Why Is NASCAR Calling Michael Jordan’s 23XI & Front Row Motorsports an ‘Illegal Cartel’ In New Lawsuit?

When Michael Jordan entered NASCAR as co-owner of 23XI Racing in 2020, he brought his competitive fire to a new arena. Now, the NBA legend finds himself in a different kind of contest — a federal lawsuit with NASCAR that could reshape the economics of America’s premier motorsport.

Jordan Versus NASCAR Heats Up

Jordan’s 23XI Racing and Front Row Motorsports filed a lawsuit against NASCAR and CEO Jim France in October 2024, alleging “anticompetitive and exclusionary practices” that benefit NASCAR at the expense of racing teams. NASCAR countered with its own lawsuit, calling the teams “an illegal cartel” and specifically targeting Jordan’s longtime business adviser Curtis Polk.

NASCAR’s lawsuit claims that Polk coordinated a scheme by “representing all teams in negotiations, coordinating their conduct, and threatening teams that considered leaving the conspiracy.”

At the heart of this conflict is NASCAR’s charter system—the sport’s equivalent of franchises that guarantee teams starting positions in races and certain financial benefits. The dispute erupted after contentious negotiations over extending these charters beyond their Dec. 31, 2024 expiration date.

According to The Athletic, during a press conference, Polk called the fight with NASCAR “David facing Goliath,” alleging that teams were pressured into accepting a deal under “significant duress.” He argued that the terms were “particularly harmful to our operations and our ownership group’s interests and intellectual property rights.”

“This isn’t the 1960s, and these predatory practices will not withstand scrutiny and be accepted in 2024,” Polk declared. “NASCAR has superior bargaining power and undue influence over the sport and the charter process.”

The financial stakes are massive. What began as a $2 million investment when charters were introduced has skyrocketed in value, with one charter even selling for $40 million in 2023. Both 23XI and Front Row reportedly paid between $20-25 million each for additional charters from Stewart-Haas Racing last year.

NASCAR’s new television rights deal, worth $1.1 billion annually through 2031, formed the backdrop for these negotiations. NASCAR’s final offer included increasing teams’ share to nearly 50 percent of this windfall, but 23XI and Front Row held out for more substantial concessions.

The teams sought four key objectives: a larger revenue share, formal governance roles, profit participation when team or driver likenesses are used, and permanent charters to secure long-term stability.

NASCAR attorney Chris Yates made the stakes clear: “If they prevail, the charter system likely goes away.”

The midnight deadline approach — which Polk called “significant duress” — succeeded in getting 13 of 15 teams to sign. Hendrick Motorsports owner Rick Hendrick admitted signing “out of exhaustion.”

The rushed nature of the negotiations created additional tension. Multiple teams told The Associated Press that the contract document “was filled with grammatical errors and was far from being ready for signing.”

Teams submitted revisions, only to receive a 105-page response at 5 p.m. on Sept. 6, 2024, with the midnight deadline looming. Jordan refused to sign it.

NASCAR’s lawsuit even cites Dale Earnhardt Jr. as a potential team owner who was dissuaded by the “cartel” from purchasing a charter because, as he explained on his podcast, “This charter that I want to buy is a losing proposition. It’s broken. That I don’t want to buy this charter now, because it’s not a successful business.”

Despite the legal battle, both 23XI and Front Row continue competing in NASCAR and have expanded to three full-time teams each after a judge ruled 23XI and Front Row they can remain on the track until the litigation is resolved.

A Dec. 1 jury trial date has been set, but NASCAR’s legal team has firmly stated they have no interest in settling. As Yates put it, “The deal is the deal. Front Row and 23XI may think that by suing NASCAR, they can achieve better terms. But that is not NASCAR’s intent at all.”

This is not the first time that Jordan has owned a sporting franchise.

The six-time NBA champion bought the Charlotte Hornets (then known as the Charlotte Bobcats) from BET founder Robert L. Johnson in 2010, becoming the first former NBA player to own a majority stake in a franchise. Under his ownership, the team rebranded back to the Hornets in 2014 and saw its value grow significantly. In 2023, Jordan sold his majority stake for approximately $3 billion but retained a minority interest in the franchise.

For Jordan, who built his brand on competitive excellence and business acumen, this represents more than just motorsport politics—it’s about establishing a sustainable business model in a sport traditionally controlled by a single family. The outcome could determine whether his racing venture becomes another business triumph or a costly lesson in the power dynamics of established sports organizations.