NASCAR, 23XI and Front Row reveal ‘smoking gun’ documents in explosive hearing

It was made clear over the course of 90 minutes of oral arguments in a Charlotte, North Carolina court just how much tension and animosity exists as a result of the 23XI Racing and Front Row Motorsports v. NASCAR antitrust lawsuit and countersuit.

For much of the summer, both sides have been going through the fact discovery process, which entitled both the teams and sanctioning body to request (and be granted) access to documents or communications relevant to the case, not just by those involved, but also pertinent third parties as long as it did not break attorney-client privilege. 

Independent of the merits of their respective arguments, matters regarding legal anti-competitive definitions, it was made clear just how much disdain and mutual distrust exists as a result of everything that has transpired over the past four years.

Previously unseen messages

From NASCAR’s opposition report on a statement from Hamlin, himself:

“In short, I’m in for the fight with NASCAR. My despise of the France family runs deep, but whatever we do, please lets not sabotage our own business over principle when it comes down to it. Love you all and thank you for allowing me to be a part of it.”

In a June 6, 2024 text from Lauletta to Hamlin:

“I wish I knew what to do and what is the best investment path. Being in for the long haul and Jim dying is probably the answer.”

There were just as many provocative exchanges from NASCAR leadership in revealed (and previously redacted) text messages between the likes of (Executive Vice Chairwoman) Lesa France-Kennedy, (CEO) Jim France, (EVP, Chief Strategy Officer) Scott Prime, (President) Steve O’Donnell and (Commissioner) Steve Phelps.

In a text message between them, France-Kennedy felt a meeting with teams in April 2024 was ‘productive’ and ‘teams won’t get everything they want’ but they could reach middle ground.

Phelps responded with ‘productive? Insanity’ and said they had an internal chart, named the Amanda Chart, that detailed every agreement in terms of who any given deal provided more value to. Phelps alluded to ‘zero wins’ and  O’Donnell wrote ‘fuck the teams’ and that one agreement would set the sport back to its ‘tiny southern roots, the tiny sport of 1996.’

However, a NASCAR source was adamant in making clear that this was O’Donnell, now the president of the Sanctioning Body, was ‘pushing back with the family for the teams, which they eventually did and led to the higher revenues.’ The ‘zero wins’ line is ambiguous in intent read without any additional context beyond what was provided during the hearing. 

This NASCAR source said 23XI and Front Row’s legal team ‘took this out of context’ and that O’Donnell stepped out of line, figuratively speaking, with his bosses in trying to help the teams.

Phelps typed ‘give them the (contract), pick a date and sign it or lose their charters.’

The full context of the May 21, 2024 texts provide a fuller picture:

O’Donnell: Lesa called. “Spoke to Gary (Crotty), Mike (Helton) and Jim (France). They all thought meeting was productive and that we just need to keep trying for to move the needle. Teams won’t get everything they want and hopefully we can just meet in the middle. I just listened as she didn’t want to hear any opinions but I of course didn’t hold back. I just asked for someone in the mtg to point out how any of our positions are going to grow the sport and position us for a big rights renewal in the future.

Phelps: Productive? Insanity. Look at the Amanda chart – zero wins for the teams.

Phelps: The draft must reflect a middle position of we are dead in the water – they will sign them but we are fucked moving forward

I feel better now. Thanks for that.

Prime: The approach of ‘here is a bit more money, fuck off everywhere else’ is a bold strategy

O’Donnell: And one that Lesa said both Mike and Gary thought is getting us close. Close to a comfortable 1996, fuck the teams, dictatorship, motorsport, redneck, southern, tiny sport.

The merits of the case

23XI Racing logo

Photo by: Adam Davis – Icon Sportswire – Getty Images

The entire reason both parties were even in court on Wednesday was actually to argue whether or not the teams should be granted three things as part of a preliminary injunction motion made in advance of the December 1 trial:

• Restoring the de facto chartered status of 23XI and Front Row
• Resuming payouts to the teams as if they were chartered teams
• Preventing NASCAR from transferring the charters they previously held the rights to

Recall that this same federal district judge, Kenneth D. Bell, issued an injunction in December that forced NASCAR to recognize the teams as if they were chartered even thought they did not sign the 2025-2031 agreement.

This ruling also forced NASCAR to accept the two teams purchasing one charter each from the shuttered Stewart-Haas Racing.

NASCAR appealed that decision and the Fourth Circuit of Appeals overturned that original decision. As far as NASCAR is concerned, it holds the four charters 23XI and Front Row gave up the rights to by not signing the agreement before the start of this calendar year.

In a filing last week, NASCAR stated that it has reached an agreement with a redacted organization for a charter transfer, thus, the two teams motioned to prevent them from doing so before the trial.

