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Tag: Jim France

  • NASCAR settles federal antitrust case, gives all teams the permanent charters they wanted

    CHARLOTTE, N.C. (AP) — Michael Jordan and NASCAR chairman Jim France stood side-by-side on the steps of a federal courthouse as if they were old friends following a stunning settlement Thursday of a bruising antitrust case in which the Basketball Hall of Famer was the lead plaintiff in a lawsuit accusing the top racing series in the United States of being a monopolistic bully.

    The duo was flanked by three-time Daytona 500 winner Denny Hamlin and Curtis Polk, the co-owners of 23XI Racing with Jordan, Front Row Motorsports owner Bob Jenkins and over a dozen lawyers as they celebrated the end to an eight-day trial that ultimately led NASCAR to cave and grant all its teams the permanent charters they wanted.

    “Like two competitors, obviously we tried to get as much done in each other’s favor,” Jordan said, towering over the 81-year-old France. “I’ve said this from Day 1: The only way this sport is going to grow is we have to find some synergy between the two entities. I think we’ve gotten to that point, unfortunately it took 16 months to get here, but I think level heads have gotten us to this point where we can actually work together and grow this sport. I am very proud about that and I think Jim feels the same.”

    France concurred.

    “I do feel the same and we can get back to focusing on what we really love, and that’s racing, and we spent a lot of time not really focused on that so much as we needed to be,” France said. “I feel like we made a very good decision here together and we have a big opportunity to continue growing the sport.”

    A charter is the equivalent of the franchise model used in other sports and in NASCAR it guarantees 36 teams a spot in every top-level Cup Series race and a fixed portion of the revenue stream. The system was implemented in 2016 and teams have argued for over two years that the charters needed to be made permanent — they had been revokable by NASCAR — and the revenue sharing had to change.

    NASCAR, founded and privately owned by the Florida-based France family, never considered making the charters permanent. Instead, after two-plus years of bitter negotiations, NASCAR in September 2024 presented a “take-it-or leave-it” final offer that gave teams until end of that day to sign the 112-page document.

    23XI and Front Row refused and sued, while 13 other organizations signed but testimony in court revealed many did so “with a gun to our head” because the threat of losing the charters would have put them out of business.

    Jordan testified early in the trial that as a new team owner to NASCAR — 23XI launched in 2021 — he felt he had the strength to challenge NASCAR. Eight days of testimony went badly for NASCAR, which when it began to present its case seemed focused more on mitigating damages than it did on proving it did not violate antitrust laws.

    Although terms of the settlement were not released — NASCAR was in the process of scheduling a Thursday afternoon call with all teams to discuss the revenue-sharing model moving forward — both Jordan and NASCAR said that charters will now be permanent for all teams. 23XI and Front Row will receive their combined six charters back for 2026.

    An economist previously testified that NASCAR owes 23XI and Front Row $364.7 million in damages, and that NASCAR shorted 36 chartered teams $1.06 billion from 2021-24.

    “Today’s a good day,” Jordan said from the front-row seat he’s occupied since the trial began Dec. 1 as he waited for the settlement announcement.

    U.S. District Judge Kenneth Bell, who had presided over two days of failed settlement talks before the trial began, echoed the sentiment. Bell told the jury that sometimes parties at trial have to see how the evidence unfolds to come to the wisdom of a settlement.

    “I wish we could’ve done this a few months ago,” Bell said in court. “I believe this is great for NASCAR. Great for the future of NASCAR. Great for the entity of NASCAR. Great for the teams and ultimately great for the fans.”

    The settlement came after two days of testimony by France and the Wednesday night public release of a letter from Bass Pro Shops founder Johnny Morris calling for NASCAR Commissioner Steve Phelps to be removed.

    The discovery process revealed internal NASCAR communications in which Phelps called Hall of Fame team owner Richard Childress a “redneck” and other derogatory names; Bass Pro sponsors Childress’ teams, as well as some others, and Morris is an ardent NASCAR supporter.

