Michael Jordan sues NASCAR? Lawsuit EXPLAINED

Basketball legend Michael Jordan made waves when he announced that he’d be investing in purchasing a NASCAR Cup Series team alongside driver Denny Hamlin — but that bombshell was nothing compared to the announcement that that team, 23XI Racing, was set to sue NASCAR.

Wondering exactly what happened, and why Jordan’s team would see value in a lawsuit? We’ll run through it in basic terms today.

Michael Jordan in NASCAR

Motorsport in America has never been bigger, with Netflix docuseries Drive to Survive increasing awareness of Formula 1 and increased fan interest leading potential viewers to new series.

Back in 2021, NASCAR gained a major boost when Hall of Fame basketball player Michael Jordan teamed up with three-time Daytona 500 winner Denny Hamlin to form a brand-new team, 23XI Racing.

The “23” represents the number that Jordan was most associated with in the NBA, while Hamlin has used the No. 11 for his entire racing career — hence the name.

Since then, the team has grown to include several drivers, including Bubba Wallace, Kurt Busch, Tyler Reddick, and more.

Jordan is one major celebrity investor in NASCAR, with other figures like Pitbull also buying into NASCAR teams via their charters.

NASCAR charter: At a glance

The 23XI lawsuit centers around a thing called a “charter.” Basically, a charter provides race teams with the guarantee that their car will gain entry into every NASCAR Cup Series race, and that those teams and drivers will gain a greater cut of the prize purse. Only a certain number of these charters exist.

For decades, motorsport has suffered from one key problem: It’s expensive. That cost often means that teams go bankrupt, left to sell off their assets, like team shops and old cars. All that used stuff has some value, but not much.

The charter was introduced as a way for teams to accrue value outside of their physical assets. While anyone with a viable car can enter a Cup race, fields are limited, for safety, so those cars — called “open” cars — aren’t guaranteed a spot on the starting grid.

Then, if a team folds, it can sell its charter to a new buyer. In 2025, charters are estimated to sell for up to $30 million.

But in order to gain access to a charter, teams need to sign an agreement outlined by NASCAR. And that’s where the 23XI and Michael Jordan situation comes into play.

2024 NASCAR charter agreements go rogue

On December 31, 2024, NASCAR’s existing charter agreement was set to expire, and series ownership wanted to get a new agreement in place as quickly as possible.

Problem is, several team owners were concerned with certain clauses in the agreement. They wanted a bigger cut of the broadcast rights purse, for example, and were annoyed by anti-disparagement clauses that would prevent drivers from being able to criticize NASCAR.

While there were negotiations about the clauses that should be included in the new charter agreement, NASCAR ultimately reached a point where it imposed a deadline on teams. Thirteen of NASCAR’s 15 teams signed, fearing that the charters would be revoked altogether.

Two teams did not sign. Those teams were 23XI Racing and Front Row Motorsports.

23XI Racing and Front Row Motorsports sue NASCAR

On October 2, 2024, a complaint was filed by 23XI and FRM in the United States District Court in the Western District of North Carolina. Represented by lawyer Jeffrey Kessler, it demanded a jury trial after claiming that NASCAR is operating a monopoly of stock car racing in America.

Avid American sports fans will recognize Kessler’s name. He’s the guy who represented Tom Brady in the “Deflategate” scandal, who secured equal pay for the US women’s soccer team, and who argued in favor of the free agency rule in the NFL.

“This is a case about the unlawful monopolization of premier stock car racing by the France family in order to enrich themselves at the expense of the premier stock car racing teams that fans come out to see and that sponsors and broadcasters value,” the lawsuit reads in its introduction.

“The France family has realized monopoly profits through its ownership and control over the National Association of Stock Car Auto Racing (NASCAR), which has exploited its economic power as the sole premier stock car racing organization in the United States.”

The lawsuit lists several concerns that it claims represents antitrust behavior on the part of NASCAR, including:

NASCAR buys race tracks, then controls the racing that goes on at those tracks.
NASCAR prevents its teams from racing their machinery outside of NASCAR.
NASCAR requires its teams spend money on fielding their race cars, which are actually effectively owned by NASCAR.
NASCAR won’t allow teams to compete without agreeing wholeheartedly to its anticompetitive terms.
NASCAR asked teams for feedback in the charter negotiation process, then proceeded to ignore requested changes to implement the charter anyway.

The lawsuit continues by claiming that NASCAR’s status as the premier form of stock car racing in America has less to do with “the superior product or skill of NASCAR’s owners” and everything to do with the alleged monopolistic behavior that prevents any other rival from popping up.

When is the NASCAR lawsuit going to trial?

Right now, we’re effectively in the discovery phase of the lawsuit, which is set to go to trial on December 1, 2025 if a settlement isn’t reached — and 23XI and FRM aren’t looking for a settlement.

Discovery will continue until September, after which point we’ll know more about the fate of NASCAR and the two teams involved.

However, there’s already been plenty of major action in this case already.

NASCAR lawsuit: The story so far

One week after 23XI Racing and Front Row Motorsports filed its lawsuit against NASCAR, it filed a motion for a preliminary injunction that would allow them to operate in 2025 as chartered teams.

Basically, that would mean that the teams would be guaranteed to compete in every race, and that they’d secure the large part of the prize purse provided to chartered teams.

Ultimately, that injunction was denied because both charter and open agreements include a clause waiving the right to sue NASCAR. The teams needed to prove that competing as open teams would cause them “irreparable harm,” and the judge argued that they were not able to do so. Both teams were allowed to compete, but as open cars.

However, 23XI and FRM then requested the ability to sign the charter agreement without giving up the right to sue NASCAR on antitrust grounds. That request was denied.

They later argued that circumstances had changed and that they required a re-hearing, as both teams sought to purchase a charter from Stewart-Haas Racing — a move that was initially approved by NASCAR, but which NASCAR later stated would only be approved if those teams dropped its overall lawsuit.

After swapping judges, the preliminary injunction to allow 23XI and FRM to compete as chartered teams was granted. Meanwhile, NASCAR’s motion to dismiss the suit was denied. NASCAR then appealed the decision to allow the plaintiffs to compete as chartered teams.

On March 5, 2025, NASCAR also filed a counterclaim alleging that Curtis Polk, the long-time manager for Michael Jordan and 23XI Racing co-owner — had conspired with other racing teams to use tactics that would violate antitrust law.

On June 5, 2025, the courts then vacated the injunction requiring NASCAR to treat 23XI and FRM as chartered teams, which basically means that the approval was nullified. In order to prevent that, those teams filed for a temporary restraining order and another preliminary injunction.

Two weeks later, the court ruled that the teams would indeed operate as open teams, as there is no indication that grids for the rest of 2025 will exceed capacity and therefore result in those cars failing the make the grid. Further, the court asked that NASCAR agree not to sell or distribute the 23XI and FRM charters until an official ruling on the injunction.

A judge later guaranteed that the teams be guaranteed spots on the starting grid for the rest of the year, though they would still operate as “open” teams.

So far, that’s where things stand, and with the suit set to officially be heard in front of the courts in December, it’s likely that a decision will not be reached until 2026.