An economist has testified in the ongoing antitrust lawsuit against NASCAR, involving Michael Jordan’s 23XI Racing and Front Row Motorsports. According to his calculations, NASCAR owes a combined total of US$364.7 million in damages to both teams. The allegations stem from a disputed revenue-sharing model, which the teams argue is a result of NASCAR’s monopolistic practices.
Edward Snyder’s Testimony
Edward Snyder, a distinguished economist with experience in the U.S. Department of Justice’s antitrust division, was the expert who testified. His experience includes more than 30 cases, with notable ones like the “Deflategate” involving the NFL’s New England Patriots.
Three key reasons were presented by Snyder to substantiate the claim that NASCAR is a monopoly engaging in anticompetitive practices. He employed a complex formula, factoring in profits, a dip in market revenue, and lost revenue to 23XI Racing and Front Row Motorsports from 2021-24, to arrive at the damages owed.
Revenue Sharing Contention
Snyder’s calculations were based on the premise that Formula 1 gives 45% of revenue sharing to its teams. He stated that NASCAR’s revenue-sharing model, which was introduced with its charter system in 2016, only allocated 25% to the teams.
The crux of the lawsuit is the 2025 charter agreement. The agreement, which guarantees 36 teams spots in the 40-car field along with specific revenue, was presented to teams in September 2024 with a same-day deadline to sign the 112-page document. Many have called this agreement a “take-it-or-leave-it” ultimatum.
Teams’ Resistance
Michael Jordan and three-time Daytona 500 winner Denny Hamlin for 23XI, along with Front Row Motorsports and owner Bob Jenkins, were the only two teams out of 15 to resist the new charter agreement. They argue that the privately owned racing series controls all bargaining, leaving teams with no option to sell their services elsewhere.
Snyder cited NASCAR’s exclusivity agreements with racetracks as one of the indicators of its monopolistic behavior. These agreements prevent tracks that host NASCAR events from hosting races with rival series, effectively eliminating teams’ ability to race stock cars elsewhere.
Financial Implications
Based on Snyder’s calculations, 23XI is owed US$215.8 million while Front Row is owed US$148.9 million. He found that NASCAR shorted 36 chartered teams US$1.06 billion from 2021-24.
Snyder also noted that NASCAR had US$2.2 billion in assets and an equity value of US$5 billion. He believes this financial strength positions the France family, who founded NASCAR in 1948, to be able to pivot and adjust to any threats of a rival series.
NASCAR’s Defence
Conversely, NASCAR contends that Snyder’s estimations are erroneous. It disputes the 45% F1 model he used and has expressed concerns about Snyder’s findings. The trial continues with further testimonies expected from NASCAR chairman Jim France, NASCAR commissioner Steve Phelps, and Hall of Fame team owner Richard Childress.
