Executive summary

NASCAR’s modern business model rests on two linked pillars: (1) the charter system, which allocates guaranteed race entry plus an associated revenue stream, and (2) revenue sharing, which determines how broadcast/media, track, sanctioning, licensing, and other revenues are divided among NASCAR, tracks, and teams. Those pillars have now been stress-tested in federal court through a blockbuster antitrust suit filed by 23XI Racing (Michael Jordan/Denny Hamlin) and Front Row Motorsports, a case NASCAR settled during trial in December 2025. 

Even with settlement, the litigation spotlight exposed several structural vulnerabilities: allegations of monopoly power across “must-have” inputs (sanctioning, premier series access, tracks), claims that the charter deal functioned as a coercive “take-it-or-leave-it” contract, and the argument that teams are systematically underpaid compared with peer leagues.  These issues don’t disappear with one settlement; they create a template for future plaintiffs and raise ongoing risk in negotiations, governance, and public communications.

1) What the charter system is—and why it is legally sensitive

1.1 The economic reality

Charters effectively convert participation in the Cup Series into a semi-franchised model: teams with charters receive guaranteed entry and a guaranteed revenue stream tied to the charter agreement.  The system thereby controls:

Market access (who reliably competes in the top series), Asset value (charters can become tradeable, balance-sheet assets), Bargaining leverage (teams without a charter are structurally weaker).

1.2 Antitrust sensitivity: “access + revenue” is a classic choke point

In antitrust terms, a system that ties access (grid spots) to economic survival (revenue distribution) invites allegations of:

Monopolization / attempted monopolization (Sherman Act §2), if NASCAR is seen as controlling an essential competitive platform; and Unreasonable restraints (Sherman Act §1), if charter terms are framed as suppressing competition or foreclosing rival series.

The recent case explicitly framed NASCAR as a monopoly and attacked charter terms and revenue splits as anticompetitive. 

2) Revenue sharing: the most litigable part of the model

2.1 Why revenue splits become a courtroom issue

Revenue sharing is not “just” a business negotiation when one side alleges the other holds durable market power. In the 23XI/Front Row trial, plaintiffs’ economist testimony emphasized that NASCAR’s team share was far lower than certain global comparators and quantified alleged underpayment as damages. 

Even if comparators are disputed, the legal vulnerability is straightforward:

If NASCAR is framed as the unavoidable gatekeeper of top-tier stock-car racing, then “below-market” team compensation can be alleged as a monopoly extraction (or, depending on theory, a monopsony dynamic affecting team inputs).

2.2 The “benchmark war” risk

Once revenue splits are litigated, every future negotiation risks becoming evidence. Plaintiffs highlighted comparisons (e.g., to Formula 1) to argue teams should receive a materially higher share.  NASCAR’s rebuttal—“not comparable”—may be credible, but the litigation risk remains: courts don’t require a perfect benchmark for a case to survive early stages; they require plausible allegations and some factual basis.

3) Contract formation and bargaining process vulnerabilities

3.1 “Pressure” narratives and procedural optics

A recurring litigation theme in sports antitrust is not merely what the deal says, but how it was presented. Reporting around the dispute described teams challenging a new charter agreement process and refusing to sign, which precipitated the suit. 

From a legal-risk perspective, NASCAR is exposed when plaintiffs can plausibly argue:

Unequal bargaining power was exploited, Terms were offered on an adhesion-like basis, Retaliatory or punitive mechanisms exist for dissenters (real or perceived).

3.2 Retaliation / exclusion theories

If charter allocation, renewal criteria, or enforcement mechanisms can be characterized as tools to punish “non-cooperative” teams, that becomes potent antitrust and sometimes tort fuel—especially when coupled with internal communications. (Trials often surface emails/texts that become reputationally and legally costly.)

4) Vertical integration and “control of the ecosystem”

A key allegation reported in the case is that NASCAR controls multiple layers of the market (series governance plus relationships with tracks and other elements), and that exclusivity or structural control prevents rivals from forming viable competing series. 

This produces three recurring vulnerabilities:

Foreclosure: rivals can’t access tracks/dates or key commercial pathways. Self-preferencing: rules that systematically advantage NASCAR’s preferred economic outcomes over teams’. Collective leverage: bundling of rights and approvals that makes “exit” economically impossible for teams.

Even if NASCAR ultimately wins such arguments on the merits, they can be expensive to litigate and damaging in discovery.

5) Settlement is not a clean reset—why the exposure persists

NASCAR settled the 23XI/Front Row antitrust case during trial in December 2025; public reporting indicates teams regained charters and that the settlement’s full terms were not disclosed. 

Settlement reduces immediate trial risk but can increase longer-run vulnerability because it may be framed externally as:

an implicit concession that change was necessary, or proof that litigation pressure yields economic gains.

That perception can encourage:

copycat suits by other teams or stakeholders, class-style theories (depending on how “similarly situated” parties are defined), and regulator curiosity if broader anticompetitive conduct is alleged (even absent a formal investigation).

6) Practical risk map for NASCAR leadership

6.1 High-probability litigation vectors

Future antitrust claims centered on charter allocation/renewal, revenue splits, and access to premier events.  Contract/consumer protection angles if marketing statements about competitive fairness conflict with internal realities (jurisdiction-dependent). Tortious interference / retaliation claims if any team can plausibly show punitive conduct linked to negotiation posture.

6.2 Most dangerous evidence categories

Internal discussions implying teams have no alternative (“they’ll sign because they must”). Communications tying charter decisions to “loyalty” or public criticism. Modeling that treats teams as cost centers to be squeezed rather than partners—especially if paired with statements about market power.

6.3 Most effective mitigation themes (without conceding liability)

Transparent governance: clearer charter criteria, review/appeal processes, and consistent enforcement. Negotiation process reforms: more time, clearer drafts, documented good-faith bargaining steps. Economic rationale documentation: principled explanations for revenue splits (investment obligations, risk allocation, track economics), to counter “arbitrary extraction” narratives.

7) Strategic conclusion

NASCAR’s charter system and revenue sharing are not merely “business choices”; they are structural restraints that can look either like efficient league governance or like anticompetitive control—depending on facts, documents, and how negotiations are handled. The 23XI/Front Row litigation (and its mid-trial settlement) demonstrates that plaintiffs can credibly litigate these issues at enormous scale, including damages models premised on underpayment. 

The durable vulnerability is this: any model that allocates scarce access and the bulk of economic value through centrally controlled contracts will attract antitrust scrutiny whenever stakeholders believe they are locked in and undercompensated. The most realistic path for NASCAR to reduce repeat litigation is not “winning the argument,” but making the system defensible on process, transparency, and consistent economics.