    Childress gave fiery testimony earlier this week over his reluctance to sign the charter agreement because it was unfair to the teams, which have been bleeding money and begged NASCAR for concessions. Letters from Hall of Fame team owners Joe Gibbs, Rick Hendrick, Jack Roush and Roger Penske were introduced in which they pleaded with France for charters to become permanent; France testified he was not moved by the men he considers good friends.

    Hendrick and Penske, who were both scheduled to testify Friday, expressed gratitude that a settlement had been reached. Penske called it “tremendous news” and said it cleared the way to continue growing the series.

    “Millions of loyal NASCAR fans and thousands of hardworking people rely on our industry, and today’s resolution allows all of us to focus on what truly matters — the future of our sport,” Hendrick said. “This moment presents an important opportunity to strengthen our relationships and recommit ourselves to building a collaborative and prosperous future for all stakeholders. I’m incredibly optimistic about what’s ahead.”

    The settlement came abruptly on the ninth day of the trial. Bell opened expecting to hear motions but both sides asked for a private conference in chambers. When they emerged, Bell ordered an hourlong break for the two sides to confer. That turned into two hours, all parties returned to the courtroom and Kessler announced an agreement had been reached.

    “What all parties have always agreed on is a deep love for the sport and a desire to see it fulfill its full potential,” NASCAR and the plaintiffs said in a joint statement. “This is a landmark moment, one that ensures NASCAR’s foundation is stronger, its future is brighter and its possibilities are greater.”

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    AP auto racing: https://apnews.com/hub/auto-racing

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  • NASCAR chairman refuses to budge on team charters in testimony during Michael Jordan’s lawsuit

    CHARLOTTE, N.C. (AP) — NASCAR Chairman Jim France testified Tuesday in Michael Jordan’s federal antitrust lawsuit against his family that he still has not changed his mind on granting teams permanent charters, and evidence showed he entered negotiations on a new revenue-sharing agreement determined to thwart teams’ efforts for a better deal from the stock car series.

    France was the final witness called by attorneys for Jordan’s 23XI Racing and Front Row Motorsports on the seventh day of the trial. Those race teams have accused NASCAR of being a monopolistic bully that engages in anticompetitive business practices.

    Also called Tuesday was Hall of Fame team owner Richard Childress, who testified that he only signed the 2025 revenue-sharing agreement because refusing to do so would have put Richard Childress Racing out of business.

    NASCAR Commissioner Steve Phelps testified to the frustrating two-plus years of negotiations between the top motorsports series in the United States and its race teams. The plaintiffs introduced several documents detailing communication between NASCAR executives that showed France was stubbornly opposed to granting teams permanent charters throughout the process.

    The charter system is equivalent to the franchise model used in other sports. In NASCAR, a charter guarantees cars a spot in the 40-car field each week, as well as specified financial terms.

    Asked by plaintiffs’ attorney Jeffrey Kessler if he has changed his stance on making charters permanent, France said, “No, I have not.”

    Kessler later introduced a summary of notes from the first meeting of NASCAR executives on how they would approach negotiations with the teams over the new agreements. Steve O’Donnell, now the president of NASCAR, wrote in those notes, “Jim’s overarching comments — we are in a competition. We are going to win.”

    France’s position never changed, even though — as evidence showed — he received pleas from Hall of Fame team owners Joe Gibbs, Rick Hendrick, Jack Roush and Roger Penske. All four are close personal friends, France said on the stand Tuesday.

    France became chairman of the series his father founded in 1948 following the 2019 resignation of his nephew, Brian. NASCAR has always been privately owned by the Florida-based family, and Brian France negotiated the initial charter system that began in 2016 as a response to teams complaining they were bleeding money at an unsustainable rate.

    Jim France, who is 81, was soft-spoken on the stand and needed many questions repeated, and he said on numerous topics that he was either unable to recall, did not remember or was not sure — even in response to evidence introduced that the France Family Trust received $400 million in distributions from 2021 through 2024 and that NASCAR is valued at $5 billion.

    He wasn’t sure of the title his niece, Lesa France Kennedy, holds with NASCAR, or the ownership percentages between the two. Evidence showed Jim France owns 54% of NASCAR, while France Kennedy, the vice chair, owns 36%. France also testified he believes he is paid in “the $3.5 million range” as chairman.

