A federal judge has denied 23XI Racing and Front Row Motorsports’ request for a preliminary injunction in their lawsuit against NASCAR.
The two teams filed a lawsuit against NASCAR over the charter agreement that NASCAR offered its teams. Eight of the Cup’s 10 franchise teams signed the agreement, while 23XI and FRM did not. The two teams then filed an antitrust lawsuit against NASCAR, accusing the sanctioning body of monopolistic business practices.
The teams sought an injunction to allow them to compete as rental cars in 2025 while the lawsuit continued. Rental cars are guaranteed places in all races and receive a larger share of the cash than open cars.
“At this time, plaintiffs have not met their burden as required for a preliminary injunction,” said U.S. District Judge Frank Whitney. “If circumstances change, plaintiffs may file a new motion for preliminary injunction. Therefore, the Court dismisses Plaintiffs’ motion without prejudice. However, the Court intends to assign this case to fast track as defined in this Court’s standing orders.”
Since the motion was denied without prejudice, the teams will have the opportunity to appeal the ruling. As part of its arguments for the injunction, 23XI, the team owned by Michael Jordan and Cup Series driver Denny Hamlin, said Monday that driver Tyler Reddick and the teams’ sponsors could be free to leave if The team did not have statutes. Reddick is one of four drivers competing for the Cup title on Sunday.
Both Front Row and 23XI feature two rental cars in the Cup Series. Both teams have been planning to expand to three cars after the closure of Stewart-Haas Racing, but it is unclear what happens with the purchases of each of the SHR cars they wish to acquire. NASCAR has publicly stated that it plans to operate 32 charter cars in 2025 instead of the 36 that were part of the original agreement.
If the teams do not appeal the ruling or the appeal is unsuccessful, it is unclear what their outlook will be for 2025, barring an agreement between them and NASCAR that allows them to compete as sanctioned teams.
NASCAR and its teams agreed to the charter system in 2016 as a way for teams to have franchise value. Before charters, closing teams were worthless and just bits and pieces to sell to other teams and potential buyers. With one statute, a team looking to downsize or exit the Cup Series entirely can receive millions from another team for a guaranteed spot in each race.
In 2023, Live Fast Motorsports reportedly sold its contract to Spire Motorsports for approximately $40 million after purchasing it for a fraction of that price two years earlier.
