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Michael Jordan's 23XI Racing team sues NASCAR and CEO Jim France

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NASCAR Teams File Antitrust Lawsuit Against NASCAR and CEO #

Two prominent NASCAR teams have filed an antitrust lawsuit against NASCAR and its CEO, alleging anticompetitive practices and monopolistic control of the sport. The lawsuit claims that the current system is unfair to teams, drivers, sponsors, and fans.

Key Points of the Lawsuit #

  • The plaintiffs argue that NASCAR operates without transparency and stifles competition.
  • They claim NASCAR’s practices unfairly benefit the organization at the expense of team owners, drivers, sponsors, partners, and fans.
  • The suit alleges that NASCAR controls various aspects of the sport, including:
    • Purchasing premier racetracks exclusive to its races
    • Requiring teams to buy parts from single-source suppliers chosen by NASCAR
    • Preventing teams from participating in other stock car races

Financial Concerns #

The lawsuit highlights financial struggles faced by teams:

  • Teams are reportedly struggling to make reasonable profits.
  • Investors must put tens of millions of dollars into teams.
  • One team owner claims to have not made a profit in 20 years of operation.
  • The cost to run one chartered team for a full season of Cup Series races is estimated at about $18 million per year.

In contrast, the suit notes that NASCAR recently signed a new seven-year media deal valued at $7.7 billion, representing a 40% increase over its previous deal.

Industry Structure and Ownership #

The lawsuit points out that unlike most professional sports leagues, which are owned and operated by their teams and team owners, NASCAR is privately owned and operated by a single family. This structure is criticized as allowing for unchecked monopolistic practices.

Team Turnover and Sustainability #

The financial challenges have reportedly led to high turnover among teams:

  • Of the 19 team owners originally granted charters in 2016, only eight remain in the sport.
  • Even successful teams with multiple championships claim to have not had profitable seasons in years.
  • Concerns about long-term sustainability in the sport are expressed.

The plaintiffs are seeking:

  • Discovery from NASCAR and its CEO
  • Damages for alleged anticompetitive terms under the 2016 charter agreement
  • A preliminary injunction to enable teams to race in the next calendar year while pursuing antitrust litigation

The teams express a desire for a more competitive and fair system where teams, drivers, and sponsors can build long-term enterprise value, similar to other successful professional sports leagues.