How Big Is the NASCAR Stick?

In 1948, stock car racing was a ragtag assemblage of unscrupulous promoters and outlaw drivers with no set of rules or direction. Bill France assembled a group of people and laid the groundwork for what is now NASCAR. One undeniable fact about the original organization of NASCAR was that it was Big Bill France’s sandbox, and if you wanted to play in it, you had to follow his rules.

France demanded that his drivers only compete in his series, and he enforced that by penalizing points from any drivers who chose to race in another series. In the 1960s, there were two different attempts at unionization by drivers. The first led to the suspension of Curtis Turner and Tim Flock, two of the most popular drivers in the sport. The second time a union came together resulted in a boycott of the original Talladega Superspeedway race.

It also resulted in Bill France being punched in the face and ultimately pulling a gun at a meeting to emphasize his leadership over the sport.

That tyrannical leadership of the sport continues to this day, and the result is a lawsuit that is now challenging the tactics that NASCAR uses to lead the sport, and the legality of their right to monopolize almost everything about the sport.

NASCAR has been in negotiations for some time over the next generation of the charter agreement between themselves and the race teams. That agreement determines revenue sharing and certain guarantees that provide each team the ability to negotiate with sponsors about their sponsorship.

At the beginning of September, NASCAR delivered a 105-page agreement to the teams and gave them a deadline some seven hours after the delivery to sign it. 13 of the 15 NASCAR charter teams signed the agreement; 23XI Racing and Front Row Motorsports were the two organizations that did not sign. In theory, that means that they will be stripped of their charters, at the Cup level, starting in 2025.

Many people wondered what was next for these two companies, and that answer came out Wednesday. 23XI and FRM are filing an anti-trust lawsuit against NASCAR for their anti-competitive practices that prevent fair competition in the sport. From their joint statement:

NASCAR and the France Family operate without transparency, have stifled competition and control the sport of stock car racing in ways that unfairly benefit them at the expense of team owners, drivers, sponsors, partners and fans, through the following anti-competitive practices:

• Buying a majority of the premier racetracks that are exclusive to NASCAR races
• Imposing exclusivity deals on NASCAR sanctioned racetracks
• Acquiring Automobile Racing Club of America (ARCA), the only notable stock car racing series competitor
• Preventing teams from participating in any other stock car races, while also retaining ownership over Next Gen parts and cars
• Forcing teams to buy their parts from single-source suppliers chosen by NASCAR

This is more than just a shot across the bow of NASCAR. They have ruffled the feathers of one of the most popular people — not just athletes — in the world. Michael Jordan is a billionaire who is willing to spend his money when he feels like he is being prevented from being competitive and making the most money that he should be able to.

Many people have followed Denny Hamlin‘s Actions Detrimental podcast and have routinely heard Denny’s looks “behind the curtain” during this entire negotiation process. The team owners in NASCAR have been asking for concessions from the sanctioning body for a long time. The amount of revenue that is given to the teams is somewhere around 13% of the total revenue of the sport.

Hamlin, Jordan and Curtis Polk, the owners of 23XI, along with the rest of the owners, feel that the teams deserve a greater piece of that revenue. They are the ones that are ultimately the product and the reason that the fans follow the sport. Throughout the negotiation process, it has seemed as though every request from the team owners was rebuffed and there were nearly zero concessions to them in the final agreement they received. That lack of cooperation from NASCAR and the continued rise in costs for the teams that are not being offset by revenue is what ultimately prompted the lawsuit from 23XI and Front Row.

Initially, the two teams are going to seek an injunction to allow them to continue competing in the sport in 2025 while this lawsuit works its way through the courts and a final resolution is reached. The one outcome of this lawsuit that most everyone, even beyond the team owners, is very interested in seeing is a look into NASCAR’s books. NASCAR is privately held, and their books are not publicly available. Teams have long felt that they are not being forthright with what money they are truly making and they feel that there is a bigger pie with bigger pieces for everyone participating. This could be an incredibly eye-opening experience for fans if they get a chance to understand what money that sport is really making.

One piece of the lawsuit that will be interesting to follow is the assertion that the teams are required to purchase their car parts from single-source suppliers. Ironically, it was the Race Team Alliance, the group that included all of the team owners, that pushed for the reduction of fabrication and the sourcing of car parts to ultimately contain the costs that teams incur from building race cars. Teams are now complaining that they are stuck with a system that they basically asked for.

It is unquestionable that NASCAR is at crossroads. These teams are spending millions of dollars, and in the end, they are receiving little to no value or increase in asset value for all of that money invested. Any other sport in North America has a large portion of their revenue end up in the hands of the owners and their organizations. NFL and NBA franchises have appreciated from tens of millions of dollars to billions of dollars in some 20 years. Baseball has long been worth huge money, although much of that comes from regional broadcasting.

In the history of NASCAR, it is simply common that teams spend millions of dollars and then sell their assets for pennies on the dollar when they liquidate. The charter system was supposed to be an opportunity for that to change. Unfortunately, NASCAR put a time limit on the charters, so they are not worth anything once the year is up.

How this entire situation unfolds is going to be very much like a reality TV show or soap opera. Fans are going to learn a lot about the inner workings of the sport and the teams, if a settlement isn’t reached before then. If it shakes out in the teams’ favor, they will obviously make more money but will probably end up getting back into spending more on fabrication of race cars. If NASCAR wins out, there is a very real possibility that 23XI and Front Row may split off and try and develop an alternative stock car racing series.

Could it compete with NASCAR in popularity and competition? No one knows for sure. Whatever the result is, this is going to be a life-altering period for NASCAR and stock car racing in the United States.

Mike Neff

What is it that Mike Neff doesn’t do? The writer, radio contributor and racetrack announcer coordinates the site’s local short track coverage, hitting up Saturday Night Specials across the country while tracking the sport’s future racing stars. The writer for our signature Cup post-race column, Thinkin’ Out Loud (Mondays) also sits down with Cup crew chiefs to talk shop every Friday with Tech Talk. Mike announces several shows each year for the Good Guys Rod and Custom Association. He also pops up everywhere from PRN Pit Reporters and the Press Box with Alan Smothers to SIRIUS XM Radio. He has announced at tracks all over the Southeast, starting at Millbridge Speedway. He's also announced at East Lincoln Speedway, Concord Speedway, Tri-County Speedway, Caraway Speedway, and Charlotte Motor Speedway.