Michael Jordan's NASCAR team fights for charter status amid explosive lawsuit

CHARLOTTE, N.C. (AP) — Two NASCAR teams, one owned by NBA Hall of Famer Michael Jordan, on Tuesday argued to a federal judge why the organizations still should be issued a preliminary injunction to be recognized as chartered organizations until their antitrust suit against the stock car racing series is finished. The 11-page filing in U.S. District Court for the Western District of North Carolina was in response to NASCAR notifying Judge Kenneth Bell it would not re-distribute any charters to new participants while the case heads toward its Dec. 1 court date. NASCAR's backtrack Friday came one day after an acrimonious hearing that included the disclosure of expletive-laden emails and text messages from Jordan and other high-profile litigants. 23XI Racing, the team owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins, are suing NASCAR over antitrust claims regarding the charter system. A charter is the equivalent of a franchise and guarantees chartered cars both a spot in the 40-car field each week, as well as a significantly larger chunk of payouts. NASCAR last September, after more than two years of contentious negotiations, presented teams with its final offer on charter extensions; 13 organization signed the agreements, but 23XI and Front Row refused. The two teams initially won a preliminary injunction to be recognized as chartered for this season until a jury verdict on the antitrust allegations. That was overturned, and 23XI and FRM are currently competing as "open" teams. NASCAR wants the money back the teams were paid during the portion of the season they were chartered. The teams also have appealed to have the chartered status reinstated, but NASCAR argued in court last week it has an interested buyer for one of the six charters previously held by 23XI and FRM, and it plans to immediately begin redistributing the charters. NASCAR backtracked after Thursday's hearing, and a ruling on the preliminary injunction is expected to come from Bell this week. NASCAR maintains that in holding off on redistributing charters, 23XI and FRM are no longer in danger of suffering irreparable harm. The teams countered Tuesday the threat still exists "because of the risk of breach claims from their irreplaceable drivers and loss of sponsors in the absence of charter rights." Tyler Reddick of 23XI has a clause in his contract that says the team would be in breach if his Toyota is not chartered. Jeffrey Kessler, the attorney for the two teams, indicated in court that Reddick has notified 23XI it is in breach. Kessler also argued that NASCAR agreeing not to redistribute any charters now "does not moot Plaintiffs' Motion for Preliminary Injunction or eliminate Plaintiffs' irreparable harm if no relief is provided." The 13 teams that are chartered are becoming frustrated with the case — Bell warned last week the entire charter system is in danger of imploding if a settlement is not reached — and the non-suing teams believe their valuations are being harmed by the litigation. Dan Towriss, the majority owner of the Spire Motorsports' NASCAR team, as well as owner of Cadillac F1, Andretti Global and other motorsports properties, said he was "very disappointed with the direction" the lawsuit has taken. "We had meetings with the NASCAR brass a few weeks ago and it's 'How can we help?'" Towriss said at last weekend's IndyCar season finale. "What we saw (in court), what was released in that case is very inconsistent with what they (NASCAR) say privately. And so I need to understand, 'Who am I dealing with? Which one is it? Is it the people we meet with privately, or is what you say when we're not around?'" Towriss said he'd also like to see NASCAR reach a settlement with 23XI and FRM.