23XI, FRM attorney Jeffrey Kessler dunks on NASCAR commissioner Steve Phelps over charter ultimatum

NASCAR commissioner Steve Phelps took the stand Tuesday in Day 7 of the 23XI Racing and Front Row Motorsports versus NASCAR antitrust lawsuit trial. One of the more notable moments came when the plaintiffs’ attorney Jeffrey Kessler questioned Phelps over the sanctioning body’s widely reported take-it-or-leave-it deadline to extend the charter agreement Aug. 6, 2024.

According to Jeff Gluck and Jordan Bianchi of The Athletic, Kessler presented Phelps with an email he wrote during negotiations. The email read, “They are playing with fire. Lots of options, but all have the same theme. Pick a date and they can sign or lose charters. It is that simple.” Phelps, the head negotiator for the charter deal, took issue with the characterization of the deadline as a monopolist using its power to force the teams into signing the deal:

“That is not what happened,” Phelps said.

Kessler quipped back, “We’ll let the jury decide.”

23XI, FRM vs. NASCAR trial: Steve Phelps pressed on salary, track agreements during testimony

Furthermore, Phelps was asked to reveal his salary. According to Bob Pockrass of FOX Sports, Phelps makes $2.5 million a year, up from his $1.6 million a year as president of the sport. He has the potential to earn up to $2.5 million in bonuses as part of his compensation package.

As far as the nearly $400 million that the France family has been paid in the last four years (2021-2024), Phelps had an answer for that, which takes a little pressure off of NASCAR. 75% of that money paid to the France family went to taxes. That leaves roughly $100 million not in taxes.

When Phelps was asked about NASCAR’s track agreements, he didn’t seem to recall or did not know when the exclusivity clauses began. There is an article from 2016 from when Pockrass was at ESPN that seems to pinpoint when these exclusivity agreements arose. Gluck said the article was brought up in court. It was an agreement with Dover Motor Speedway that raised a small red flag then.

Expert witness, economist Edward Snyder, claimed that payments to tracks were unnecessary. In his opinion, NASCAR payments to tracks are primarily to lock up exclusivity agreements. If NASCAR didn’t make tracks exclusive to their stock car product, the tracks could host more races. The only way for sports venues to host one or two events a year and remain open is to receive some kind of compensation for being empty all year. So, that’s where NASCAR seemingly comes in. The payments totaled $311 million in 2024. $130 million was paid to non-NASCAR-owned tracks.

Snyder argued that NASCAR could heavily reduce those payments or do away with them entirely. That money could then be paid out to teams, theoretically. Snyder also found that NASCAR earned an average of $250 million between 2021 and 2024. Of course, likely included in that figure is the sale of the land where Auto Club Speedway used to be.

It’s a big day at the Western District of North Carolina courthouse. After Phelps, Richard Childress and NASCAR CEO Jim France are set to be called to the witness stand by the teams.

On3’s Jonathan Howard contributed to this report.