawn argued for 23XI and Front Row. In a statement, Kessler said his group is 'disappointed' by the ruling but emphasized it was 'based on a very narrow consideration of whether a release of claims in the charter agreements is anticompetitive.' Over the next two weeks, Kessler could petition the Fourth Circuit for a rehearing en banc, which, if granted, would mean other judges on the Fourth Circuit review the arguments. But such petitions are rarely granted, especially when there is no dissenting judge on a three-judge panel. To be clear, the vacating of an injunction doesn't end the case, which accuses NASCAR of engaging in 'anticompetitive' and 'monopolistic' conduct, and 23XI and Front Row could ultimately win. A trial is currently scheduled to start Dec. 1. Advertisement Ultimately the case is about financial considerations, which means it's also possible the parties could reach a settlement out of court. Don't be surprised if that's how the case ends. Best of Sign up for Sportico's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
