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<\/p>\nIt\u2019s becoming clear through four days of the 23XI Racing and Front Row Motorsports v NASCAR antitrust trial that the now defunct SRX series will play a role in determining in the outcome of the case in the eyes of the jury.<\/p>\n
In questioning NASCAR executives (president) Steve O\u2019Donnell and (EVP-strategy) Scott Prime over the past two days, 23XI and FRM attorney Jeffrey Kessler has started to paint a picture that the Sanctioning Body\u2019s leadership became increasingly aware of a potential competitor series and reacted to it in tangible way.<\/p>\n
This is important because this case, as decided by a jury, will answer in part if NASCAR is using its position as a monopoly in the premier Stock Car racing space to harm competition or those operating in the space, like the teams.<\/p>\n
So the fact that Superstar Racing Series keeps coming up in the line of questioning is more signal than noise.<\/p>\n
Read Also:<\/p>\n
NASCAR started to show concern about SRX during the summer of 2022, during the second season of the midweek short track series, as it negotiated with teams over the terms of the charter agreement extension.<\/p>\n
What would happen if teams ultimately rejected in large numbers a final NASCAR proposal? They asked themselves that as early in June 2022 because it was possible, as referenced by Prime, that teams and drivers could race in SRX.<\/p>\n
This was especially a concern as NASCAR began to feel as though SRX started to infringe on its identity. For example, SRX started out in 2021 as a series that ran on three dirt tracks and three paved short tracks using a roster of retired legends and a local hero from each venue.<\/p>\n
By the second year, races started to more frequently feature Cup Series drivers and the final year in 2023 saw Brad Keselowski run the entire season with cameo appearances from the likes of Kyle Busch and Chase Briscoe. Chase Elliott appeared in races.<\/p>\n
“I recall we all became concerned with the look and the feel of the series, yes,” O’Donnell said while under questioning from Kessler.<\/p>\n
However, O\u2019Donnell pointed out that 2016-2024 charter agreement didn\u2019t prevent drivers from participating in the series. But of concern to O\u2019Donnell and his peers is that team owners like Hamlin and Justin Marks also made starts.<\/p>\n
The series was also co-founded by a charter holding team owner, at the time, in three-time Cup Series champion Tony Stewart, which led to O\u2019Donnell having a conversation with then Stewart-Haas Racing president Brett Frood that assuaged his concerns, but only temporarily.<\/p>\n
\u201cI learned from Brett Frood that the original plan was to not look like NASCAR, feature NASCAR drivers,\u201d O\u2019Donnell said, \u201cbut these are all things that ended up happening.\u201d<\/p>\n
How did NASCAR respond to that threat? Consider this June 29, 2022 discovered conversation between Prime, Phelps, Ben Kennedy and O\u2019Donnell.<\/p>\n
—<\/p>\n
O\u2019Donnell: Justin marks is racing srx?
Ben Kennedy: Saw that too. Disappointing.
Prime: They just don\u2019t get it. I\u2019m sure its cool for Justin to go get behind the wheel but there\u2019s no regard for the bigger picture. And maybe that\u2019s on us for not giving them that incentive, I don\u2019t know. But you\u2019ve got Marks, Chase (Elliott), Tony (Stewart) and (Ryan) Blaney racing on a network that competes against our rights holders. They outrated (on television) Xfinity and Trucks last weekend; it isn\u2019t some local dirt track stuff.
O\u2019Donnell: Actually you have one of the voices of FOX in Waltrip, an owner of Cup cars in Stewart, our most popular driver for years and one of our champs fathers etc. This is exhibit \u2018a\u2019 that nobody gives a shit about what got them their careers. Pay em some money and they are all in. The guy who cried about safety every single day is in a box car without SAFER Barriers and not a care in the world. And by the way, who does Curtis (Polk, 23XI co-owner) have hanging with (Michael Jordan) over the weekend in Nashville? Not Ben, not me or (Scott) Prime or anyone \u2013 Marty Smith from ESPN. Coincidence? Lots to get our arms around but sadly any \u2018goodwill\u2019 seems to be lost. So smiles all around but behind the scenes we scheme and we win.\u201d Wait until (Dale) Jr. says he is running an event. Matter of time. They will go to North Wilkesboro with Jr. if we are not careful. We need to be the first back.