The teams say another organization acquiring their former charters would irreparably damage them in the sense that, if they lose these charters and go on to win the antitrust lawsuit after trial, getting them back would be impossible. 

NASCAR countered that it would be irreparable harm to the Cup Series to not fill out the grid with teams that want to be in the division and grow the sport.

NASCAR President Steve Phelps

Photo by: Chris Graythen – Getty Images

Judge Bell made this more than just a binary decision because he asked both parties why NASCAR couldn’t simply issue one of the four charters it has in reserve to issue at any point in its discretion. To his point, NASCAR ended last season with 36 chartered teams but the agreement allows the Sanctioning Body to issue up to four more for any reason — typically associated with the arrival of a new manufacturer like the rumored Honda and Dodge options.

Inside the courtroom discussions

Tyler Reddick, 23XI Racing Toyota

Photo by: Sean Gardner / Getty Images

Judge Bell asked NASCAR’s legal representation why the Sanctioning Body would not simply issue one of those four charters to this redacted organization as opposed to one those previously held by 23XI and Front Row.

Representing NASCAR, attorney Christopher Yates said that would harm the current charter owning teams due to how revenue is split amongst them but also due to charter scarcity because ‘scarcity drives value.’ Yates also said releasing one of the four additional charters is a matter of ‘uncertainty,’ to which Judge Bell said if NASCAR loses their antitrust trial with the teams, the uncertainty of those four charters would be the least of their concerns.

Judge Bell said that because losing the antitrust trial in December would possibly force NASCAR to have to sell tracks, the ARCA Racing Series and perhaps restructure the charter agreement entirely.

Additionally, the NASCAR defense includes an argument that the court cannot make the Sanctioning Body do business with someone it does not want to. And after all the harsh things Hamlin, Polk and Jordan have said about NASCAR and the France family, they don’t want to do business with 23XI and Front Row.

The rebuttal from Jeffrey Kessler, representing the teams, is that NASCAR so resents working with 23XI that it literally asked driver Bubba Wallace to make an appearance on Good Morning America this week to promote the start of the Cup Series Playoffs.

“That’s how much they hate us,” Kessler said oozing sarcasm 

Ultimately, Judge Bell says he will render a ruling on the preliminary injunction by next week while also warning both Yates and Kessler that he does not want to see the kind of personal slights that both attorneys, who are friends, levied at each other during the proceedings.

He also suggested to both that they need to make sure that they understand a Charlotte jury because they are unique and they need to do their homework with their local attorneys.

Bell also said it was clear to him that this is going to trial and that it is unlikely to be settled from ongoing mediation. Before the December trial, Bell says he is going to try his best to sort through all the things that need to happen first.

He needs to make determinations on the two sides’ disagreement of ‘material facts’ like how much revenue increases NASCAR gave to teams, given 23XI and Front Row allege a misrepresentation and fudging of the numbers. Expect that in October.

“I’m not going to let your animosity for each other inconvenience me,” Bell said in his stern closing statement. 

Additional details

A NASCAR document stated that the collective teams asked for $720 million, what the document characterized as a third of industry revenue. Kessler said the initial counter was for $450 million and that NASCAR ultimately gave the teams that signed $430 million.

NASCAR says it pays more in ‘team payment percentage’ that Formula 1 pays to Concorde Agreement teams in the form of 70 percent to 63 percent in 2023 and 69 percent to 62 percent in 2024. Kessler said NASCAR has misrepresented the figures in that they have frontloaded the payouts in this charter agreement, which decrease in subsequent years, while also not delivering any percentage of new revenue, no media increases, no permanent charters or no seats at the decision making table.

“No wins,” Kessler said, referencing the above detailed text from Phelps. 

Closing remarks

It has been NASCAR’s stance from the beginning that they do not address the media outside of the courtroom after hearings and that trend continued into Wednesday.

However, the usual verbose Kessler had just a limited statement and took no questions.

“I think NASCAR’s own documents speak for themselves,” Kessler said. “I think you finally got to see them and you can see what this case is about. I think NASCAR’s arguments against those documents speak for themselves. We are very happy to have had this opportunity and we look forward to Judge Bell ruling on this next week.”

He then opened the door for Jordan to issue a statement, also a rarity outside of the courthouse as he usually defers to Kessler.

“I’ve been a fan of the game for a long period of time,” Jordan said. “When we first started this whole process, I’ve always said that I want to fight for the betterment of the sport. “Even though they (NASCAR) try to point out that we made some money and we had a successful business, that’s not the point. The point is that the sport itself needs to continually change for the fans, as well as for the teams, as well as for NASCAR, too, if they understand that.”

“I feel like we made a good statement today about that, and I look forward to going down with the fire. If I have to fight this to the end for the betterment of the sports, I will.”