VIDEO: Breaking down the first 2 days of the NASCAR antitrust trial

CHARLOTTE, N.C. — As expected, the NASCAR antitrust trial started tense with two days of testimony, most notably from 23XI Racing co-owner Denny Hamlin.

Hamlin showed strong emotion on the stand, especially when attorney Jeffrey Kessler questioned him on personal questions for the jury to get to know him.

Beyond Hamlin’s testimony, NASCAR’s Scott Prime took the stand and took questions from Kessler, who sought to tee up his case that NASCAR used anticompetitive acts to get and maintain their monopoly.

How far did they get in the first two days of an expected 10-day trial? TRE’s Jonathan Fjeld broke it down with TSJ Sports’ Peter Stratta — who was there in the courtroom for the first day — and Stiletto Group’s JoHanna Cox:

NASCAR released these takeaways to TRE from the first two days:

Day 2

Today’s testimony confirmed that 23XI Racing purchased from another team a Charter, Denny Hamlin signed it agreeing to all of its contractual terms, got paid every penny due under the 2016 Charter – and now they want to claim they should receive a 900% return for supposed damages under the 2016 Charter.

Most of the testimony focused on the two-and-a-half-year negotiation over the 2025 Charter which 23XI and Front Row Motorsports did not sign. They made a choice to forfeit their Charters instead of signing them as 32 Charter holders did.

The 2016 agreement was itself a multi-year negotiated agreement that delivered many fundamental wins for race teams, including guaranteed starting position in every race, contractually secured payments of over $300 million a year to teams and a valuable long-term asset they can buy, sell, or lease at will – as Front Row has done on several occasions. 23XI and Front Row both kept buying Charters at ever-increasing prices even though they now say that the 2016 Charters were unfair to the teams.

Based on witness testimony and exhibits entered into evidence today, several key points about Denny Hamlin and 23XI were revealed:

1. 23XI has been profitable and the owners continue to do well financially:
   • Mr. Hamlin alone is making $14 million by driving for Joe Gibbs Racing.
   • Mr. Hamlin and Mr. Jordan are charging their own team $1 million in rent for their $35 million Airspeed facility.
   • 23XI made profits of approximately $2.5 million in 2022 and $3.4 million in 2023, before the team began paying rent last year for the Airspeed facility owned by Mr. Hamlin and Mr. Jordan and paying legal fees for this litigation.
   • 23XI spent $28 million to acquire a third charter in 2024 after acquiring two charters for $13.5 million (2021) and $4.7 million (2020).
   • According to Plaintiffs’ own expert, 23XI was worth at least $160.2 million just four years after it began racing. 

2. Mr. Hamlin made it clear he “took care of his people,” but 23XI pays its drivers only approximately 22% of its revenues even though its counsel pointed out that athletes get paid far more on a percentage basis in other sports.

3. Exhibits also showed Mr. Hamlin’s business partners believe he is an elite driver, but was a cost control problem for 23XI.

4. When Mr. Hamlin pitched Mr. Jordan on building a team, he projected a 10% ROI. And now, 23XI’s owners want at least $205 million in damages, a 900% return on investment (ROI). His comments on the witness stand show he believes that NASCAR should subsidize their racing operations while they keep all their own sponsorship revenues.

5. Mr. Hamlin acknowledged that none of the alleged anticompetitive claims brought in his lawsuit against NASCAR were raised during negotiations for the 2025 charters, including in the 8-point letter that was the subject of much of today’s events.

Day 1

Here are three key takeaways from NASCAR’s perspective on Day 1 in court:

1. The teams asked NASCAR for the charter system, negotiated with NASCAR and agreed to all of its terms, including commitments to be all-in to grow the Cup Series. NASCAR kept its word to the teams, paying every dollar owed to teams over the course of nine years.
2. None of the allegedly anticompetitive conduct raised in the lawsuit and court today were raised during the two-plus years of negotiations which consisted of 70 meetings, correspondence and drafts of the 2025 charter agreement. In addition, 23XI’s September 6, 2024 letter to NASCAR explaining why it would not sign the 2025 charter said nothing about alleged anticompetitive conduct—and the same is true of Front Row’s letter to NASCAR explaining why it would not sign the 2025 charter agreement.
3. If the system is unfair, anticompetitive and below market, why did 23XI Racing buy a charter not once, not twice, but three times? And why did Front Row Motorsports buy, sell and lease its own charters multiple times? And why did they want them forever? Remember, teams received charters for free and they’re now worth over $45 million.