The line in NASCAR’s Daytona Beach sand has been drawn.
While Denny Hamlin isn’t standing on the Alamo, like William Travis did in 1836, the imagery and juxtaposition toward war is relevant.
As the news of his 23XI Racing antitrust lawsuit against NASCAR hit Wednesday (Oct. 2), Hamlin made clear they had no other option after failed charter negotiations with the France family-owned series.
While every other current charter team owner signed on the dotted line, Hamlin, in partnership with 23XI co-owner Michael Jordan, and FRM owner Bob Jenkins (a co-litigant in the case) decided to take a stand and turn their negotiation toward the courtroom.
Make no mistake, these two teams aren’t fooling around. They’ve employed attorney Jeffrey Kessler, a man who has made a career of winning legal battles against large sports organizations. He’s taken on the NFL multiple times and won; the NCAA and won; the U.S. Soccer Federation, on behalf of the women’s team, and won.
Kessler knows what he is doing.
His presence means 23XI and FRM are staking their future in the series by taking on the France family, NASCAR leadership who is not known to be congenial toward those who disagree with it. Without signatures on a new contract with the sport, this pair of teams run the risk of losing their charters for next year and, therefore, their guaranteed spot on the grid. That’s a massive risk when each currently receives a cut of the television money from the series to offset their budgets.
But if that is what they are willing to risk, then their belief in this fight has to be strong. The mountain these two ownership groups are climbing is a tough one, but not unprecedented in the professional sports landscape.
The history of lawsuits against major sports leagues has made the rounds before. During the 2011 NFL lockout, when team owners prevented players from going to work after failing to negotiate a new collective bargaining agreement, the players union dissolved. They then sued the league for violation of antitrust laws.
Not to let their big brother overshadow them, the NBA players did likewise later that year, dissolving their union and sued the league. This was after a last-ditch effort to sign a new CBA failed and games were lost.
While both lawsuits, which Kessler was involved in, had various differences unique to their leagues, there was one common thread: the battle of shared revenue between players and the league.
That money, of course, is at the heart of the matter with NASCAR’s lawsuit.
There is a lot of legal technical jargon that is involved in understanding where Hamlin and company against NASCAR stand, but the fight is simple: shared revenue from the series’ media deals. That’s the big cash cow, and the two teams don’t feel that NASCAR is fairly sharing that revenue or aren’t providing enough details, i.e. opening its books, on why more isn’t going to the Cup owners.
To further their argument, the litigants are claiming that NASCAR is acting in a monopoly, with multiple points backing their statement, including ownership of the majority of tracks the series competes on, exclusivity deals at their own racetracks and the single-source parts industry for the current Next Gen car.
While all the other Cup owners signed, it’s not a coincidence Hamlin was one of the few that didn’t. His ownership group, consisting of Jordan and Curtis Polk, have a vast history in either playing for or owning franchises in big league, stick-and-ball sports. Jordan had just retired a second time from the Chicago Bulls when the 1998-99 NBA lockout occurred. Then, he was an owner of the Charlotte Bobcats (now the Hornets) in the 2011 labor strife. Their experience is based on a collective bargaining environment between the league and its players.
This challenges the long-held NASCAR perspective that owners are more contractors versus partners in their series, with a top-down management model which is claimed to be a monopoly. This philosophy is backed by the teams’ legal statement: “No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices.”
Now, the two teams and their lawyers are going to have to prove to the courts that NASCAR is monopolizing the sport to their disadvantage. And that might take time.
The most recent NFL lockout in 2011 was in the courts from March until settlement was reached on July 25, a timespan of approximately four months. For the NBA, the season was already delayed when the union dissolved and sued on Nov. 15, but it was settled early in December.
In each case, a deal was reached that brought the affected parties back to the negotiating table, which could be the end state here. However, the NFL suit was able to linger during the offseason, as the motivation to get a deal done was less until games were threatened. The NBA was different as the union negotiated through the entire offseason and had no recourse but to sue after the players were unable to return to work.
The length of this battle might be determined once the courts decide whether 23XI and FRM should be granted an injunction to compete in 2025 under the current 2024 charter agreement. If the two teams don’t receive that, they will be in a tough spot when Daytona International Speedway rolls around.
Injunctions have been granted in litigation by racing entities before. In 1979, after CART was formed by Pat Patrick, Roger Penske and Dan Gurney, the Indianapolis 500 sanctioning body, United States Auto Club, disallowed the entries of those car owners. The trio was seen as a rival to the competing interests of USAC’s full-season NTT IndyCar Series. A lawsuit was filed, and an injunction granted to allow those teams to compete in the race. The end result worked in Penske’s favor, as he won it. So it’s not unheard of for a team to be granted such a thing.
However, if there is an injunction, NASCAR will be shrouded with the looming threat of being audited and its closely held financial information shared with the two race teams.
And that could be Pandora’s Box.
Now the stock car racing world will head to Talladega Superspeedway, coincidentally the place of the last great labor upheaval within the sport. In 1969, drivers tried to draw their own line in the sand and boycott the inaugural Talladega race. But NASCAR didn’t blink, and the race went on with cars from the junior-level series.
That was then. Today, some 55 years later, millions of dollars are at stake, dozens of jobs are on the line and emotions could run high.
What may start out as a line in the Daytona Beach sand might end up becoming a deep trench.
Tom is an IndyCar writer at Frontstretch, joining in March 2023. Besides writing the IndyCar Previews and frequent editions of Inside IndyCar, he will hop on as a fill-in guest on the Open Wheel podcast The Pit Straight. A native Hoosier, he calls Fort Wayne home. Follow Tom on Twitter @TomBlackburn42.