Prime: Agreed \u2013 North Wilkesboro and Bowman Gray next year with Jr and friends if we don\u2019t make moves
O\u2019Donnell: How about this for All Star – make it a combo \u2013 Bowman and Wilkes Fri\/Sun
Prime: Sick! And flip it for 2024. We\u2019ve got moves to make. Just need to sell them through. Should be a good working session Thursday
Phelps: That\u2019s the key \u2013 we need to have everyone understand that this could turn into LIV if we don\u2019t play our cards right.\u00a0 We are smarter than they are – but part of the issue is they don\u2019t have the facts and don\u2019t seem to want to take the time to learn or maybe they just don\u2019t care. It\u2019s all about the money and feeling like they have been heard and are respected. The SRX thing is just baffling to me. Why don\u2019t they get it? Oh, they do get it, and it\u2019s a huge FU to us.<\/p>\n
—<\/p>\n
This was an example of their concern, and NASCAR ended up adding both Wilkesboro (2023) and Bowman Gray (2025) to the Cup Series schedule in the years that followed.<\/p>\n
Speedway Motorsports, which owns numerous tracks and dates on the Cup Series schedule, wanted to add an SRX date in 2024 for debt servicing purposes but was blocked by NASCAR, which has tracks sign an exclusion provision. NASCAR did not allow SM to schedule that race.<\/p>\n
<\/p>\n
O\u2019Donnell was asked why in his testimony by Kessler.<\/p>\n
O\u2019Donnell said NASCAR was in the middle negotiating a new broadcast rights agreement \u2018and SRX started to look like NASCAR, so we said no.\u2019 He added that \u2018we (NASCAR) wanted to gain as much TV revenue for the teams and tracks as possible.\u2019<\/p>\n
Meaning: NASCAR felt like the existence of SRX, and an increasingly viable SRX on a major television platform, was a potential hurdle to NASCAR\u2019s negotiations, to say nothing of what O\u2019Donnell thought created confusion in the marketplace.<\/p>\n
He said he felt like, given the state of TV negotiations, that everyone in the sport should have been, and wanted to be, all-in on NASCAR.<\/p>\n
Then there\u2019s this February 1, 2023 text exchange between Phelps and O\u2019Donnell.<\/p>\n
Phelps: Oh great, another owner racing in SRX
O\u2019Donnell: This is NASCAR. Pure and simple. Enough. We need legal to take a shot at this.
Phelps: These guys are just plain stupid. Need to put a knife in this trash series.<\/p>\n
Why did O\u2019Donnell want legal to look at it, asked Kessler?<\/p>\n
“I thought it looked more and more like NASCAR.”<\/p>\n
Is it because he wanted SRX stopped?<\/p>\n
“I just wanted legal to take a look at it.”<\/p>\n
As for Wilkesboro and Bowman Gray being added to the Cup schedule, Kessler suggested this as anti-competitive behavior and O\u2019Donnell said the promotional family at BGS, and the Frances, goes back generations.<\/p>\n
This is true.<\/p>\n
O\u2019Donnell said that family wanted to sell their lease, and with NASCAR\u2019s roots going back to the 50s there, and still sanctioning the weekly track program, the league was all the more welcome to pick up the lease. He said Speedway came to NASCAR wanting a Cup race at Wilkesboro, as they own it, and that request was merely granted.<\/p>\n
Kessler hammered the point home one more time, before moving on, that these moves all came after these text exchanges specifically bringing up taking Cup to these tracks in response to the threat of the SRX series.<\/p>\n
SRX\u2019s 2024 season never materialized as it announced its closure in January 2024 for reasons that still haven\u2019t been made clear.<\/p>\n
O\u2019Donnell conceded in his testimony that \u2018he thinks about it every day\u2019 about the possibility of a breakaway series and it\u2019s in his job description to assess the landscape for adverse headwinds to the NASCAR business.<\/p>\n
He and his fellow senior leadership peers expressed concern in an email chain after a meeting with the teams over charter negotiations in March 2022 that the teams could form or join a competitor series.<\/p>\n
So, track agreements, with O\u2019Donnell\u2019s oversight, received more extensive non-compete clauses that extended two years plus another two years. O\u2019Donnell says the second two-years only kicked in with agreement to terms after the first two years, despite what the discovered emails said, and that the extended agreements was merely about scheduling purposes.<\/p>\n
But what does the non-compete apply to, given that it was implemented against SRX racing at a SMI facility?<\/p>\n
\u201cIf it looked like it infringed upon our IP,\u201d O\u2019Donnell said.<\/p>\n
Regardless, O\u2019Donnell and Prime were so concerned that the teams could form their own series or partner with SRX and Speedway Motorsports and run two races at every SMI facility plus one at Eldora Speedway, owned by Stewart, and the Indianapolis Motor Speedway owned by fellow Cup Series team owner Roger Penske.<\/p>\n
