23XI statement on not signing Charter agreement

Charlie Spencer said:
Outright ownership of the charters. Everything else is window dressing. I haven't been able to figure out why NASCAR structured the charters as contractually expiring in the first place.
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They run the length of the media agreement is why.
They have 2 whole sections of complaints...multiple complaints.
 
StandOnIt said:
They run the length of the media agreement is why.
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Yep, but I don't understand why the charter agreement is concurrent with the media one, or why it has to be tied to anything else at all. Maybe it's because I'm thinking of charters as similar to franchises, and those don't change with TV contracts.
 
Charlie Spencer said:
Yep, but I don't understand why the charter agreement is concurrent with the media one, or why it has to be tied to anything else at all. Maybe it's because I'm thinking of charters as similar to franchises, and those don't change with TV contracts.
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I suppose so. They renegotiate the charters after every TV deal is finalized. They can set their budgets.
 
StandOnIt said:
I suppose so. They renegotiate the charters after every TV deal is finalized. They can set their budgets.
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OK. Here is where the sticky widget comes in. The TV deal is negotiated by NASCAR. The teams budgets are determined by the teams & their sponsors.

Never shall the two meet.

NASCAR is a business. The teams are a DIFFERENT business. As you've explained, they are NOT part of NASCAR. Since they are NOT a part of Nascar and sponsors don't last forever, what value does a team have after the sponsors leave? Used to be, the cars & equipment were auctioned off every so often. Nascar has shown they would have no problem changing the rules about what parts/cars/engines/etc can be used. What you OWN is now worth whatever an ARCA team will pay for it. Unless of course, since Nascar owns ARCA too, they decide...nope.
 
KTMLew01 said:
OK. Here is where the sticky widget comes in. The TV deal is negotiated by NASCAR. The teams budgets are determined by the teams & their sponsors.

Never shall the two meet.

NASCAR is a business. The teams are a DIFFERENT business. As you've explained, they are NOT part of NASCAR. Since they are NOT a part of Nascar and sponsors don't last forever, what value does a team have after the sponsors leave? Used to be, the cars & equipment were auctioned off every so often. Nascar has shown they would have no problem changing the rules about what parts/cars/engines/etc can be used. What you OWN is now worth whatever an ARCA team will pay for it. Unless of course, since Nascar owns ARCA too, they decide...nope.
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Nascar pays a fixed amount to the teams for every race. Chartered teams receive a fixed payout for each race, which is consistent regardless of performance. This provides a baseline income to ensure financial stability for charter teams.

They get money from the year end points fund
They get performance incentives based over a three year period

This one below should be pretty easy to figure because it isn't based on performance.

  • A significant portion of NASCAR’s revenue comes from media rights deals, with a new $7.7 billion deal over seven years starting in 2025 (approximately $1.1 billion annually). This revenue is divided among tracks (65%), teams (25%), and NASCAR (10%). Teams receive their share of this broadcast revenue, which is a critical component of their income.

    Recent claims suggest NASCAR has increased team payments by 62% under the new charter agreement, though the exact percentage of revenue teams receive remains debated (e.g., estimates suggest teams now get around 40% of broadcast revenue compared to 25% previously).
 
StandOnIt said:
Nascar pays a fixed amount to the teams for every race. Chartered teams receive a fixed payout for each race, which is consistent regardless of performance. This provides a baseline income to ensure financial stability for charter teams.

They get money from the year end points fund
They get performance incentives based over a three year period

This one below should be pretty easy to figure because it isn't based on performance.

  • A significant portion of NASCAR’s revenue comes from media rights deals, with a new $7.7 billion deal over seven years starting in 2025 (approximately $1.1 billion annually). This revenue is divided among tracks (65%), teams (25%), and NASCAR (10%). Teams receive their share of this broadcast revenue, which is a critical component of their income.

    Recent claims suggest NASCAR has increased team payments by 62% under the new charter agreement, though the exact percentage of revenue teams receive remains debated (e.g., estimates suggest teams now get around 40% of broadcast revenue compared to 25% previously).
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But none of that need be tied to the benefits of charter onership. All the payouts and incentives can be reset every several years without affecting who is guaranteed to start, etc. " Hey, here's the new contract, here's the cut for charter owners, the cut for independent teams."
 
