Why Denny Hamlin and Michael Jordan sued NASCAR? The antitrust trial now steering the sport's direction

NASCAR driver Denny Hamlin and basketball legend and 23XI Racing co-owner Michael Jordan, along with Front Row Motorsports, filed a federal antitrust lawsuit against the sanctioning body last October. The trial for the case, which challenges NASCAR's charter system and broader business practices, started earlier this week and could steer the sport's direction for years to come.

The legal battle centers on what the two owners have called an unfair deal that threatens competitive balance and long-term viability for teams. They claimed that NASCAR uses its dominant control over the sport to squeeze teams with rigid rules and a limited revenue share.

The updated charter agreements for 2025 were the tipping point that led Hamlin and Jordan to take legal action. NASCAR introduced the charter system in 2016 that acts like a franchise license. The charter guarantees a car's entry in every race plus a share of the weekly race revenue. But 23XI owners have said that under the new deal, teams get too little for the money.

On the second day of the trial, Hamlin testified that running a single car for a 38-race season costs about $20 million. The chartered payout guaranteed in the new deal was about $12.5, which would leave teams running at a loss unless they secure big sponsors. And so, Hamlin likened the charter deal to a "death certificate" for team owners.

"I didn't sign because I knew this was my death certificate for the future. I have spent 20 years trying to make this sport grow as a driver and for the last five years as a team owner. 23XI is doing our part. You can't have someone treat you this unfairly and I knew It wasn't right. They were wrong and someone needed to be held accountable," Denny Hamlin said (via Associated Press).

Hamlin and Jordan argued that the charter system was just one part of a much larger problem. They pointed out that NASCAR owns many of the major racetracks used in Cup Series events and restricts who can supply parts for the Next Gen race cars, which were introduced in 2022. That, they argued, reduces competition among parts providers and raises costs.

Cup teams accuse NASCAR leadership of monopoly-style control

23XI Racing and FRM, who are seeking $205M in damages, also claim this structure squeezes teams while generating millions in profits for NASCAR and its leadership family.

According to evidence presented at trial, about 75 percent of Cup Series teams lost money in 2024. Yet over the past three years, nearly $400 million flowed to the family trust tied to NASCAR's founding France family.

The trial is expected to continue for two weeks, but appeals after a ruling are likely to take years. The outcome could restructure revenue distribution or prompt other changes to how NASCAR does business.