NASCAR argues 23XI, Front Row 'have no logical reason' for charter status

Much of what appeared in a Wednesday evening legal filing from NASCAR in response to a new preliminary injunction motion from 23XI Racing and Front Row Motorsports covers familiar ground in defending itself in the ongoing antitrust lawsuit and countersuit.

Earlier in the month, the federal appeals court in Richmond, Virginia overturned a decision from a district judge that granted the two teams what amounted to ‘chartered status’ this season -- meaning that they would soon have to begin racing as 'open' teams and without all the financial perks entitled to those with charters.

Read more: Why two Cup teams and NASCAR are suing each other

In response, the two teams filed a new preliminary injunction request to the district judge that granted the one that was just appealed, arguing on Tuesday that they have new evidence in support of a need for de facto chartered status.

Much of those details, and NASCAR's response on Wednesday, is under seal and redacted but the Sanctioning Body continues to characterize 23XI and Front Row as stalling to get through this season with charter status after an unfavorable ruling from the Fourth District. The trial for the antitrust lawsuit and countersuit is scheduled for December 1.

It also makes the argument that 23XI and Front Row cannot even make the case that an injunction preserves the status quo because the two teams do not actually possess the charters because they gave them up upon not signing the 2025-2031 extension document in September that resulted in the lawsuit.

As has been the NASCAR argument for almost a year now, NASCAR claims that 23XI and Front Row are not pursuing an antitrust lawsuit but instead are trying to use litigation to force the terms it was not able to secure after two plus years of negotiations.

Read more: What is NASCAR's charter system and how it works

The Fourth Circuit, through Judge Paul V. Niemeyer, said the two teams were seeking ‘to have their cake and eat it too’ in suing (in part) over a clause in the charter agreement, section 10.3 that prohibits participating teams from bringing litigation against NASCAR, while also wanting the perks of said agreement that it didn’t agree to terms over.

NASCAR’s argument is the following:

• 23XI and Front Row are taking a third attempt at an injunction, when one failed in front of the district court and a second failed in appeals court
• That the Fourth Circuit agrees that 10.3 clause does not harm competition
• 23XI and Front Row no longer have charters
• Antitrust court is an inappropriate arena for contract disputes

NASCAR also accuses 23XI and Front Row ‘manufactured evidence of irreparable harm and false declarations’ in arguing on behalf of the injunction.

Specifically, in November and December, 23XI and Front Row were able to convince Judge Kenneth D. Bell that harm was imminent due to a clause in Tyler Reddick’s contract that would trigger a release if the team did not have a charter.

“Plaintiffs saw an opening in the Court’s decision and decided to take another shot at obtaining the Charter benefits they rejected in September. But Plaintiffs had a problem. Before their counsel proclaimed in open court at the PI hearing that both teams would fail without Charters, their drivers and sponsors had not indicated any intent to abandon Plaintiffs. In fact, drivers and sponsors had either expressed publicly that they had no concerns about 23XI and FRM racing as Open teams for 2025, or had said nothing at all. Mr. Reddick told the press in October 2024 he had no concerns about the lawsuit.”

NASCAR also produced redacted evidence to dispute the sponsorship opt out narrative.

" … And Plaintiffs manufactured evidence of harm to support their second (preliminary injunction) motion, and misled the Court in declarations. This means that Plaintiffs’ latest submissions should, at the very least, be viewed skeptically."

Beyond all of this, NASCAR’s legal argument on Wednesday states that 23XI and Front Row ownership, leadership and drivers have all expressed intent to race this season with or without charters, therefore, the latter being forced by appeals court would not produce ‘imminent harm,’ which is a requirement of an injunction.

In the response, NASCAR stated that there will be no more than 40 cars the next two races at Dover and Indianapolis, therefore there is no harm in terms of missing a race.

However, charters also provide increased revenue to holders and so the two teams and their three cars each would no longer receive that money. ‘Open teams’ earn less than a third of the money they would earn as a chartered team.

NASCAR wants 23XI and Front Row to pay back what has been paid through the program thus far so they can pay it to the teams that did sign the charter agreement instead.

23XI and Front Row stated in their filing that NASCAR has “signaled its intention to immediately move or sell (their) charters to other entities — putting (23XI Racing and Front Row Motorsports) in irreparable jeopardy of never getting their charters back and going out of business.”

NASCAR in response says, again, that the teams do not own these charters and that this process is damaging the Sanctioning Body’s prospects of finding organizations who want to race in 2026 under the terms 13 of the 15 teams agreed to terms over.

From NASCAR’s response:

“Although based on the false premise that Plaintiffs have Charters, and notwithstanding the substantial interest in Charters from motorsports companies racing in INDYCAR, Xfinity, and other series, NASCAR has represented it will not sell any Charters before the Court can rule on Plaintiffs’ motion for preliminary injunction.

“Plaintiffs’ submissions portray running Open as a nightmare but their out-of-court representations are the opposite. In addition to the out-of-court confirmation that Plaintiffs will race Open (see page 9, above), Plaintiffs confirmed in deposition that they will race Open. For instance, Michael Jordan confirmed in deposition that 23XI would complete 2025 as an Open team: “Q. Does 23XI have plans to race as an open team if that injunction is overturned? A. For the remainder of the year? Yes, we would race.”

NASCAR once again makes the point to that painting the league as a monopoly and demanding charter status have no correlation to each other.

“Plaintiffs have no prospect of obtaining their requested relief, irrespective of the trial outcome. The relief of being awarded six Charters—a benefit worth hundreds of millions of dollars—is completely disconnected from the liability theories Plaintiffs are now pushing—such as challenging NASCAR’s acquisition of tracks and a minor racing series or its restrictions on its intellectual property.

“Plaintiffs fail to demonstrate how forcing NASCAR to grant them six Charters—thus taking Charters away from the many other potential owners who are excited about racing in NASCAR under the current Charter system—could possibly preserve or restore competition in Plaintiffs’ alleged relevant market. This glaring disconnect again demonstrates the true motive behind this case: to negotiate better contractual terms and obtain the valuable assets Plaintiffs gave up when they did not sign Charters, not to remedy any supposed antitrust issue.”

The judge could rule as early as Thursday whether to issue a restraining order and the new injunction.