Charlie Spencer said:
But none of that need be tied to the benefits of charter onership. All the payouts and incentives can be reset every several years without affecting who is guaranteed to start, etc. " Hey, here's the new contract, here's the cut for charter owners, the cut for independent teams."
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Well said. Exactly what I wanted to say.
 
DIDIT said:
I thought I was following what was happening in this thread but from the last barrage of posts I am totally clueless.
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There is nothing to be learned here on Racing Forums. The courts will decide everything much to some people's dismay. I tend to retain a sense of humor about any discussion. Some have no sense of humor. The mods will likely delete that video. It was meant as a joke. No harm done. Some REALLY need to laugh more.
 
DIDIT said:
I thought I was following what was happening in this thread but from the last barrage of posts I am totally clueless.
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It gets muddy sometimes.The short answer is below. The teams are trying to get the injunction back to race as chartered teams (having your cake and eating it too), Nascar has issued statements against that.

In other words Nascar in a court of law proved that the teams claims of the Sherman act were bogus. The teams have appealed.
 
StandOnIt said:
In other words Nascar in a court of law proved that the teams claims of the Sherman act were bogus. The teams have appealed.
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The teams’ anti-trust claims have yet to be adjudicated.

You’re 3 months short of the first day of the trial that will do that.
 
aunty dive said:
The teams’ anti-trust claims have yet to be adjudicated.

You’re 3 months short of the first day of the trial that will do that.
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Their anti trust claims have already been disproved and are on appeal. Not looking like a very strong case.

Yes, the claims made by 23XI Racing regarding violations of the Sherman Act were initially supported by a preliminary injunction, but this was later overturned by the U.S. Court of Appeals, which ruled that the plaintiffs did not demonstrate a likelihood of success on the merits of their case. The legal battle continues as they seek further recourse in court. FOX Sports scl-llp.com
 
The U.S. District Court for the Middle District of North Carolina will hear the NASCAR antitrust lawsuit filed by 23XI Racing and Front Row Motorsports in December. Specifically, the lawsuit will be heard on December 1st, as stated in court filings. The case was originally scheduled for a January hearing, but the date was moved to accommodate the court's schedule.

Key Details:
  • Court: U.S. District Court for the Middle District of North Carolina.

  • Date: December 1st (originally scheduled for January).

  • Plaintiffs: 23XI Racing and Front Row Motorsports (owned by Michael Jordan).

  • Defendant: NASCAR.

  • Issue: The antitrust lawsuit challenges NASCAR's charter system and the teams' charter status.

  • Background: 23XI and Front Row were granted a preliminary injunction allowing them to race as chartered teams while the case proceeds, but a court of appeals ruling reversed that decision,
The overturned injunction ruling is being appealed. The teams’ claims have not been disproved.
 
A bit more issues than posted above. The reason the injunction was overturned was because in section 2 of the Sherman Act Nascar's no sue clause didn't prove exclusionary conduct by Nascar. So #3 below is bogus.

23XI Racing, along with Front Row Motorsports, filed a lawsuit against NASCAR on October 2, 2024, in the Western District of North Carolina, alleging violations of Sections 1 and 2 of the Sherman Antitrust Act. Their claims assert that NASCAR engaged in monopolistic and anticompetitive practices to maintain control over stock car racing. The specific allegations include:
  1. Monopolistic Control Over Tracks: NASCAR owns or controls most premier stock car racing tracks in the U.S., allegedly using this dominance to exclude competitors and limit teams’ ability to participate in non-NASCAR events.
  2. Exclusivity Agreements: NASCAR imposes restrictive contracts on teams and tracks, preventing them from engaging with rival racing series, which stifles competition and reinforces NASCAR’s market dominance.
  3. Charter System Restrictions: The charter system, which guarantees teams entry into races and a share of revenue, includes a release clause that prohibits teams from suing NASCAR. The plaintiffs claim this clause, along with other charter terms, unfairly limits their rights and bargaining power, constituting an unreasonable restraint of trade.
  4. Suppression of Competition: NASCAR is accused of using its control over the sport to block the formation of rival racing series, acquire competing tracks, and enforce rules that prioritize its financial interests over fair competition.
  5. Economic Coercion: The lawsuit alleges that NASCAR’s practices, such as tying team revenue to compliance with its terms, harm teams’ ability to operate independently and innovate, further entrenching NASCAR’s monopoly.
 
