The trial between 23XI/Front Row Motorsports and NASCAR wrapped up its seventh day following testimony by NASCAR owner Jim France, NASCAR Commissioner Steve Phelps and Richard Childress of Richard Childress Racing, along with the completion of economist Edward Snyder’s cross-examination from Dec. 8.
Judge Kenneth Bell extended each court day an extra hour in hopes of speeding the trial along; original estimates placed arguments around three days total.
Here are the biggest takeaways from day seven.
Read all of Frontstretch’s content covering the NASCAR vs. 23XI/FRM antitrust lawsuit here
Richard Childress supplements RCR with other businesses
One highlight of Childress’ testimony was the revelation that a deal to sell a stake in his team to former NASCAR Cup Series driver Bobby Hillin Jr. fell apart. Childress explained that current partner Chartwell Investments wanted out of its ownership obligation, so he entered negotiations with Hillin.
Childress noted that his racing operation, which consists of two Cup teams and a pair of NASCAR O’Reilly Auto Parts Series entries, operates at a loss. The other RCR businesses supplement the on-track program. RCR provides engines to other teams and runs a military hardware division.
Of note, Childress became annoyed when questioned by NASCAR’s attorneys because he believed the details of his negotiations with Hillin should be covered by an NDA. The team lawyers raised questions about this as well and want to know where NASCAR got its information. NASCAR attorney Chris Yates claimed its strategy was to impeach Childress’s credibility for making claims that were not accurate.
Judge Bell ordered both parties to come up with a solution on this particular matter.
Most Cup teams are losing money, claims a CPA
At the heart of the case between the three parties is the assertion that operating a race team is a losing financial proposition. Certified public accountant Anthony Smith took the stand and testified that he concluded that, after compiling the other NASCAR teams’ financial data, most teams are losing money.
According to Smith’s testimony, one team lost $246.6 million in sponsorship and lost money overall in 2021, 2023 and 2024. Seven teams evaluated had a net loss per car.
Smith also testified that the numbers were never verified. A court order prevented an additional audit. Which raises the question: for an issue that is central to both the NASCAR and teams arguments, why was there not an opportunity to cross-check the information?
Steve Phelps had a lot to say
NASCAR Commissioner Steve Phelps revealed interesting information during his testimony when questioned by team attorney Jeffrey Kessler.
It was revealed that Phelps earns $2.5 million in salary, with an additional $2.5 million bonus available. Additionally, Jim France has not wanted to give teams permanent charters. Third, NASCAR still hopes to build a short track on the property where Auto Club Speedway once stood, despite the rapid growth of Amazon and other logistic company warehouses.
Finally, in a blast from the past, Phelps said that Furniture Row Racing spent more than $45 million to win the Cup championship with Martin Truex Jr. Phelps then testified that FRR’s technical alliance with Joe Gibbs Racing increased from $3 million in 2017 to $10 million in 2018 following the championship.
Phelps also touched on the previously mentioned annoyance by NBC executive Sam Flood that Chase Elliott ran in the Camping World SRX Series using primary sponsor NAPA and his trademark No. 9. Phelps testified that Flood was annoyed because he was worried there would be “marketplace confusion.”
Phelps testified that SRX concerned him from day one because it looked like NASCAR. There was fear among executives that SRX would become the LIV Golf (a competitor to the PGA Tour) of racing. Concern grew to the point of having NASCAR’s legal team look into SRX.
He shared as well that the ask of $720 million from the teams, about $20 million per car, would have bankrupted NASCAR.
And then came perhaps the main event: Jim France
NASCAR owner Jim France may be the most anticipated witness in the entire case, and Kessler dove right in and questioned France about permanent charters. It had been previously established that France was opposed to the idea. His testimony confirmed that stance.
Some other takeaways: France earned $3.5 million as the CEO of NASCAR. His side of the France family has a 54% stake in ownership, but he testified that he does not know NASCAR’s 2025 revenue numbers or if Phelps will earn his $2.5 million bonus. NASCAR’s EBITA (profits before taxes) took a hit in 2020 (to be fair, so did everyone’s) but had growth of 12.5% since 2019.
For all the particular details Jim France recalled in his testimony, he said he did not recall particulars under questioning multiple times. He did, however, remember details of the charter negotiations. When asked what would happen if the deal wasn’t signed by the deadline, France asserted the charters would not have been issued.
“Phelps testified that SRX concerned him from day one because it looked like NASCAR.”
I find this laughable. If anything, it’s an indictment against NASCAR’s spec cars, not “stock cars” as its acronym would imply.
So does that mean NA$CAR knows what a real “race” car looks like?
Why are there three articles all saying the same thing?