O\u2019Donnell said he wanted track agreements finalized with Speedway Motorsports by that Saturday before the teams could explore that option.<\/p>\n
Prime and O\u2019Donnell also felt like the team owners could sell their charters to F1 owning Liberty Media and\/or run this mid-week style series.<\/p>\n
No matter what, LIV Golf and how it challenged the hegemony of the PGA Tour, created a degree of nervousness within NASCAR circles.<\/p>\n
Read Also:<\/p>\n
O’Donnell is pro team
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Nascar President, Steve O’Donnell<\/p>\n
Photo by: Jared C. Tilton \/ Getty Images<\/p>\n
O\u2019Donnell took notes during a meeting with team owners in 2022, the first time in which the two sides discussed the charter negotiations ahead of them, where the executive was told that the current model was \u2018broken\u2019 for the competitors.<\/p>\n
He noted, literally, that teams could be one lost sponsors away from going out of business.<\/p>\n
His notes read \u2018the business model is broken for the teams,\u2019 after being shown a compositive financial report that showed cars costing $20 million per entry per season, and O\u2019Donnell taking that at face value. \u00a0\u00a0<\/p>\n
\u201cWe knew the industry was challenged,\u201d O\u2019Donnell said when asked about his takeaways.<\/p>\n
At the time, the charter agreement paid 65 percent of broadcast rights revenue to tracks, 25 percent to teams and 10 percent to the Sanctioning Body itself.<\/p>\n
In that meeting, 23XI investor and eventual Teams Negotiating Committee chairman Curtis Polk told the NASCAR leadership team that the teams had three primary goals \u2013 maximize broadcast rights revenue, increase competition and introduce a spending salary cap.<\/p>\n
During that meeting, Jeff Gordon of Hendrick Motorsports asked Ben Kennedy, the great grandson of NASCAR founder Bill France and nephew to Jim, if \u2018the family was open to a new financial model\u2019 to help the teams.<\/p>\n
At the time, Kennedy said yes.<\/p>\n
Kessler asked O\u2019Donnell on Thursday if that was actually true.<\/p>\n
\u201cNo.\u201d<\/p>\n
By February 14, 2023, O\u2019Donnell said in an hand-written note that he hoped the future leadership would skew younger.<\/p>\n
“I was hoping the future board would include the next generation and was hoping to see that change,” O’Donnell typed.<\/p>\n
Jim France is 81.<\/p>\n
O\u2019Donnell said that the \u2018legacy mindset\u2019 in the NASCAR Board \u2018inhibited growth.\u2019<\/p>\n
But through it all, O\u2019Donnell did try his best, even in conversation with the elder France to make headway for the teams, but 21 of the 22 Amanda Chart issues remained either neutral or NASCAR wins.<\/p>\n
\u00a0<\/p>\n
\u201cMr. France was the brick wall in the negotiations,\u201d Kessler suggested to O\u2019Donnell referring to a text message line from Prime.<\/p>\n
And the response?<\/p>\n
\u201cThose are your words, not mine.\u201d<\/p>\n
O\u2019Donnell has been at NASCAR since 1996. And while he is very passionate, sometimes to the point of acrimony, Kessler did not get an emotional response out of the longtime executive who instead stuck to his broader points about trying to help the teams and NASCAR leadership all find a degree of commonality.<\/p>\n
\u201cMy job every day is to grow the sport.\u201d<\/p>\n
He frequently spoke to the \u2018stakeholders\u2019 and said that\u00a0 growth applies to his bosses, but also the teams and the fans. And if that means making his bosses mad at him?<\/p>\n
\u201cThe Frances have always told me that they don\u2019t hire \u2018Yes People\u2019 and that sometimes his job is to speak up to the broader issues within the garage.<\/p>\n
And while much of this case has been about the teams\u2019 financial struggles, the basis for their arguments for more money in the charter negotiations, O\u2019Donnell illustrated on Thursday that NASCAR frequently invests into the sport at great loss too.<\/p>\n
For example, the three years spent racing in Downtown Chicago cost NASCAR $55 million, according to O\u2019Donnell.<\/p>\n
Why did NASCAR do it?<\/p>\n
\u201cIt was a strategic investment because if not for that, Amazon would not have become a broadcast partner,\u201d said O\u2019Donnell.<\/p>\n
NASCAR said it lost $6 million racing in Mexico City this year but did so because it was important to Amazon, who kicked in an addition $1 million in race purse.<\/p>\n
For what it\u2019s worth, Kessler could only do math to find $500,000 of that loss and O\u2019Donnell couldn\u2019t explain the rest of the $5+ million beyond \u2018logistics.\u2019 \u00a0<\/p>\n
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\nJenkins cross-examined<\/p>\n
