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 suit against NASCAR over the charter agreement NASCAR offered its teams. Eight of the ten franchise teams in the Cup Series signed the agreement, while 23XI and FRM did not. The two teams subsequently filed an antitrust lawsuit against NASCAR, accusing the sanctioning body of monopolistic business practices.
The teams sought an injunction to allow them to race as chartered cars in 2025 while the lawsuit continued. Chartered cars are guaranteed a spot in every race and receive a larger share of the purse money than open cars.
“At this time, plaintiffs have not met their burdens as required for a preliminary injunction,” U.S. District Judge Frank Whitney said. “Should circumstances change, claimants may file a renewed request for a preliminary injunction. The court therefore dismisses the plaintiffs’ claim without prejudice. However, the Court intends to assign this case to the expedited procedure as defined in the Court’s permanent orders.”
Because the motion was denied without prejudice, the teams have the opportunity to appeal the ruling. As part of its arguments for the injunction, 23XI, the team of 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 charters. Reddick is one of four drivers racing for the Cup Series title on Sunday.
Both Front Row and 23XI field two chartered cars in the Cup Series. Both teams plan to expand to three cars following the closure of Stewart-Haas Racing, but what happens to their purchases of each of the SHR charters they plan to acquire is unclear. NASCAR has publicly stated that it plans to run 32 chartered 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 prospects will be for 2025, barring a settlement between them and NASCAR that allows them to operate as chartered teams.
NASCAR and its teams agreed to the charter system in 2016 as a way for teams to have franchise value. Before charters, teams that quit had no value and could only sell parts and pieces to other teams and potential buyers. With a charter, a team looking to downsize or leave the Cup Series altogether can receive millions from another team for the guaranteed spot in each race.
In 2023, Live Fast Motorsports reportedly sold its charter to Spire Motorsports for approximately $40 million, after purchasing the charter two years earlier for a fraction of that price.
