Perhaps with less fanfare than expected, the antitrust lawsuit brought against NASCAR by the owners of 23XI Racing and Front Row Motorsports came to a close on Thursday (Dec. 11) with the news that the parties had reached a settlement.
Perhaps that’s not as sexy as a jury verdict, and maybe some things we’d have liked to have heard were left on the table, but really, a settlement was the best possible outcome.
The needle leans toward the race teams when it comes to who got the better end of the stick. At the heart of the matter was NASCAR’s charter system, which gives teams who have one of the 36 charters a guaranteed starting spot in every race (and in turn has required those teams to enter). It’s similar to franchise deals in other sports, but still allows for open entries for the four remaining starting spots in races at a lower percentage of the purse.
NASCAR balked at making the charters permanent for teams from the beginning, hoping to be able to renegotiate terms periodically and use them for a bit of leverage. For the teams, a lack of permanence made long-term planning difficult, particularly in sponsor negotiations. They also felt that the monetary piece of the pie allocated to teams needed to be more equitable. Even the largest teams disclosed that racing isn’t profitable.
For team owners, operating at a loss, even if they have other sources of revenue in other business that make up for it, isn’t a sustainable model. And at the end of the day, NASCAR needs them just as much (if not more) as they need NASCAR.
The settlement will affect all of the race teams, even those who did sign the current agreement last year. They had been given a final document of over a hundred pages and just a few hours to sign or risk losing their charters. Most signed, even knowing the deal was more favorable to NASCAR than to them, because they were afraid of losing decades of work. They will receive new agreements, amended with the changes outlined in the settlement, including permanence (though charters can be revoked or teams forced to sell them under certain circumstances, most notably by not meeting minimum performance standards), international revenue and limited but important power in negotiating with NASCAR about things like the schedule.
There was also an undisclosed monetary settlement with the plaintiffs.
NASCAR gets a larger percentage of charter sales if teams choose to sell them. They also do get some bargaining power in renegotiating charter rules down the road, but teams will have to approve changes by at least a 2/3 vote, and teams who do not vote in favor will still keep their charters.
23XI co-owner Michael Jordan, while heavily invested in his team, told the jury during the trial that being a newer voice in the garage gave him an advantage.
“Someone had to step forward and challenge the entity,” Jordan testified on Dec. 5. “I sat in those meetings with longtime owners who were brow-beaten for so many years trying to make change. I was a new person, I wasn’t afraid. I felt I could challenge NASCAR as a whole.”
Dropping the Hammer: NASCAR and Its Top Men Fold
As was made very clear by the testimony and documented presented to the court, NASCAR needed to be challenged. While the Next Gen car was touted as a money-saving measure for the teams, the teams’ evidence showed otherwise. The teams also alleged that NASCAR competes with them for sponsors.
Perhaps worst of all, internal discussions and email chains from within the sanctioning body revealed a disturbing lack of regard for the teams or the fans. Perhaps the most egregious was an email that referred to popular longtime team owner Richard Childress, who has six Cup Series titles and two teams currently competing, as “a stupid redneck.”
Joe Gibbs racing executive Heather Gibbs outlined how her father-in-law and the team’s namesake begged NASCAR not to force the most recent charter agreement on teams, but signed because losing their charters meant closing their doors.
The case brought to light a climate that was toxic and unhealthy for everyone — including the fans, who go to races and watch on television to cheer for their favorite drivers. Fans support sponsors by using their products, or by advertising them via the hats and t-shirts they buy.
For race fans, the settlement is a long-term win. Had the case gone to the jury and NASCAR had lost, it could have been forced to sell off assets, which could have included some or all of its racetracks.
For fans, the sport they love, maybe for generations, remains generally intact. In the end, that’s a good thing. NASCAR’s collapse would have had a ripple effect, likely meaning then end of the road for teams and drivers. Yes, they could have raced in other series, but those series, at least right now, aren’t there. Could the teams have started their own league? Maybe, but that’s a dangerous gamble for so many reasons.
Sure, NASCAR has done a lot of things that fans haven’t liked, from playoffs to stage racing and other rule changes. The Next Gen car has improved intermediate track racing at the cost of short tracks and road courses.
How, or if, the settlement will drive real change in the sport remains to be seen. But fans have seen a lot. The lawsuit forced the airing of a lot of the sanctioning body’s dirty laundry, and it was really dirty — like chewing tobacco stains and skid marks dirty. Fans know the damage cause to the teams and they know how NASCAR regards its most loyal supporters.
They aren’t going to forgive and forget.
With NASCOURT Ending on a Settlement, What’s Next for NASCAR Execs?
Dale Earnhardt Jr. suggested that NASCAR could save a lot of face with fans by making some of the changes fans have asked for, like returning to a full-season championship format.
“NASCAR has taken a beating publicly,” Earnhardt said during his podcast, the Dale Jr Download, earlier this week. “It would be a good opportunity for them to bring back the full-season, 36-race schedule as an olive branch to the race fans that they pissed off.”
Fans do hold some power here. Race fans hold grudges, and the evidence released in recent weeks isn’t going to just go away. Fans know things. NASCAR knows they know. Perhaps an olive branch, or several, would go a long way in making fans willing to let bygones be bygones.
Teams need to stand up for change as well. Together, they can have real leverage, even if future charter agreements prohibit lawsuits. This case shows that many fans are on their side. The threat of another public mud-slinging could potentially carry a lot of weight going forward.
Was the trial, in some ways, a high-stakes contest to drag out some of the industry’s worst secrets? Absolutely.
But sometimes a wound needs to be opened, debrided and exposed in order to heal. A lot of band-aids have been ripped off over the last 11 days. The wounds will heal, but now there is an opportunity for minimal scarring.
That will require care and careful planning. A return to the way things were before the trial and all the bad blood won’t accomplish anything, and in some ways is probably impossible.
But the sport can move forward. While two relatively small teams “taking down the man” might have felt good to some people for a little while, the reality is that it would have caused irrevocable harm to not only NASCAR, but to the race teams, and by extension, the fans. Wishing for NASCAR’s demise won’t make racing suddenly healthy. The only way to do that is to rebuild faith in leadership and to work toward a brighter future.
The settlement allows for healing. It allows for trust to be earned back from fans. NASCAR will have to work to do that. It will probably mean changes in leadership as the sport’s top executives’ worst traits were exposed, and NASCAR should distance itself from that.
But it can be done. NASCAR needs to learn to thrive without its previous avarice. Race teams can be a part of the sport’s success if the sport helps them succeed. The trial showed that it cannot be a one-way street. Teams and fans have to want NASCAR to thrive, but in return, NASCAR has to help them do the same.
Hopefully, that’s a lesson learned now. The settlement was the best outcome fans could hope for, but that doesn’t mean it should be the end of it. Everyone learned too much to go back to the way it was — but they have the opportunity to make a better way now.
Amy is an 20-year veteran NASCAR writer and a six-time National Motorsports Press Association (NMPA) writing award winner, including first place awards for both columns and race coverage. As well as serving as Photo Editor, Amy writes The Big 6 (Mondays) after every NASCAR Cup Series race. She can also be found working on her bi-weekly columns Holding A Pretty Wheel (Tuesdays) and Only Yesterday (Wednesdays). A New Hampshire native whose heart is in North Carolina, Amy’s work credits have extended everywhere from driver Kenny Wallace’s website to Athlon Sports. She can also be heard weekly as a panelist on the Hard Left Turn podcast that can be found on AccessWDUN.com’s Around the Track page.