The settlement brings an end to the immediate dispute but serves as a reminder for sports organizations and teams to carefully consider the competitive implications of contractual arrangements and exclusivity provisions.

On December 11, 2025, NASCAR settled an ongoing and closely watched antitrust trial brought by two racing teams, 23XI Racing (co-owned by Michael Jordan) and Front Row Motorsports, in the U.S. District Court for the Western District of North Carolina. The settlement was announced after the plaintiffs had presented their case-in-chief and following testimony from several high-profile witnesses, including Jordan. The financial terms of the settlement have not been publicly disclosed, but the agreement aims to provide a more equitable business framework for teams in the sport.

The settlement grants teams permanent (or “evergreen,” according to the settlement) charters, resolving allegations that NASCAR unlawfully maintained monopoly power over premier stock car racing through restrictive contract terms and exclusivity provisions embedded in its charter system. In addition to all 15 charter-holding teams having their charters become permanent rather than expiring at the end of a set term, the settlement terms have been reported to include teams receiving a say in governance and a greater percentage of various NASCAR revenue streams.

Key Takeaways

• Exclusive Contracting in Sports Leagues May Increase Antitrust Scrutiny: The case underscores that exclusivity, noncompete and single-source supply provisions in professional sports agreements may raise antitrust concerns, particularly where they are imposed by a dominant league or sanctioning body.
• Revenue Allocation Structures Can Be Central to Competition Claims: Trial testimony highlighted how disparities in revenue sharing, particularly when tied to mandatory participation or access to competition, can form the basis of allegations that a league’s structure suppresses competition or entrenches market power.
• Negotiation Dynamics Matter: Testimony emphasized the legal significance of “take-it-or-leave-it” contracting practices, especially when accompanied by short deadlines and the threat of competitive exclusion.
• Structural Remedies Can Resolve Antitrust Disputes Without Adjudication: The settlement’s inclusion of “evergreen” charters and governance rights for teams demonstrates how structural changes to league governance and contracting frameworks can address competition concerns and facilitate resolution without a judicial determination on liability.

Litigation Background

NASCAR operates the nationally prominent NASCAR Cup Series (NCS). In 2016, it implemented a charter system that fundamentally altered the structure and economics of premier stock car racing. Under the system, only teams holding a charter, which were revocable by NASCAR, were guaranteed starting positions in NCS events, along with a share of certain revenues. While the system provided competitive stability, teams continued to bear substantial ongoing costs related to vehicle construction, maintenance and operations. Unlike the franchises in most major professional sports leagues, the charters were not permanent—akin to the New York Yankees not having a permanent spot in Major League Baseball.

In 2018, NASCAR introduced the Next Gen program, which standardized key components of NCS vehicles and required teams to purchase those components from NASCAR-designated, single-source vendors. The program also provided that NASCAR retain ownership of the standardized parts and that any vehicle containing such parts could not be entered in non–NCS competition. This further limited teams’ operational flexibility and alternative competitive opportunities.

In September 2024, NASCAR presented teams with proposed 2025 charter terms that, among other changes, would reduce the share of revenues distributed to teams and expand restrictions on participation in competing or alternative racing events. All chartered teams ultimately signed these agreements except two: 23XI Racing and Front Row Motorsports. Both parties objected to what they characterized as overly restrictive noncompete provisions and a diminished revenue allocation, and they declined to accept the revised charter terms.

As a result, the two teams competed as “open” teams for part of the season and subsequently filed suit, alleging that NASCAR’s practices constituted unlawful maintenance of monopoly power in violation of federal antitrust laws. 23XI Racing and Front Row Motorsports alleged that NASCAR violated the Sherman Act by using its control over the NCS, and monopoly power over premier stock car racing, to enforce unfair and anticompetitive charter agreements. These alleged violations of the Sherman Act resulted in limited team revenue, were structured to maintain NASCAR’s alleged monopoly power, and limited competition. According to trial testimony, the proposed agreements were issued on September 6, 2024, with a midnight deadline, and team owners described feeling compelled or coerced to sign under duress.

Trial Testimony

Trial testimony portrayed NASCAR’s charter system as a mechanism of economic control rather than a collaborative partnership. Witnesses, including Michael Jordan, testified that the revenue structure prevented teams from sharing in the sport’s growth during profitable periods, unlike traditional professional leagues where risks and rewards are more evenly shared. Additional testimony highlighted long-term financial instability among teams, with evidence that dozens exited the sport over time due to escalating costs and insufficient revenue support. Witnesses also described the 2025 charter negotiations as highly compressed and inflexible, characterizing them as “take-it-or-leave-it” offers lacking provisions—such as “evergreen” charters—that teams viewed as essential to long-term viability.

Practical Considerations

• Exclusive Agreements Require Careful Antitrust Review: Sports organizations should evaluate whether exclusivity, sourcing and noncompete provisions are narrowly tailored and supported by procompetitive justifications.
• Revenue Allocation Can Raise Competition Concerns: Disparities in revenue sharing, when tied to mandatory participation terms, may attract heightened scrutiny.
• Control Over Market Access as an Antitrust Risk: Conditioning access to an economically dominant platform on acceptance of restrictive terms may be viewed as reinforcing market power rather than promoting competition.

The settlement brings an end to the immediate dispute but serves as a reminder for sports organizations and teams to carefully consider the competitive implications of contractual arrangements and exclusivity provisions.

For More Information

If you have any questions about this Alert, please contact Sean P. McConnell, Andrew John (AJ) Rudowitz, Bryan Shapiro, Nina Kalandadze, any of the attorneys in our Antitrust and Competition Group or the attorney in the firm with whom you are regularly in contact. 

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