NASCAR’s legal battle with 23XI Racing and Front Row Motorsports (FRM) threatens the sport’s charter system.
The lawsuit accuses NASCAR of monopolistic practices. Federal courts have already issued rulings, putting the financial stability of teams like Michael Jordan and Denny Hamlin’s 23XI Racing in question.
NASCAR president Steve O’Donnell admitted he is baffled by the teams’ demands. In an August 19 interview with Eric Estepp, he said, “The teams sued us. We didn’t ask for this. We’re still not sure what they’re even asking for. What we’ve seen doesn’t have anything to do with why the lawsuit was brought. It’s a little bit perplexing.”
NASCAR Faces Major Legal Battle With 23XI and FRM Over Charter System
NASCAR’s legal standoff with 23XI Racing and Front Row Motorsports (FRM) has escalated. It is now one of the most consequential battles in the sport’s 80-year history. The conflict began after both teams rejected NASCAR’s final charter agreement proposal in September 2024. They later filed an antitrust lawsuit on October 2. The teams accused NASCAR and CEO Jim France of “unlawful monopolization” for financial gain.
At the heart of the dispute is a controversial clause barring teams from suing NASCAR, something 23XI and FRM refused to accept. The lawsuit has left executives like commissioner Steve Phelps acknowledging he’s open to settlement talks but unclear on the teams’ true objectives, per Sports Business Journal.
O’Donnell told Estepp the fight has already pulled focus away from the sport’s growth, adding, “What’s probably most disappointing, even for me personally, is that we’re spending time on this topic versus growing the sport.”
In response, both teams have filed for a temporary restraining order to preserve their charter status through the remainder of the 2025 season, a move that could decide whether they remain on the grid at all.
Court Ruling Threatens 23XI and FRM’s NASCAR Charters, Puts 2025 Season in Jeopardy
In December 2024, a U.S. District Court granted both teams a preliminary injunction that allowed them to race as chartered teams in 2025 and approve their purchase of Stewart-Haas Racing charters per ESPN.
But that relief was short-lived. On June 5, 2025, the Fourth Circuit Court of Appeals overturned the decision, ruling that 23XI and FRM couldn’t benefit from the charter system while actively challenging it, according to NBC Sports.
If that ruling holds, the teams may lose their six charters and race as “open teams,” which would:
- Slash prize money by up to 30% per race (per Motorsport.com).
- Risk non-qualification for marquee events like the Daytona 500.
- Put sponsorship deals in jeopardy.
The situation is reminiscent of when Michael Waltrip Racing struggled financially as an open team in the early 2010s. Losing charters could cripple FRM and put pressure on 23XI, which is co-owned by Michael Jordan and Denny Hamlin.
NASCAR’s Charter Battle With 23XI & FRM Could Reshape 2025 Season
The trial is currently set for December 1, 2025, but twists keep coming. On August 28, 2025, 23XI and FRM filed for a new injunction to restore their charter status, per Fox Sports. NASCAR fired back, arguing multiple parties are already eyeing the charters for 2026.
If the ruling doesn’t go their way, drivers like Bubba Wallace (23XI) and Todd Gilliland (FRM) could face uncertain futures.
The bigger picture? The case could reshape NASCAR’s entire charter system, which guarantees 36 of 40 starting spots. The 23XI and FRM lawsuit has thrust NASCAR into uncharted territory, with the 2025 season hanging in the balance.
NASCAR’s Steve O’Donnell Expresses Confusion Over 23XI and FRM Lawsuit