A federal judge in Charlotte, North Carolina, denied a request by NASCAR teams 23XI Racing, co-owned by NBA legend Michael Jordan, and Front Row Motorsports, to gain charter status as they proceed with an antitrust lawsuit against NASCAR and its chairman, Jim France.

U.S. District Court Judge Frank Whitney issued his ruling on Friday, aligning with NASCAR’s annual “State of the Sport” address taking place at Phoenix Raceway.

The lawsuit comes amid tensions over NASCAR’s charter agreements, which were presented to teams in September.

NBA legend Michael Jordan and fellow team owners are challenging NASCAR in federal court over its restrictive charter system, which they argue limits team independence and competition. A ruling is expected Friday, just as NASCAR’s championship weekend begins. pic.twitter.com/CJJvwMSwM3

— The Associated Press (@AP) November 7, 2024

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Both 23XI Racing and Front Row Motorsports opted not to sign the updated charter deals, accusing NASCAR of monopolistic practices.

The charter agreements establish revenue-sharing and other protections for participating teams, but 23XI and Front Row rejected the terms, claiming NASCAR acted as “monopolistic bullies” with a “take-it-or-leave-it” approach that left teams with few options.

This decision came just before the playoffs, following two years of negotiations between NASCAR and its teams.

NASCAR’s response was swift: it rescinded the charter extension offers to 23XI and Front Row.

Without chartered status, these teams lose several advantages, including guaranteed spots in the starting lineup for each race and an equal share of revenue.

For now, 23XI and Front Row must operate as “open” teams, competing for fewer resources and lacking the security that chartered teams enjoy.

Jeffrey Kessler, a leading antitrust attorney representing the plaintiffs, expressed confidence in challenging the decision, stating that the teams could appeal the ruling.

Kessler also requested that the court exempt 23XI and Front Row from the charter’s prohibition on suing NASCAR while the antitrust case is active.

He argued that NASCAR’s new charter agreements, effective 2025, would prevent teams from bringing legal action against NASCAR—a clause he believes would unfairly impact the teams’ right to pursue the lawsuit.

The timing of the ruling is notable, as it was issued just hours before NASCAR’s championship weekend kicked off at Phoenix Raceway.

Among the four contenders in Sunday’s championship race is Tyler Reddick, a driver for 23XI Racing, underscoring the team’s significance in the sport.

The lawsuit highlights broader issues surrounding NASCAR’s charter system, which some teams view as a restrictive arrangement that limits fair competition and access to revenue.

The charter system, introduced in 2016, offers stability for teams through revenue-sharing and guarantees of starting positions but also limits teams from challenging the organization on legal grounds.

This legal battle could reshape the financial landscape of NASCAR if the plaintiffs succeed in challenging the charter system’s terms and the restrictions it places on teams.

For now, both 23XI Racing and Front Row Motorsports are focused on continuing operations through the end of their current agreements while seeking judicial relief to maintain equal footing with chartered teams as the lawsuit progresses.