NASCAR countersues 23XI and FRM, claiming scheme to “threaten, coerce, and extort” sport

Within the newest improvement surrounding the continued authorized saga between 23XI Racing, Entrance Row Motorsports and NASCAR, the sanctioning physique has determined to file its personal countersuit towards the groups.

NASCAR’s rationalization of why it filed this new lawsuit states that 23XI/FRM “not solely participated within the collusive conduct, however on data and perception, orchestrated it,” and that they had been those who violated the Sherman Antitrust Act (not NASCAR).

They declare 23XI and FRM labored to “threaten, coerce, and extort NASCAR into assembly their calls for” after refusing to conform to the phrases of the brand new settlement. NASCAR additionally questions how the Constitution system can proceed after the unique lawsuit is completed. “By claiming the Charters are unlawful agreements, Plaintiffs have opened Pandora’s field … If the Charters are deemed to be anticompetitive, then both Charters will go away totally or the cross exclusivities that benefitted each events will likely be eradicated.”

And whereas the unique lawsuit states that NASCAR violated antitrust legal guidelines, NASCAR claims the identical of the groups on this new countersuit. “This isn’t the primary time that 23XI and FRM have sought to impose their viewpoints, and people of their counsel, on the racing groups writ massive. And it’s really ironic that in attempting to blowup the Constitution system, 23XI and FRM have sought to weaponize the antitrust legal guidelines to realize their targets.”

An unlawful conspiracy to stress NASCAR

Particularly, NASCAR takes goal at 23XI co-owner (and Michael Jordan’s longtime agent/enterprise associate) Curtis Polk, saying he himself took half in anticompetitive conduct. They use aggressive language, claiming that he was decided to alter the financial panorama of the game in a approach that benefitted the groups financially and harmed NASCAR. Amongst his alleged actions, NASCAR says Polk tried to arrange a boycott of NASCAR occasions, engaged in damaging media campaigns, and even tried to immediately intrude with NASCAR’s multibillion-dollar negotiations with TV companions forward of its newest media rights deal.

In addition they say Polk threatened and coerced different groups to “not break ranks” as discussions had been ongoing and didn’t “precisely convey” NASCAR’s place to the opposite groups. Polk, who headed the Groups Negotiating Committee, was on the forefront of those negotiations. NASCAR claims they had been pressured to “negotiate with the groups individually as a result of it appeared that the TNC and Polk weren’t offering all of NASCAR’s affords to all groups/crew homeowners.”

All through the 30-page doc, NASCAR spends plenty of time discussing the historical past of the game and the France household, writing it in a vogue to fight the narrative that they’re an unlawful monopoly. In addition they fixate on the monetary burden they tackle in working the game and working occasions, constantly pertaining to how they’ve elevated the amount of cash the groups are incomes within the new Constitution settlement. The doc pushed again towards the concept groups have by no means generated a revenue by citing how each 23XI and FRM have expanded their operations forward of the 2025 season.

In line with NASCAR, the tip aim for these groups was to realize everlasting Charters, aiming to get extra money out of the sanctioning physique by utilizing strategies that in the end violate antitrust legal guidelines. They cite Dale Earnhardt Jr., who has overtly expressed a want to run a Cup crew up to now. The sanctioning physique says he was advised by the Race Workforce Alliance that the brand new Constitution settlement was a ‘dropping proposition’ and ‘damaged,’ thus deterring him. NASCAR says this was a false illustration and a part of the anticompetitive schemes cited all through the doc.

“NASCAR was harmed on account of the collusive, threatening and damaging conduct of Counterclaim Defendants,” learn the submitting. “These actions resulted in reputational and model injury at a time when NASCAR was making an attempt to resume its most essential income stream, its media rights.”

The top of the Constitution system?

NASCAR states that it was the groups who needed a Constitution system again in 2016 and that it offers little profit to the sanctioning physique, speaking about its monetary advantages and the way your complete system may now find yourself being scrapped. Within the submitting, it reads: “Though NASCAR acknowledges the worth the Constitution mannequin has delivered to Constitution groups and is definitely prepared to proceed with the mannequin on the phrases mutually agreed to, NASCAR now finds itself within the ironic place of getting to defend a mannequin that NASCAR by no means requested for within the first place and which it might be content material to not have.”

A serious sticking level with NASCAR is the truth that a December preliminary injunction allowed 23XI and FRM to compete with charters regardless of not agreeing to the 2025 Constitution Settlement … not less than during the lawsuit. NASCAR factors out how groups are free to compete as ‘open’ groups if they don’t want to conform to the phrases of the Constitution Settlement (which might imply taking a significant monetary hit and never being locked into races with bigger fields just like the Daytona 500).

Tyler Reddick, 23XI Racing, Higher Deck Toyota Camry wins the 2024 NASCAR Cup Sequence Common Season Championship and poses with crew homeowners Curtis Polk, Denny Hamlin and Michael Jordan

Picture by: Lesley Ann Miller / Motorsport Photos

In line with NASCAR, the sanctioning physique made many concessions after ‘arm’s size’ negotiations, together with elevated payouts as examples of why they consider the brand new settlement to be truthful. They hit again on the accusation that NASCAR gave groups adequate time, stating that negotiations date again to 2022. However per earlier filings from the groups, NASCAR issued them the ultimate settlement on September fifth and demanded they signal by midnight that day.

In its conclusion, NASCAR formally accuses 23XI and FRM of participating in a “conspiracy and settlement in unreasonable restraint of interstate commerce and commerce” via the aforementioned talked about techniques, thus violating the Sherman Antitrust Act. Once more naming Polk immediately, they are saying he “knowingly and actively orchestrated and took part on this unlawful conspiracy, whereas working as a member of the TNC on behalf of the RTA and aiding 23XI’s and Entrance Row’s participation within the scheme.”

23XI and FRM name counterclaim a “meritless distraction”

From crew lawyer Jeffrey Kessler: “At this time’s counterclaim by NASCAR is a meritless distraction and a determined try and shift consideration away from its personal illegal, monopolistic actions.    
 
“NASCAR agreed to the joint negotiations that they now assault. When these joint negotiations failed, they used particular person negotiations to impose their constitution phrases, which a lot of the groups determined they’d no alternative however to just accept.  
  
“My shoppers’ lawsuit has at all times been about reworking NASCAR right into a extra aggressive and truthful sport for the good thing about drivers, followers, sponsors and groups due to their love of the game. Each main sport goes via a transition to competitors when antitrust claims are asserted, and that second has come for NASCAR.  
 
“At this time’s baseless submitting adjustments nothing. We’re assured within the energy of our case and sit up for presenting it at trial.”