    Richard Childress details his dissatisfaction

    Childress spoke to the pressure he felt to sign the charter agreement.

    “I would not have signed those charters if I was financially able to do what I do,” the six-time championship winning owner testified. “We are a blue-collar operation.”

    Childress has participated in NASCAR for 60 years and has a longtime personal relationship with the Frances. He testified that he pleaded with Jim France for the charters to be made permanent instead of renewable, and France refused.

    Childress testified he supports the charter system because before its implementation race teams “were worth 10 cents on the dollar at most. We didn’t have nothing.”

    He admitted that the charters added value to his team, but said the equity falls short of its financial potential if the charters were permanent. An economist testified that NASCAR owes 23XI and Front Row $364.7 million in damages, and that NASCAR shorted 36 chartered teams $1.06 billion from 2021-24.

    When Childress’ October declaration of his support for charters was introduced, Childress insisted NASCAR attorney Christopher Yates also show the jury language added to the statement in which Childress pushes for the charters to be permanent.

    Childress said he added those sentences to the declaration, which had been pre-written for him to sign.

    Phelps details negotiations with teams

    NASCAR commissioner Phelps noted that Jordan’s financial advisor would not compromise on key issues in the negotiations.

    Phelps, who was president of NASCAR during the negotiations, said Jordan right-hand man Curtis Polk was the lead representative for the teams and held firm in their demand for increased revenue, permanent charters, a voice in governance and one-third of any new revenue streams.

    The deal finally presented to the teams in September 2024 did not include permanent charters or a voice in governance, but NASCAR gave the teams a firm deadline to accept its final offer or forfeit their charters. 23XI Racing, owned by Jordan, Polk and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins, were the only two teams out of 15 organizations that refused to sign. They sued instead.

    Phelps, promoted to become NASCAR’s first commissioner earlier this year, testified that he worked hard to get the teams the best deal possible. But he said the teams’ initial request for $720 million in guaranteed revenue would have put NASCAR out of business.

    At the same time, Polk would not budge, either.

    “It was one of the most challenging and longest negotiations I’ve ever been part of,” said Phelps, who admitted he didn’t particularly enjoy negotiating with Polk, who was at the time the representative for the “Team Negotiating Council.”

    “The TNC never wavered off their four pillars. It was just the same thing, the same thing, and that was very frustrating,” Phelps said.

    Phelps testified at one point that NASCAR believed it had landed on a new charter agreement that satisfied the teams but it was contingent on NASCAR finalizing its new media rights deal.

    “I thought we’d just plug in the numbers,” said Phelps, who testified NASCAR was hoping to land a media deal worth $1.2 billion. When it became clear the media rights deal wouldn’t net that much money, Phelps said the teams asked to set a floor in negotiations.

    NASCAR ultimately got a media deal worth $1.05 billion — still an increase of $33 million a year from the previous deal — and Phelps said “every dollar” went to the race teams when it began this year.

    However, the ultimate revenue payout to teams is $431 million annually, the charters are not permanent and the teams did not get a voice in rules and regulations.

    Even so, Phelps testified he believed the charter agreement was “a fair deal.”

    Faster pace

    U.S. District Judge Kenneth Bell has repeatedly admonished both sides to pick up the pace of the trial, and once France’s testimony concludes Wednesday, NASCAR will begin to present its defense.

    NASCAR has said it has a witness list of 16 people, but Yates informed Bell he can trim “four or five” names from it and is hopeful to wrap his defense by Friday.

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    AP auto racing: https://apnews.com/hub/auto-racing

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  • Economist says NASCAR owes $364.7M to teams in antitrust case

    CHARLOTTE, N.C. (AP) — An economist testified in Michael Jordan’s federal antitrust trial against NASCAR that the racing series owes a combined $364.7 million in damages to the two teams suing it over a revenue-sharing dispute.

    Edward Snyder, a professor of economics who worked in the antitrust division of the Department of Justice and has testified in more than 30 cases, including “Deflategate” involving the NFL’s New England Patriots, testified on Monday. He gave three specific reasons NASCAR is a monopoly participating in anticompetitive business practices.

