In NASCAR, the race car drivers and teams seem to have it all: lucrative sponsorship deals, high viewership, dedicated fans, and prize money. This smoke-and-mirrors obscures the reality behind the cameras—a reality unveiled in the recent antitrust lawsuit filed on 2 October 2024 in the U.S. District Court for the Western District of North Carolina by 23XI Racing and Front Row Motorsports against the National Association for Stock Car Auto Racing (NASCAR), and the current Chief Executive Officer and Chairman, James France.
NASCAR is privately owned by the France family, unlike other professional leagues such as the NFL and NBA, which are operated and owned by the teams themselves as members of those associations. The lawsuit alleges that through lucrative broadcast deals and other means, NASCAR and the France family have substantially grown their wealth while drivers and teams must deal with take-it-or-leave-it charter agreements and depend on individual team sponsorships. It is also alleged that NASCAR has imposed anti-competitive and exclusionary practices such as non-compete restrictions on racers, monopolizing race circuits and tracks, and the “Next Gen” car program.
The Plaintiffs are represented by the prominent antitrust and sports lawyer Jeffrey Kessler, who represented classes of Division 1 college football and basketball players in the landmark case that struck down anti-competitive NCAA rules barring player compensation. He also secured an equal pay class action settlement for the United States Women’s National Team players in the litigation against the United States Soccer Federation. The plaintiffs are seeking permanent injunctive relief to restore competition in stock-car racing, monetary damages for the harm suffered, and the continuation of that suffering while still racing under the anti-competitive terms of the charter agreements during the proceedings.
Charter Agreements
Allegedly, race car drivers and teams participated in NASCAR under year-to-year take-it-or-leave-it contracts, during which almost all revenues went to NASCAR, despite no guarantee for racers to participate in every Cup Series event until 2016, when a charter system was implemented. While charter agreements now guarantee that chartered teams participate in every Cup Series event, the terms allegedly remain the product of an anti-competitive market where teams lack the ability to negotiate. This is due to the lack of competition in top-tier stock car racing in the United States, which undermines the driver and teams’ leverage in such negotiations. This stems from the fact that NASCAR acquired the only other realistic competitor in stock car racing, the Automobile Racing Club of America Menards Series.
The 2016 Charter Agreement included the following problematic terms: teams do not receive any NASCAR sponsorship revenue, 37% of broadcast revenues were “pooled” to charter teams, and chartered teams and their owners were prohibited from competing or participating in any other stock car racing events that NASCAR did not authorize. These charter agreements were extended until the end of 2024.
For the 2025 Charter Agreement, NASCAR allegedly tried to prevent teams from jointly negotiating fairer terms by allowing individual teams to either not sign the renewed charters or agree to NASCAR’s terms in an hour deadline that was minimally extended due to outrage. The 2025 proposal allegedly did not provide a fair split of revenues, provided NASCAR full control over teams’ intellectual property rights, suppressed meaningful governance in the sport, banned antitrust actions, and prevented participation in any other automobile or truck racing events.
Monopolizing Race Car Tracks
Race circuits and tracks are essential for any competitive race series. NASCAR allegedly maintains its monopoly through purchasing race circuits and tracks, and enforcing exclusivity provisions for tracks it does not own. These actions are said to control access to the finite high-quality race circuits and tracks that have pedigree and can facilitate enough spectators. The pleading explains that a strong competitor to NASCAR would need twenty-four to twenty-eight races each year, which would likely require at least two superspeedway tracks, six intermediate tracks, twelve short tracks, and a handful of road course tracks. In 2019, NASCAR acquired International Speedway Corporation, a leading promoter of motorsport activities that owned twelve racetracks including prominent racetracks, and six tracks that hosted two NASCAR Cup Series. Ownership of these tracks allows NASCAR to refuse other premier stock car races at these tracks to maintain a monopoly, given the importance of access to tracks. For tracks and circuits that wish to host a Cup Series race which brings prestige and money, a NASCAR Sanction Agreement must be signed that prevents the track or circuit and third parties from promoting, hosting, conducting, or staging a stock car racing event at the facility that mimics the NASCAR series.
“Next Gen” Car Program
The pleading further alleges that NASCAR continues its exclusionary actions through the “Next Gen” car program, which was advertised as a business model that would increase the accessibility and affordability of stock car racing—for those that do not know—racing is expensive. The “Next Gen” car program implements rules concerning the homologation of the race car— the rules that the car must comply with to race in the series. Under this program, there are several limiting terms: teams must purchase standardized parts from single-source suppliers picked by NASCAR, teams are limited to seven cars per number, and NASCAR determines whether a car is repaired or replaced when a crash occurs. Also, the car becomes the property of NASCAR (despite the teams investing their own money into the car), preventing the car from being used in any other stock car race. To enter a different race, teams would need to purchase and create an entirely new car. It is alleged that it costs around $3 million per year in car parts for one charter team to participate in a full Cup Series schedule.
This lawsuit reveals many unfair practices aimed at enriching a private owner at the expense of the drivers and teams that are necessary for racing events. It invites us to imagine a different vision of a NASCAR organization. After personally being in the pit lane this summer, I can say that drivers and teams play a significant role in racing and do a lot for each event. This case will be one to watch as it proceeds and might be a catalyst for needed change in the sport.