NASCAR teams fear ‘catastrophic’ impact of disclosing financial records during court fight

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CHARLOTTE, N.C. (AP) — Attorneys for 12 of NASCAR’s 15 race teams argued in federal court Tuesday that disclosing their financial records to the stock car series would be “catastrophic” to competitive balance and warned that making such details public would put them all in danger.

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The hearing was over a discovery dispute between NASCAR and the teams that are not parties in the ongoing antitrust suit filed by 23XI Racing, which is owned by retired NBA Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins.

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23XI and Front Row are the only two organizations out of the 15 that refused last September to sign take-it-or-leave offers on a new charter agreement. Charters are NASCAR’s version of a franchise model, with each charter guaranteeing entry to the lucrative Cup Series races and a stable revenue stream. Of the 13 teams that signed, only Kaulig Racing has submitted the financial documents NASCAR subpoenaed as part of discovery.

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The other 12 organizations are fighting against releasing the information to NASCAR and even argued that NASCAR asking for them violates the charter agreement, which claims all disputes must go to arbitration.

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U.S. District Judge Kenneth Bell of the Western District of North Carolina promised a quick ruling but, just like last week, seemed exasperated at the lengths being taken in this brawl that for now is heading toward a December trial.

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“I am amazed at the effort going into burning this house down over everybody’s heads,” Bell said at the end of the nearly two-hour hearing. “But I’m the fire marshal and I will be here in December if need be.”

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Attorneys for the teams say their financial records are private and there is no guarantee the information won’t be leaked; in a hearing last week, information learned in discovery was disclosed in open court.

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“It would be absolutely devastating to these race teams if their competitors were able to find out sponsorships on the cars, driver salaries and all revenue streams,” attorney Adam Ross said. “It cannot make its way into the public realm.”

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Ross said NASCAR has asked for 11 years of records and communications — including what Hendrick Motorsports spent on both its Garage 56 project building a car to race at the 24 Hours of Le Mans and the cost of Kyle Larson running both the Indianapolis 500 and the Coca-Cola 600 the last two seasons.

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“NASCAR has gone a step too far,” Ross said.

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NASCAR argued it needs the financials to understand profit margins and whether teams are actually unable to make ends meet under the charter agreement. NASCAR vowed to redact details to conceal team identities, a suggestion that was met with skepticism from team attorneys who contended it would be easy to connect the dots and, for example, figure out which contracts belong to, say, Team Penske.