23XI and FRM will keep NASCAR charters in huge legal victory

23XI Racing and Front Row Motorsports have been granted a preliminary injunction to retain their charters for the 2025 season pending the end result of an antitrust lawsuit against NASCAR and the France family. The ruling applies only to next 12 months and states that the disputed portions of the 2025 Charter Agreement, which gave rise to this lawsuit, should not enforceable while the legal battle continues. Wednesday's court ruling cited an exemption clause in the brand new charter agreement that stops teams from bringing antitrust claims against the game after signing it.

The court's order read as follows: “The Court hereby grants a limited preliminary injunction solely for the duration of the 2025 NASCAR Cup season as follows: Defendants (NASCAR) and their agents, servants, employees, attorneys, and all persons actively cooperating with or participating with Defendants, must allow Plaintiffs (23XI/FRM) to enter two race cars each in all NASCAR Cup races in accordance with the terms of the 2025 Charter Agreement applicable to all charter teams, with provided that the wording “exemption” contained in Art. 10.3 of the 2025 Charter Agreement is not going to be enforceable to the extent that it will discharge or exclude the Claimants' claims in these proceedings.

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“In addition, NASCAR is tentatively enjoined from refusing to approve Plaintiffs' purchase of two Stewart-Haas Racing, LLC charters, from which Plaintiffs will be entitled to race in all 2025 NASCAR Cup races on the same terms as other charter teams, again with the exception of the application of the waiver language to claims of the Plaintiffs in these proceedings and 3. The timetable for conducting the case will be established by the Court, which, in the absence of a voluntary resolution of this dispute between the Parties, will provide for the termination of the process regarding the claims Reasons before the start of the 2026 NASCAR racing season.”

Attorney Jeffrey Kessler, who represents 23XI and FRM, responded to the news with the next statement: “We welcome Judge Bell's decision today granting a preliminary injunction in our favor. The court ruling allows 23XI and Front Row Motorsports to race existing cars as charter teams in next 12 months's Cup Series. The decision also requires NASCAR to approve each teams' purchase of a 3rd charter from Stewart-Haas Racing and permit those cars to also race as chartered teams within the 2025 season. We are confident within the strength of our case and can proceed to fight to maintain racing moving forward and becoming more a competitive and fair sport in a way that advantages the teams, drivers, sponsors and, most significantly, our fans.

23XI co-owner and three-time Daytona 500 winner Denny Hamlin expressed his feelings more directly after the decision:

To obtain a preliminary injunction, the plaintiff (on this case, racing teams) must show that: it’s prone to succeed on the merits, it’s prone to suffer irreparable harm without the injunction being lifted, the equity balance tilts in its favor, and an injunction could be in the general public interest.

The teams originally lost their motion for a preliminary injunction filed on November 8 when the judge noted that failure to prove irreparable harm would end in the lack of the charter. 23XI/FRM then filed an appeal, but as a consequence of changing circumstances, decided to withdraw the appeal and re-file the motion for a preliminary injunction under a brand new approach. Instead of asking the court to grant them statutes, they asked to be allowed to compete under the 2025 Charter Agreement, aside from the exemption clause.

Notably, the case was reassigned to Judge Frank D. Whitney, who denied the initial request for an injunction in November, and is now within the hands of Judge Kenneth D. Bell.

Wednesday's ruling will allow 23XI and FRM to retain their statutes until the continued antitrust lawsuit against the game is resolved. It also means they’ll finalize the acquisition of a 3rd charter for every of the now-defunct Stewart-Haas Racing, which NASCAR must now approve. 23XI has already announced a 3rd automotive with Riley Herbst, while FRM can be expected to expand, with Zane Smith reportedly the favourite for the team's third spot.

Tyler Reddick, 23XI Racing, Jordan Brand Toyota Camry, Todd Gilliland, Front Row Motorsports, CITGARD Ford Mustang

Photo: Gavin Baker / NKP / Motorsport Images

Another interesting a part of the ruling is the court's finding that “NASCAR has a monopoly/monopsony position in the relevant market, which is the market for the premier stock car racing teams in the United States.” It goes on to state that Formula 1 and IndyCar should not substitutes and that “NASCAR fully controls which race teams can compete at the highest level in stock car racing – in fact, it has 100% of the market share.” This confirms the team's important argument within the antitrust lawsuit, which accuses NASCAR of being an illegal monopoly.

The ruling also asked the next query in reference to the anti-competitive nature of the challenged exemption clause: “Can a monopolist require a party to agree to release the monopolist from any allegations of its violation of antitrust laws as a condition of conducting business activity?” the reply isn’t any.

The court also found that, unlike the primary, unsuccessful injunction application, the teams had proven that the likelihood of immediate harm had modified from “remote and speculative to present and immediate.” They cited the indisputable fact that Tyler Reddick's contract with 23XI can be voided if he competes on open teams and he’s allowed to depart for a rival organization. Several other drivers operating under 23XI/FRM have expressed similar concerns about uncertainty around their contracts. The lack of charters also impacted the teams' relationships with key partners Monster Energy and Love's Travel Stops.

NASCAR will appeal the ruling and has asked for enforcement of the order to be delayed until the appeal hearing.