{"id":323453,"date":"2025-12-03T21:20:10","date_gmt":"2025-12-03T21:20:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/323453\/"},"modified":"2025-12-03T21:20:10","modified_gmt":"2025-12-03T21:20:10","slug":"executives-role-in-charters-questioned-on-day-3-of-michael-jordan-vs-nascar-trial","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/323453\/","title":{"rendered":"Executive\u2019s role in charters questioned on Day 3 of Michael Jordan vs. NASCAR trial"},"content":{"rendered":"

CHARLOTTE, N.C. \u2014 NASCAR strategy chief Scott Prime continued to try to fend off accusations of his company\u2019s alleged illegal monopoly power abuses as testimony continued Wednesday in the antitrust lawsuit against NASCAR<\/a>.<\/p>\n

Prime, a NASCAR executive vice president, was on the stand for a second day as Jeffrey Kessler \u2014 the attorney representing 23XI Racing team owners Michael Jordan and Denny Hamlin and Front Row Motorsports owner Bob Jenkins \u2014 used Prime\u2019s emails and corporate communications to paint a picture of what he said were NASCAR\u2019s monopolistic abuses.<\/p>\n

Prime originally worked for consulting firm McKinsey, during which he prepared a 2014 report expressing \u201cconcerns over the longevity of the sport\u201d if NASCAR did not take steps to improve the health of its race teams.<\/p>\n

One such step in his report included taxi-like \u201cmedallions,\u201d which ultimately came to fruition in NASCAR\u2019s \u201ccharter system\u201d \u2014 franchise-like licenses with expiration dates that guarantee certain financial and other benefits. That system was most recently renegotiated in 2024, and the resulting deal \u2014 which 13 of NASCAR\u2019s 15 charter-holding race teams signed<\/a>, but 23XI and Front Row did not \u2014 is at the heart of the sides\u2019 legal battle<\/a>.<\/p>\n

Kessler noted how despite the charter system\u2019s existence, teams are hamstrung by a weak negotiating position and stuck in unfavorable terms when it comes to renewing charters because they have nowhere else to go.<\/p>\n

Kessler cited a 2019 letter from one team that asked for a better business model with more sustainable revenues to aid in teams\u2019 viability, which Prime acknowledged resulted in no changes to new charter agreements in 2020.<\/p>\n

\u201cWe presented the offer and they accepted it,\u201d Prime said.<\/p>\n

\u201cYou\u2019re a monopoly!\u201d Kessler said. \u201cThere\u2019s no place else to compete. There was no place else for them to go, correct?\u201d<\/p>\n

\u201cNASCAR is the premier stock car racing series today, yes,\u201d Prime said.<\/p>\n

During the 2024 charter negotiations, one email from Prime to other executives relayed four demands from the race teams he found \u201cquite disappointing\u201d because the teams said they would be \u201cforced to recommit our energy to exploring all our options\u201d if NASCAR did not agree.<\/p>\n

That heightened concerns of a breakaway stock car series formed by the race teams, to which Prime laid out various options of how NASCAR could respond \u2014 including reducing the number of charters and offering them on a \u201cfirst come, first served\u201d basis to create a panic among the teams, updating the charter language to NASCAR\u2019s liking and then offering a take-it-or-leave-it deadline to sign, dissolving the charter system altogether, or taking all of the cars in house and eliminating the need for race teams.<\/p>\n

\u201cYou accurately reflected our options,\u201d then-NASCAR president Steve Phelps responded to Prime in an email. \u201cThey are playing with fire. Lots of options, but all have the same theme: Pick a date and they can sign or lose their charters. It is that simple.\u201d<\/p>\n

\u201cOnly a monopolist could say this,\u201d Kessler claimed. \u201cOnly a monopolist has the power to say, \u2018Take my offer and if you don\u2019t take it, you will no longer be in this business, and someone else will take your place.’\u201d<\/p>\n

\"Michael<\/p>\n

\n Michael Jordan, NBA legend and one of 23XI Racing\u2019s co-owners, arriving at the courthouse on Monday. (Grant Baldwin \/ Getty Images)<\/p>\n

Ultimately, NASCAR did present a take-it-or-leave-it offer to teams on Sept. 6, 2024 \u2014 an option Prime had described as \u201ca gun to your head,\u201d though he did not favor that.<\/p>\n

