23XI, Front Row reject NASCAR's new countersuit arguments

“None of the new allegations in NASCAR’s amended counterclaim fix this legal deficiency. As shown in Counter-Defendants’ opposition to NASCAR’s motion to amend the counterclaim, NASCAR’s new allegations cherry-pick quotes from documents produced in discovery in which the chartered teams discussed trying to maintain unity in the joint negotiations in which NASCAR agreed to participate.”

…

“Further, NASCAR has not alleged that Counter-Defendants and the other race teams conspired to restrain competition in any market where they actually compete. To be sure, NASCAR teams compete in some respects, such as for drivers and sponsors and against one another on the racetrack for prize money. But there is no allegation in the amended counterclaim, nor could there be, that teams compete with each other when jointly negotiating the common economic terms of the Charter Agreement with NASCAR.”

…

“NASCAR has not alleged Counter-Defendants or any race team ever skipped a Cup Series or exhibition race. Rather, NASCAR at most alleged a non-actionable attempted group boycott of an exhibition race, which NASCAR has since disclaimed as the basis for its Section 1 claim.”

These three snippets from a Friday filing from 23XI Racing and Front Row Motorsports to NASCAR’s amended countersuit against them largely sum up the foundation of their argument in response.

NASCAR claims in its counter-filings that 23XI and Front Row, alongside the other 13 teams that compete in the Cup Series, were in violation of antitrust law in how it jointly negotiated with the Sanctioning Body the terms of the 2025-2031 charter agreement extension.

The two teams respond that there is no legal requirement that prevents sporting entities that compete with each other from being able to jointly negotiate with a league. It also claims that even if there were, it doesn’t matter because NASCAR ultimately and successfully individually negotiated with 13 of the 15 teams signed agreements.

They did so via one-on-one meetings after joint negotiations broke down.

“The amended counterclaim makes the wholly conclusory assertion that the joint negotiations caused NASCAR to pay ‘supracompetitive prices’ to the teams in the 2025 Charter Agreement.

“But NASCAR does not provide a plausible theory, backed by any non-conclusory allegations, to show how this can be the case in light of the fact that NASCAR admits that it abandoned the joint negotiations and conducted individual negotiations with the teams that led to 13 teams signing the 2025 Charter Agreement on the terms demanded by NASCAR.”

The teams also state that the joint negotiations between the Race Team Alliance and NASCAR is also what produced the inaugural charter agreement in 2016.

“It is also undisputed that NASCAR agreed to engage in joint negotiations with the RTA members for the renewal of charters more than two years before the 2016 Charter Agreements were scheduled to expire because of the mutual benefit that such negotiations would provide to both NASCAR and the teams.”

Going back to the boycott matter, NASCAR alleges that 23XI and Front Row participated in an attempted boycott of the 2024 Daytona 500 qualifying races, which was orchestrated by 23XI investor Curtis Polk.

Polk, who is the longtime agent of team co-owner Michael Jordan, also spearheaded the Team Negotiating Committee that jointly negotiated with NASCAR over the charter agreement extension alongside Hendrick Motorsports’ Jeff Gordon, Joe Gibbs Racing’s Dave Alpern and RFK Racing’s Steve Newmark.

For one, the two teams basically say NASCAR has no proof and that at most, Front Row had nothing to do with any alleged conspiracy by a 23XI Racing co-owner or members of the Team Negotiating Committee.

“But these new allegations do not substantively go beyond the prior claims that Front Row participated in the RTA and its formulation of joint proposals to be presented to NASCAR through TNC.

“As previously shown, merely participating in a trade association like the RTA, or in its joint negotiations voluntarily agreed to by NASCAR, is not sufficient to show that Front Row participated in any actionable conspiracy against NASCAR.”

All told, 23XI and Front Row Motorsports are asking the Western District of North Carolina and Judge Kenneth D. Bell to dismiss the expanded countersuit filed by NASCAR earlier this month.