The only matters that have been ruled on are pretrial motions filed by both sides. This includes the injunction. No antitrust claims central to the case have been proven or disproven, because the trial has not taken place. This is the nature of a court case. The level of blatantly incorrect information being posted is staggering.
 
gnomesayin said:
The only matters that have been ruled on are pretrial motions filed by both sides. This includes the injunction. No antitrust claims central to the case have been proven or disproven, because the trial has not taken place. This is the nature of a court case. The level of blatantly incorrect information being posted is staggering.
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If you are referring to my post above, you will need to take it up with AI. Personally, when a team loses the ability to be a chartered team and becomes an open one? At this point I can't say they are coming from a position of strength at the present time. That was a serious allegation, part of their anti-trust case.
 
I'm not interested in arguing with low quality AI responses. Most people realize that AI is often wrong, and will make incorrect assertions with supreme confidence.

There is at least one attorney who posts here. Would one of them have time to explain the difference between rulings on pretrial motions and rulings on the merits of the case itself?

If the antitrust claims had already been "disproven", NASCAR would file a motion for summary judgment, that motion would be granted, and the case would be over.

Instead, when and if the trial begins, those proceedings will be focused on arguing whether NASCAR is in violation of antitrust law. No decision will be issued on that until the trial concludes.
 
gnomesayin said:
I'm not interested in arguing with low quality AI responses. Most people realize that AI is often wrong, and will make incorrect assertions with supreme confidence.

There is at least one attorney who posts here. Would one of them have time to explain the difference between rulings on pretrial motions and rulings on the merits of the case itself?

If the antitrust claims had already been "disproven", NASCAR would file a motion for summary judgment, that motion would be granted, and the case would be over.

Instead, when and if the trial begins, those proceedings will be focused on arguing whether NASCAR is in violation of antitrust law. No decision will be issued on that until the trial concludes.
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There isn't anti trust "claims". What there was if if you can look above and widely stated by others and in court documents that the anti-sue statement the teams had a problem with and referenced it to section 2 of the Sherman Act...says it right there. was dis-proven. So any way you want to spin it is your deal, but that is what happened. The result was that all of 23XI teams and all of Front Row teams are now currently open Nascar teams.
 
Any ideas on what could happen if NASCAR prevails on August 28 & then holds an auction for the 6 charters but loses its case in December?
 
StandOnIt said:
It's possible if Nascar lost, they could create more charters.
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True, although it could only create four more unless it increases the field size beyond 40 cars. Even four more would leave no room for independents and would require reduthe payouts per chartered team. Still, it's possible.
 
Charlie Spencer said:
True, although it could only create four more unless it increases the field size beyond 40 cars. Even four more would leave no room for independents and would require reduthe payouts per chartered team. Still, it's possible.
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If we’ve learned anything, it’s NASCAR can and will do whatever the hell the France family wants. Period. Full stop.
 
Charlie Spencer said:
True, although it could only create four more unless it increases the field size beyond 40 cars. Even four more would leave no room for independents and would require reduthe payouts per chartered team. Still, it's possible.
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New charter buyers can only get three charters max now. Seems like they want more diversity. Diversity, that's a bad word in some camps lol.
 
Charlie Spencer said:
True, although it could only create four more unless it increases the field size beyond 40 cars. Even four more would leave no room for independents and would require reduthe payouts per chartered team. Still, it's possible.
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They can't even field 40 cars at most races right now, what good would increasing the field do?
 
Whatever it takes to get Jr Motorsports into the Cup field full-time.
 
I haven't thought about the Jr. angle. Something to keep an eye open for lol. I wouldn't put that past them either.
 
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