NASCAR contigency plans to run Cup races in house revealed in legal filing

In a Friday night legal filing, the latest development in the 23XI and Front Row Motorsport v. NASCAR antitrust dispute, the two teams are asking the court to issue a ‘summary judgment on the countersuit by the Sanctioning Body or make it a separate case and trial.

NASCAR filed a counterclaim against the two teams in March with allegations of anticompetitive behavior in violation of antitrust laws in the form of Curtis Polk, the longtime business partner of 23XI Racing co-owner Michael Jordan, spearheading a suggested boycott of the 2024 Duel at Daytona in addition to other illegal negotiating tactics over the 2025-to-2031 charter agreement extension.

A summary judgment can be issued when there are no issues beyond legal fact, allowing a judge to render a verdict without a jury, meaning that 23XI and Front Row are effectively asking Judge Kenneth D. Bell to rule against NASCAR so it can focus on its original claims during a trial set for December 1.

The legal representation for the teams summed up their position succinctly in its opening statements:

“This Court previously found that NASCAR’s amended counterclaim barely survived the ‘low bar’ for a motion to dismiss and that the counterclaim’s defects ‘are best addressed at Summary Judgment, with a more developed factual record.’ That moment has now arrived for NASCAR to ‘put up or shut up’ at summary judgment.”

NASCAR has until October 3 to respond to this motion.

Ultimately, NASCAR will have to prevail on antitrust grounds by proving Polk and the two teams participated in a ‘contract, combination, or conspiracy; that imposed an unreasonable restraint of trade.’

It’s the same thing, legally speaking, that the teams will be tasked with proving that NASCAR did at the December 1 trial.

23XI and Front Row state in their filing that collective negotiations are not anticompetitive and it is not as if NASCAR did not have the chance to communicate with teams individually because they did and it resulted in 13 of the 15 teams agreeing to terms.

As it pertains to the NASCAR allegations against Polk, the filing argues that 13 teams also chose a different path than the one eventually concluded by the 23XI investor.

“There is no factual basis for NASCAR’s allegation that Mr. Polk was somehow the individual orchestrator of the teams’ joint efforts to negotiate the charter system, which predate his participation by many years. Indeed, even after Mr. Polk joined the teams’ joint negotiation efforts in 2022, and eventually became one of four members of the (Teams Negotiating Committee), the undisputed evidence shows that the other teams often did not agree with Mr. Polk’s views and took individual positions in the negotiations that preclude as a matter of law any inference of an ‘agreement’ with him. This is best illustrated by the fact that 13 of the 15 teams individually agreed to the 2025 Charter Agreement despite Mr. Polk’s objection to its terms.

There is thus no evidence to allow a reasonable jury to find that Mr. Polk had the power, or exerted the influence, to inflict anticompetitive harm on NASCAR from any agreement with other teams.”

The filing also argues that Front Row Motorsports shouldn’t even be included in this countersuit because that team did not have a seat on the Teams Negotiating Committee and there is no evidence from NASCAR whatsoever of any alleged illegal anticompetitive behavior.

Gold codes

As part of the counterclaim, NASCAR accuses Polk of attempting to organize a boycott of the 2024 Duel at Daytona, which ultimately did not come to fruition.

However, and this came to light in the most recent hearing over an injunction, NASCAR has conceived of a response to a boycott or the teams not signing with what it called ‘gold codes,’ a series of responses to not having the usual teams competing in the Cup Series.

As part of this latest filing, the teams produced documentation of what those responses would look like.

As part of its boycott response plan, NASCAR had an 18-month strategy that could reduce the field size to 30 cars, or redistribute charter money to open teams with NextGen cars or even fill out fields with Xfinity or ARCA cars.

In the latter scenario, race fields would be decided in the following order:

NextGen (with charters)
NextGen (without charters)
Xfinity cars
ARCA cars

To make it work where these cars could compete together, NASCAR would work over six months towards balancing the competitive parameters of each cars through wind tunnel, track tests and dyno data.  

There was even a hypothetical test scheduled for Daytona in August and Homestead in October.

NASCAR even had a contingency to just build cars themselves and operate the entire field to contest Cup Series caliber races. 

They would have built a shop (last image above) to store all the cars and even set operational costs (below) to do.

As part of the plan to operate all the teams, they had a document where they would pay each driver $2 million dollars each ($72 million combined), road crews and nine per 36 cars and $1.5 million dollars across ($54 million), six pit crew members across 36 at $1.5 million combined and 38 building personnel at a combined salary of $4.7 million dollars.

It’s worth pointing out that NASCAR dated the Gold Code deck as June 27, 2024, which came two years into the negotiating period, and after the teams refused to show up to the Team Owner Council meeting in April 2023.

NASCAR had to have some plan and it also stated its reasoning on Page 4 of the Gold Codes deck.

“Teams may use ‘disruption’ as a negotiating tactic. This presentation is not meant to capture all possible scenarios but rather present response options and mitigation techniques to those actions that may affect the on-track product.”

In other words, all of this is a He Said versus He Said dynamic in that NASCAR says it purely had response option for any number of scenarios where 23XI and Front Row show this as examples of NASCAR’s anti-competitive stance towards the teams.

The overall argument

In totality, 23XI and Front Row essentially argue that NASCAR’s counterclaim is without legal merit because NASCAR’s Gold Codes show no shortage of participants to take the place of any team that did not sign the charter agreement.

“Moreover, NASCAR’s own expert and executives have stated that there were at least 150 teams with licenses to participate in Cup Series events who could have competed in the input market with the chartered racing teams.”

Therefore, no injury to NASCAR in the form of how teams negotiated.

The teams also argue that they don’t have the market power to act anticompetitively.

“NASCAR’s own submissions thus establish that the 15 chartered teams lacked any semblance of market power because, as NASCAR tells it, there were over 150 other licensed teams and other ‘eager’ ‘aspiring entrants’ to which NASCAR could turn.

“As a matter of antitrust law, no reasonable jury could find that 15 out of at least 150 licensed teams—or at most 10% of potential entrants—have market power over NASCAR  and neither NASCAR nor its experts estimate any greater market share for the (Race Team Alliance) members.”

The filing makes an argument that NASCAR, in the opinion of 23XI and Front Row, preferred to negotiate with the Race Team Alliance teams as opposed to any of the options displayed in the Gold Codes.

“At most, the evidence shows that NASCAR preferred purchasing the services of the RTA members at the lower domestic media revenue-share and other onerous terms it demanded of them, rather than turning to the more than 150 other racing teams that were licensed to compete in Cup Series races, or pursuing other options available to NASCAR (such as a vertical integration in which NASCAR would hire the drivers and only have its own teams race)

“But NASCAR’s preference for the RTA members at a below competitive market price does not provide any evidence that the racing teams which belonged to the RTA had any market power.”

All told, the teams says NASCAR has not shown any evidence of the teams being able to cause antitrust injury purely through joint negotiations, an assertion NASCAR will respond to in the weeks ahead.