\u201cThat\u2019s what Jim wanted,\u201d Kessler said, speaking of NASCAR chairman and CEO Jim France, also a defendant in the lawsuit.<\/p>\n

\u201cI don\u2019t know what he wanted,\u201d Prime replied.<\/p>\n

Prime was portrayed as a moderate who was trying hard to strike a fair deal with teams. It was NASCAR\u2019s board of directors, headed by France, who appeared to be pushing back.<\/p>\n

\u201cNo bueno with Jim on charters,\u201d Prime wrote via text after one meeting. \u201cCan say (then-COO Steve O\u2019Donnell) and I put our best foot forward, but it was a brick wall.\u201d<\/p>\n

\u201cI\u2019m sorry to hear this,\u201d Phelps responded. \u201cSuper disappointing.\u201d<\/p>\n

Inside the courtroom, Hamlin leaned forward and looked across the aisle to gauge any reaction from the France family and their representatives, who sat expressionless.<\/p>\n

Kessler also brought up NASCAR\u2019s \u201cgoodwill provision\u201d in its charter agreements, which says any owner of a race team \u2014 even a minority owner of only 10 percent \u2014 may not own a team nor invest in a competing stock car series.<\/p>\n

Kessler called it a \u201cnon-compete\u201d agreement and not a \u201cgoodwill\u201d provision, which Prime disagreed with.<\/p>\n

\u201cIt\u2019s not goodwill, it\u2019s anti-competitive will,\u201d Kessler said. \u201cShouldn\u2019t that be the name?\u201d<\/p>\n

NASCAR\u2019s attorneys objected to that statement, and the judge sustained it.<\/p>\n

But Kessler kept going, citing the goodwill provision\u2019s clause that states even if a charter team leaves NASCAR or simply forfeits the charter, it still cannot join a competitor series for more than a year.<\/p>\n

\u201cAnd you think that\u2019s goodwill?\u201d Kessler said.<\/p>\n

\u201cI do,\u201d Prime responded.<\/p>\n

Kessler also cited Prime\u2019s strategy document calling for intellectual property protections for NASCAR\u2019s \u201cNext Gen\u201d model car after pondering a change from its former \u201cGen 6\u201d car. Prime wrote that without IP protection, it \u201cincreases risk to NASCAR of the creation of a copycat series.\u201d<\/p>\n

As it turned out, NASCAR installed rulebook language that says teams cannot use their Next Gen car in any series but NASCAR. Prime said that was a standard IP practice, since NASCAR is the one that came up with the car and designed it.<\/p>\n

\u201cIt was never an issue with the teams,\u201d Prime said. \u201cThey understood the Next Gen car design and all the protections that went with it, yes.\u201d<\/p>\n

Later, under cross-examination, Prime said the teams\u2019 demand of $20 million per car in revenue payouts would \u201cput NASCAR bankrupt\u201d and denied the earlier communications were a sign of ill intent on NASCAR\u2019s part.<\/p>\n

Prime said what he meant, during his earlier testimony Tuesday<\/a>, by trying to \u201clock up\u201d the tracks was simply signing them for the next season\u2019s schedule, not excluding them from a competitor series, and said the idea of permanent charters did not make sense for anyone. Owning one of the 36 available charters allows a team entry into every Cup Series points race and a guaranteed floor of revenue.<\/p>\n

\u201cYou can\u2019t negotiate a deal and have the exact same deal forever,\u201d Prime said. \u201cYou can\u2019t write a contract today that\u2019s going to last forever.\u201d<\/p>\n

Prime\u2019s testimony was set to continue Wednesday afternoon, followed by Jenkins\u2019.<\/p>\n","protected":false},"excerpt":{"rendered":"CHARLOTTE, N.C. \u2014 NASCAR strategy chief Scott Prime continued to try to fend off accusations of his company\u2019s…\n","protected":false},"author":2,"featured_media":323454,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[446],"tags":[49,48,12716,634,82,575],"class_list":["post-323453","post","type-post","status-publish","format-standard","has-post-thumbnail","category-nascar","tag-ca","tag-canada","tag-motorsports","tag-nascar","tag-sports","tag-sports-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/323453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=323453"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/323453\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/323454"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=323453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=323453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=323453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}