    Using a complex formula applied to profits, a reduction in market revenue, and lost revenue to 23XI Racing and Front Row Motorsports from 2021-24, Snyder came up with his amount of damages owed. Snyder applied a 45% of revenue sharing he alleged Formula 1 gives to its teams in his calculations; Snyder found that NASCAR’s revenue-sharing model when its charter system began in 2016 gave only 25% to the teams.

    The suit is about the 2025 charter agreement, which was presented to teams on a Friday in September 2024 with a same-day deadline to sign the 112-page document. The charter offer came after more than two years of bitter negotiations between NASCAR and its teams, who have called the agreement “a take-it-or-leave-it” ultimatum that they signed with “a gun to their head.”

    A charter is similar to the franchise model in other sports, but in NASCAR it guarantees 36 teams spots in the 40-car field, as well as specific revenue.

    Jordan and three-time Daytona 500 winner Denny Hamlin for 23XI, along with Front Row Motorsports and owner Bob Jenkins, were the only two teams out of 15 to refuse the new charter agreement.

    Snyder’s evaluations found NASCAR was in fact violating antitrust laws in that the privately owned racing series controls all bargaining because “teams don’t have anywhere else to sell their services.” Snyder said NASCAR controls “the tracks, the teams and the cars.”

    Snyder repeatedly cited exclusivity agreements NASCAR entered into with racetracks after the charter system began. The agreements prevent tracks that host NASCAR from holding events with rival racing series. Prior to the long-term agreements, NASCAR operated on one-year contracts with its host racetracks.

    The Florida-based France family founded NASCAR in 1948 and, along with Speedway Motorsports, owns almost all the tracks on the top Cup Series schedule. Snyder’s belief is that NASCAR entered into exclusivity agreements with tracks to stave off any threats of a breakaway startup series. In doing so, he said it eliminated teams’ ability to race stock cars anywhere else, forced them to accept revenue-sharing agreements that are below market value, and damaged their overall evaluations.

    Snyder did his calculations for both teams based on each having two charters — each purchased a third charter in late 2024 — and found 23XI is owed $215.8 million while Front Row is owed $148.9 million. Based on his calculations, Snyder determined NASCAR shorted 36 chartered teams $1.06 billion from 2021-24.

    Snyder noted NASCAR had $2.2 billion in assets, an equity value of $5 billion and an investment-grade credit rating — which Snyder believes positions the France family to be able to pivot and adjust to any threats of a rival series the way the PGA did in response to the LIV Golf league. The PGA, Snyder testified, “got creative” in bringing in new revenue to pay to its golfers to prevent their defections.

    Snyder also testified NASCAR had $250 million in annual earnings from 2021-24 and the France family took $400 million in distributions during that period.

    NASCAR contends Snyder’s estimations are wrong, that the 45% F1 model he used is not correct, and its own two experts “take serious issue” with Snyder’s findings. Defense attorney Lawrence Buterman asked Snyder his opinion on NASCAR’s upcoming expert witnesses and Snyder said they were two of the best economists in the world.

    Slow pace of trial

    Snyder testified for almost the entirety of Monday’s session — the sixth day of the trial — and will continue on Tuesday. The snail’s pace has agitated U.S. District Judge Kenneth Bell, who heard arguments 30 minutes early Monday morning because he was annoyed that objections had been submitted at 2:55 a.m. and then 6:50 a.m.

    He needed an hour to get through the rulings, and testimony resumed 30 minutes behind schedule. When the day concluded, he asked the nine-person jury if they were willing to serve an hour longer each day the rest of the week in an effort to avoid a third full week of trial. He all said all motions must be filed by 10 p.m. each evening moving forward.

    Bell wants plaintiff attorney Jeffrey Kessler to conclude his case by the end of Tuesday, but Kessler told him he still plans to call NASCAR chairman Jim France, NASCAR commissioner Steve Phelps and Hall of Fame team owner Richard Childress, who was the subject of derogatory text messages amongst NASCAR leadership and has said he’s considering legal action.

    NASCAR has a list of 16 potential witnesses and Bell said he wanted the first one on the stand before Tuesday’s session concludes.

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    AP auto racing: https://apnews.com/hub/auto-racing

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