The period between NASCAR race weekends is typically quiet unless something significant occurs in the previous race. This time, aside from Ross Chastain ending a 30-race win drought, there wasn’t much to report. However, 23XI Racing and Front Row Motorsports made headlines by taking the dramatic step of filing a lawsuit against NASCAR. This action stemmed from the fact that most Cup teams signed a new deal, but these two did not, believing they were coerced into signing under pressure in a ‘take it or leave it’ scenario. 23XI Racing and Front Row Motorsports were determined to challenge this.
For context, NASCAR had been negotiating a new charter agreement with all Cup teams following a new media rights deal signed earlier this year. The negotiations stretched on for months with little progress. Given Michael Jordan’s stature, it’s no surprise he enlisted the help of a top legal expert: Jeffrey Kessler, Partner and Co-Executive Chairman of Winston & Strawn LLP. Jordan expressed, “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors, and fans. Today’s action shows I’m willing to fight for a competitive market where everyone wins.”
Kessler shared details of the lawsuit, stating, “On September 6th, NASCAR using its monopoly, went to all the teams at 5 o’clock and said, ‘Here’s a 100-page agreement. Either accept it by six or you cannot have a charter to compete.’ Most teams folded because they couldn’t afford to fight NASCAR and couldn’t risk their franchise and employees. Two teams, my clients, did not fold. That’s Front Row and 23XI.”
The concern over “not being able to have a charter” is significant for NASCAR team owners. The financial landscape and ownership dynamics of the sport have dramatically changed. Here’s a brief charter timeline to illustrate this:
2016: 36 charters allowed guaranteed race spots, enhancing team security.
Initial Values: Charters ranged from $1 million to $5 million based on performance and history.
Late 2010s: Prices rose to $10 million to $15 million due to increased interest and market stability.
Early 2020s: Prices climbed to $20 million to $30 million as NASCAR’s popularity surged during the pandemic.
Current Values: Charters now exceed $30 million, fueled by high-profile owners and significant investment in the sport.
This represents an astonishing 2900% increase in less than a decade!
Highlighting the tipping point for 23XI and Front Row Motorsports, Kessler emphasized, “They decided, somebody’s got to stand up to this bully. Somebody has got to say, enough is enough. They are going to file this lawsuit so that NASCAR can come into the 21st century. Give these teams and drivers a fair economic chance to match the fact that NASCAR fans do not go to see races to watch Jim France. They go to watch these teams and these drivers.”
Jeffrey Kessler, Co-Executive Chairman at Winston & Strawn, is a leading authority in antitrust, trial, and sports law. He was named one of “The Most Influential People in Sports Business” by Sports Business Journal in 2021 and was also included in SBJ’s “Power Players: Outside Counsel” list for his significant contributions to sports law.
Here are some notable achievements from his career in sports:
1. NFL Free Agency and Salary Cap (1992)
Case: McNeil v. NFL
Outcome: Kessler played a crucial role in securing free agency for NFL players by challenging the NFL’s Plan B system, which limited player movement. This led to the establishment of modern free agency and the NFL salary cap, greatly altering player-team negotiations.
2. Defending NFL Players’ Rights During the 2011 Lockout
Case: Brady v. NFL
Outcome: Kessler represented NFL players during the 2011 lockout, helping to file a class-action antitrust lawsuit against the NFL, which ultimately resulted in a new Collective Bargaining Agreement (CBA) and allowed the NFL season to resume.
3.NCAA and Student-Athlete Compensation
Case: O’Bannon v. NCAA and Alston v. NCAA
Outcome: In both cases, Kessler represented college athletes seeking compensation. The O’Bannon case successfully challenged the NCAA’s practice of using athletes’ likenesses without compensation. The Alston case resulted in a Supreme Court ruling that permitted educational-related benefits for college athletes, signifying a major shift in NCAA amateurism rules.
4.NBA Salary Cap (1995)
Case: NBA v. National Basketball Players Association (NBPA)
Outcome: Kessler represented NBA players in negotiations that culminated in the creation of the NBA’s salary cap and free agency regulations. This case was instrumental in establishing the current economic framework of the NBA.
5.Women’s Soccer Equal Pay (2019)
Case: USWNT v. U.S. Soccer Federation
Outcome: Kessler represented the U.S. Women’s National Soccer Team in their equal pay lawsuit. Despite facing several legal challenges, the USWNT ultimately reached a settlement in 2022, achieving equal pay and improved conditions for women’s soccer players.
6.International Sports Antitrust (Formula 1)
Case: FIA v. Arrows Grand Prix International (2001)
Outcome: Kessler represented Arrows in a prominent case that contested Formula 1’s restrictive practices, leveraging antitrust law to challenge the FIA’s control over the sport. Although the case was settled, it established a precedent for legal actions in global sports governance.
Now, another motorsport seeks Kessler’s expertise. While the outcome of NASCAR vs. 23XI & FRM remains uncertain for the time being, the renowned sports attorney praised the two NASCAR teams for confronting the governing body. He stated, “Not everybody’s got the courage to stand up to a bully. I’ve done these fights in college, in the NFL, in the NBA. Not everybody will stand up, take the pressure, the risk. Some people will go along with scraps. 23XI, Front Row, have had enough. Somebody has to say ‘This is enough,’ that’s what they’ve done.”
