DAYTONA BEACH, Fla. — The ongoing legal maneuvering between the sanctioning body of NASCAR and two of its premier series race teams took another turn Wednesday night.

NASCAR has filed an appeal to a district court’s recent ruling that the two plaintiff Cup Series teams — 23XI Racing and Front Row Motorsports, who sued NASCAR on the grounds that they believe it is a monopoly — should be allowed to continue competing with a charter during the 2025 season, even though they refused to sign the charter agreement NASCAR put forth in September.

According to the NASCAR brief to the Fourth Circuit Court of Appeals:

“The district court’s injunction orders flout federal antitrust law; misapply the established rules governing the use of preliminary injunctions; ignore unrebutted, legally significant evidence; and have sweeping implications for NASCAR’s 2025 Cup Series season.”

The appeals brief went on to state that “these injunctions misuse the judicial power” and essentially transform this case from a legal battle into a business negotiation. This, in turn, undermines “the mutual trust that has fueled NASCAR’s growth and success,” the brief states.

This is the latest development in a series of legal action that began with an anti-trust lawsuit filed on Oct. 2 in a Charlotte court, where 23XI Racing and Front Row Motorsports alleged that NASCAR essentially has an unlawful monopoly in the industry of stock car racing. The original lawsuit claims that NASCAR and CEO Jim France have used “anti-competitive and exclusionary practices” to “enrich themselves at the expense of premier stock car racing teams.”

Those ways NASCAR is enriching itself, according to the lawsuit, includes the fact that NASCAR owns a majority of the country’s big racetracks it uses; that NASCAR Cup teams can’t participate in any other stock car series; and that NASCAR mandates that its teams purchase cars and parts from NASCAR-approved suppliers.

23XI Racing is co-owned by Cup Series star Denny Hamlin and Michael Jordan, and their drivers are Tyler Reddick, Bubba Wallace and Riley Herbst. Front Row Motorsports is owned by Bob Jenkins, and the team’s drivers are Todd Gilliland, Noah Gragson and Zane Smith.

The appeals court is expected to hear arguments in May.

Contentious charter issue at center of lawsuit

The most contentious part of the lawsuit can be traced back to the negotiations of NASCAR’s charter system. And to understand the future charter system, you must first understand the charter system that was adopted in 2016 and was supposed to run through 2024.

Under the 2016 deal, Cup race teams operated like franchises in other professional sports did, a departure from how it used to be. Think of how the New York Yankees are a franchise that belongs to Major League Baseball. NASCAR’s charter system guaranteed entry into each race and a portion of the purse — hoping that it would deliver stability and long-term value to existing team owners, which, in theory, would lead to more investment from said team owners to make the enterprise more competitive and generally better.

However, many teams claimed as early as two and a half years ago that the economic model in NASCAR is “broken.” Teams said at the time that upward of 90% of the sport’s value resides with NASCAR and the tracks, forcing teams to be too heavily dependent on sponsorships for revenue. Jeff Gordon, vice chairman of Hendrick Motorsports, told reporters at the time that “where we’re currently at is not sustainable.”

Teams figured that two ways to help rectify the revenue issue was to negotiate more money going toward teams in the media rights deal and to establish a new charter agreement. The media rights deal largely accomplished that goal — the deal delivers approximately 50% of that media revenue to the teams, the brief states, which is “a substantial increase” from previous deals.

The charter negotiations, however, weren’t as harmonious. The race teams sought several key measures — most important among them being that NASCAR made the charters system permanent — but NASCAR made no such concession in their final charter offer. According to media reports, NASCAR put out a final “take it or leave it” charter agreement — which will run through 2031 — and told race teams to sign it by Sept. 6.

23XI and FRM refused to sign the deal, while 13 of the 15 race teams signed it. But several team representatives went on to tell The Association Press and other outlets that they felt pressured to do so, or else NASCAR might eliminate the charter system altogether for 2025 and beyond.

So what’s happened since Oct. 2, when the lawsuit was filed?

As a result of not signing the deal, 23XI Racing and Front Row Motorsports were faced with having to race as unchartered teams. Two milestones in the litigation process, however, allowed the two teams to compete as chartered teams.

The first milestone came Dec. 18, when Judge Kenneth Bell in Western District of North Carolina granted 23XI and FRM their preliminary injunction request, which allows the teams to race as charter teams with three chartered cars each in 2025. NASCAR later requested for Bell to dismiss the lawsuit entirely — a request that he denied on Jan. 10.

That brings us to Wednesday, when NASCAR’s legal team, led by Christopher Yates, filed an appeals brief that states that the district court’s decisions “were riddled with errors.”

Among those errors, according to NASCAR in Tuesday’s filing:

— The district court stated that the race teams’ injunctions “maintained the status quo.” However, the injunctions disrupted the status quo by “forcing NASCAR to provide Plaintiffs with the benefits of a contract they rejected and NASCAR subsequently withdrew.”

— The district court is “compelling NASCAR to do business with its litigation adversaries under terms they are actively contesting as anti-competitive.”

“At this point, NASCAR would prefer to extend the perks of the 2025 Charter to owners committed to enhancing NASCAR’s competitiveness,” Tuesday’s filing states, “with other sports for fans, sponsors and media dollars — rather than owners that undermine NASCAR’s brand.”

A jury trial on the Oct. 2 lawsuit is scheduled to begin Dec. 1.

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