NASCAR teams file lawsuit over charter disputes

In a significant legal development, 23XI Racing and Front Row Motorsports, two prominent NASCAR teams, have initiated a legal battle against NASCAR regarding the charter system that underpins the organization's business model. These teams filed a federal antitrust lawsuit last year after being the only two of 15 teams to reject NASCAR's final proposal for charter extensions. The litigation is centered on concerns over the revocation of their charters, which are crucial for guaranteeing entry into races and impacting financial payouts. On July 16, 2025, the urgency of the case escalated as both teams filed for a temporary restraining order and preliminary injunction, aiming to maintain their charter status for the remainder of the racing season. NASCAR had indicated intentions to sell the six charters currently held by the teams if the revocation proceeded, posing an immediate threat to their operational viability. This legal maneuver is particularly pressing as the teams are facing the potential loss of their charters due to a recent appellate court ruling that overturned an earlier injunction that had temporarily protected their status. The ongoing legal tussle highlights the importance of the charter system, which is equivalent to a franchise model, establishing the framework for team entry and financial distribution. NASCAR's charter system allows for a set number of teams to secure guaranteed spots in races and receive a baseline payment from the overall purse. Without a charter, teams must qualify based on performance, greatly complicating their participation and weakening their financial positioning. Former basketball player Michael Jordan and three-time Daytona 500 winner Denny Hamlin, who co-own 23XI, have expressed their dismay at the legal proceedings but remain firm in their pursuit of a fair resolution. Meanwhile, Bob Jenkins, owner of Front Row Motorsports, has voiced similar concerns. NASCAR has criticized the lawsuit as unnecessary and disruptive, stating that it has attempted to resolve disputes amicably without success. As the legal landscape continues to develop, the outcome will likely have significant ramifications for the charter system and the involved teams' futures in NASCAR racing.