The morning on Thursday opened with the rest of Front Row Motorsports owner Bob Jenkins cross-examination and re-examination.<\/p>\n
NASCAR spent Wednesday evening and Thursday morning attempting to paint a picture, over the past two days that Jenkins has used his other businesses to misrepresent FRM’s financials.<\/p>\n
Jenkins has testified that it costs $20 million per car to race in the Cup Series, but NASCAR attorney Lawrence Buterman produced discovery documents that showed the most Front Row has ever spent on a Cup car is $14 million.<\/p>\n
Jenkins said the $20 million is the aggregate of multiple teams as used in a teams\u2019 document.<\/p>\n
\u201cThe median cost is $20 million; the fact I can do it for less helps me reduce my costs,\u201d Jenkins told Buterman.<\/p>\n
Buterman pointed to documents that showed part of what Front Row is asking for in damages matches a $1.2 million loss from his Truck Series team, which is unrelated to the lawsuit and the Cup Series charter system.<\/p>\n
Jenkins conceded that Truck Series losses shouldn\u2019t have been included.<\/p>\n
Another point of the lawsuit is 23XI and Front Row suggesting that NASCAR\u2019s characterized \u2018take it or leave it\u2019 final charter offer to the teams on September 6, 2004 was the behavior of a monopsonist acting anti-competitively.<\/p>\n
That day, NASCAR sent the charter document to teams and told them they had by the end of the business day to sign it or lose their charters.<\/p>\n
Buterman admitted evidence that Jenkins deployed the same approach in 2021 with 23XI Racing co-owner and co-plaintiff Denny Hamlin over a proposed merger between their two teams.<\/p>\n
In the text, Jenkins told Hamlin \u2018we can\u2019t keep negotiating this forever,\u201d Jenkins wrote in a text and that\u2019s \u201c\u2026why we decided we had to have a deal by 5 p.m.\u201d<\/p>\n
Similar to Buterman trying to draw parallels to Hamlin and Jenkins having exclusivity clauses built into their contracts with drivers, despite drivers having options of where to drive, as similar to the track exclusivity clauses and charter goodwill provisions, Jenkins fended this off with a legal response too.<\/p>\n
\u201cThis is another one of your analogies that doesn\u2019t work,\u201d Jenkins said, since Hamlin could also buy a charter from Starcom or Rick Ware Racing, which were on the market at the time.<\/p>\n
Jenkins had a text message with President Jerry Freeze that said ‘tell Rick Ware he can charge whatever to Hamlin’ for a charter. Jenkins said that wasn\u2019t him imposing a term on RWR and that he didn\u2019t share privy financial information about the proposed 23XI, FRM merger.<\/p>\n
That merger never happened, Jenkins said, because Toyota could only field one engine program and not two and the deal was for Jenkins’ two charters.<\/p>\n
“I couldn’t run one Ford and one Toyota,” and the deadline he gave Hamlin was because Ford and Roush needed to know if Jenkins was leaving for TRD and Hamlin or not.<\/p>\n
Speed it up
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Charles R. Jonas<\/p>\n
The day ended with Judge Kenneth D. Bell criticizing the pace of the trial to this point with just three witnesses in as many days.<\/p>\n
“I get the impression that this is not moving along the way we all would like it to.”<\/p>\n
Judge Bell said he was hesitant to introduce a chess clock to force both sides on a timer but says he wants future witnesses to answer \u2018the most harmless of questions\u2019 a little quicker with less dodging.<\/p>\n
\u201cThere are uncomfortable texts and emails for both sides, so just acknowledge it as a bad look and get on with it,\u201d Bell said. \u00a0<\/p>\n
And if they don’t, Judge Bell is going to start being the one to ask the witness to answer.<\/p>\n
Bell says the jury is being subjected to redundancy ‘and they’re seeing a lot of trees and not a lot of forest’ and ‘they are seeing tree after tree.’<\/p>\n
NASCAR had intended to call Roger Penske as a witness but is only available on Monday. Chris Yates, the lead attorney for NASCAR\u2019s defensive, asked that Penske be allowed to testify on Monday even if out of order. Kessler objected because it would disrupt the story and order he intentionally is trying to present to the jury.<\/p>\n
Bell agreed with Kessler and NASCAR was told to have Penske available when his time comes because \u2018federal trials are an inconvenience.\u2019<\/p>\n
The jury was told this would be a two week trial, but now it\u2019s looking to extend into the third-week, and Bell said the inconvenience on the jury would be unacceptable to increase that commitment by 50 percent.<\/p>\n
\u201cI would have a full blown riot,\u201d Bell said of his jury, approaching the holidays.<\/p>\n
\u00a0<\/p>\n
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