NASCAR’s Antitrust Trial Could Rewrite the Rulebook

In late 2024, 23XI Racing and Front Row Motorsports declined to sign NASCAR’s new charter agreement for the 2025 season and filed an antitrust lawsuit against the league.¹ The lawsuit alleges that NASCAR employs monopolistic and exclusionary practices.² NASCAR countersued, claiming that the teams illegally colluded to blackmail and manipulate NASCAR and guarantee better terms for the 2025-2031 league agreement.³

The dispute centers around NASCAR’s charter system, that guarantees teams qualification in every Cup Series race and a cut of the revenue, while simultaneously requiring teams to forfeit antitrust claims for any past or future NASCAR actions.⁴ The teams argue that employs a “take it or leave it” tactic to strong arm them into signing the unfair charters and to stomp out the growth of any rivaling series.⁵ Antitrust scholars question the legality of the clauses, and view this case as a potential landmark decision balancing antitrust principles versus freedom of contract.

Earlier this week I spoke with Christine Bartholomew, Esq., UB’s leading antitrust expert, to get her view of the case as it stands and potential outcomes. During our discussion, she explained that courts judging antitrust cases tend to give special carve outs to sports leagues for actions that normally would be considered violations of the Sherman Act, the leading antitrust legislation. In the 1922 Supreme Court case, Federal Baseball Club v. National League, the Supreme Court held that Major League Baseball is exempt to antitrust claims, a decision they would affirm in 1953 and again 1972.⁶ Professor Bartholomew explained that we may be on the doorstep of a similar decision.

NASCAR’s insistence upon a clause releasing it from antitrust liability is problematic. Professor Bartholomew contends that such a clause purporting to waive antitrust claims for both past and future behavior is unlikely to be valid. Someone cannot give up their right to sue for something that has not yet occurred, as they do not know the rights they are giving up. Yet, courts often uphold arbitration agreements and sometimes liability release forms. The clause is a small piece of a greater issue that courts are dealing with, the battle between antitrust laws and freedom of contract. This battle is complicated further due to the fact that sports leagues cannot function without the use of contracts and exclusionary tactics, the very things the Sherman Act attempts to prevent.

The suit can end any way, but NASCAR has already prepared for the worst. A piece of evidence from a September 15 hearing outlines NASCAR’s drastic contingency plan. A 2024 presentation titled “Project Gold Codes” details a potential plan if all the teams were to refuse to sign the 2025 agreement.⁷ In this scenario NASCAR would eliminate all of the teams and independently hire the drivers and mechanics.⁸ If only some of the teams were to boycott the agreement, NASCAR had a list of potential new team owners who would be more cooperative.⁹ The teams argue that this plan shows that NASCAR had complete and total control over the agreement negotiations.¹⁰ NASCAR may attempt to enact this plan if they were to lose the lawsuit. Trial is set for December, and the outcome can change both the landscape of NASCAR and the application of antitrust law.

1. https://apnews.com/article/nascar-charters-michael-jordan-423f18857461af57fc7da7bd7f2dd130 ↩︎
2. https://www.nytimes.com/athletic/5810445/2024/10/02/23xi-racing-front-row-nascar-lawsuit/ ↩︎
3. https://www.foxsports.com/stories/nascar/what-know-about-nascar-antitrust-lawsuit ↩︎
4. Id. ↩︎
5. Supra, note 2. ↩︎
6. https://constitutioncenter.org/blog/on-this-day-supreme-court-upholds-baseballs-antitrust-exemption ↩︎
7. Supra, note 2. ↩︎
8. Id. ↩︎
9. Id. ↩︎
10. Id. ↩︎