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The lawsuit accuses NASCAR and CEO Jim France of “unlawful monopolization of premier stock car racing in order to enrich themselves at the expense of the premier stock car racing teams.”
The teams cite NASCAR’s ownership of many of the tracks at which it races, as well as requirements that teams buy their parts from suppliers chosen by NASCAR, as proof that the sanctioning body has a monopoly on the sport of stock car racing.
As part of the lawsuit, the teams asked for a preliminary injunction that would allow them to compete as chartered teams for 2025, something that they wouldn't have been able to do unless a judge struck the provision in the charter agreement prohibiting teams from filing an antitrust lawsuit against NASCAR.
Initially, their request for an injunction was denied by a federal judge who found that the teams hadn't showed that they would face "irreparable harm" if they weren't allowed to race as chartered teams. But yesterday, a different judge heard a renewed motion from the teams and decided to grant the injunction.
In his opinion, the court revealed that both 23XI Racing drivers, Bubba Wallace and Tyler Reddick, had informed the team that they may seek other options for 2025 should the team not be permitted to race as a chartered team. Obviously not having a charter would mean that the drivers were at risk for missing every race they attempted to qualify for, so it's no surprise that the drivers would rather seek a chartered team than risk missing a race due to an issue during qualifying.
According to the court's order, a provision in Reddick's contract with the team requires 23XI Racing to provide a chartered car for him to race. And last month, the driver informed the team that they were in breach of the contract, and had 30 days to cure it before he would become a free agent and be free to seek other employment for 2025:
"Specifically, on November 18, 2024, 23XI driver Tyler Reddick (who recently finished in fourth place in the 2024 Cup Series) notified the team that it had breached his Driver and Personal Services Agreement, which requires 23XI to “provide the Race Car prepared and entered by 23XI under a NASCAR Cup Series Charter Member Agreement … for Reddick to drive in all Cup Series Events,” and had 30 days to cure the breach."
And Wallace also told his team that he needed answers or he would look for another team for 2025:
"Driver Bubba Wallace informed 23XI that he needs to know how it intends to compete “immediately” so that he can explore seats with other teams."
It wasn't just drivers who were uncomfortable with the situation though. Monster Energy, which serves as a primary sponsor for Reddick, had already canceled a promotion with the team due to uncertainty surrounding their charter status for 2025, and had informed 23XI Racing that it was "reconsidering its entire relationship with 23XI."
Love's Travel Stops, one of the largest sponsors for Front Row Motorsports, also expressed their concern that the teams wouldn't be able to meet their contractual demands if they weren't granted a charter.
And it makes sense. These sponsors pour millions of dollars into a race team, and they want to know that their car isn't at risk of missing the race if they're sponsoring a team on any given weekend. The possibility of one of their sponsored cars not making the race would, at the very least, significantly decrease the value that the teams could provide and likely cause sponsors to cut back the amount of money they're willing to spend on sponsoring a car.
Also in his ruling, the judge ordered that both 23XI Racing and FRM be allowed to purchase charters from Stewart-Haas Racing, which closed up shop at the end of the 2024 season, as they had previously agreed upon, and that NASCAR must approve the transfer of the SHR charters to 23XI and FRM. So that means that both teams will be adding another car in 2025, and that these new cars will also be guaranteed a spot in the race.
Finally, the court ruled that NASCAR must remove the provision from the charter agreement that would prohibit 23XI Racing and FRM from proceeding with their lawsuit, meaning that the teams will be able to sign the charter agreement for 2025 while still bringing their antitrust claims against NASCAR - something that they wouldn't have been able to do had they signed the agreement back in October.
Obviously this is a major win for the teams, and one that Hamlin was clearly excited about when it was announced:
https://twitter.com/dennyhamlin/status/1869450869697282173 Now, would Wallace and Reddick really have left 23XI if the injunction hadn't been granted? My guess is no. The team had already committed to fielding cars for both drivers for the full season either way. But does this put the teams in a much stronger position going forward with their lawsuit? Absolutely. Big changes could be coming to NASCAR soon.