Legal expert explains how entire NASCAR charter system is under threat amid 23XI, FRM lawsuit
A legal expert broke down how the NASCAR Charter system could be in danger due to the lawsuit NASCAR is in with 23XI Racing and Front Row Motorsports (FRM). On The Teardown podcast, Shannon McMinimee spoke to The Athletic reporters Jeff Gluck and Jordan Bianchi about why the NASCAR Charter system could be in trouble.
“This case is unique because the jury is going to decide if NASCAR violated the Sherman Act, but it’s the judge who sets the remedies if the jury makes that decision,” McMinimee said. “The teams will have the burden of proof to establish that a violation of the Sherman Act occurred, and then it goes to the judge to come up with remedies.
“I think he has forecasted very clearly that as much as the teams and NASCAR have talked about this in relation to the last set of charter negotiations. He sees that even the existence of the current charter system could be viewed as a unfair restraint on trade, and he’s looking at things that could be as broad as making the France family divest ISC and spen that off from NASCAR as a separate entity again; changing the system for purchasing the Next Gen car so that NASCAR is not the sole venue for which those cars can be used, or who controls who seels those parts.
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Could NASCAR make major changes to charters?
The trial began on Monday, and Bob Pockrass of Fox Sports laid out what could happen if 23XI and FRM win the lawsuit against NASCAR. On Sunday, Pockrass said if the teams win the case, the jury determines monetary damages, only actual damages. The judge could triple the amount and determine the antitrust remedies. That could range from selling tacks, having permanent charters, eliminating charters, getting rid of the Next Gen concept, or having no exclusivity clauses.
13 of the 15 NASCAR Cup Series teams signed the Charter Agreement in August 2024. 23XI and FRM were the two teams that didn’t sign, and they filed a lawsuit against NASCAR two months later. The trial is expected to last around 10 days.