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Lambasting NASCAR’s motion to dismiss their antitrust case as a “fantasy” rife with mischaracterizations that disguise an “unlawful maintenance of monopoly” as a mere “contractual dispute,” the attorney of Michael Jordan-owned 23XI Racing and Front Row Motorsports filed an opposition memorandum on Monday in response.
The memorandum was signed by Jeffrey Kessler, who famously defeated the NCAA 9-0 at the U.S. Supreme Court in NCAA v. Alston (2021). Kessler, in fact, cites Alston in the memorandum to paint NASCAR as treating race car drivers like the NCAA treats college athletes. Both, Kessler insists, are “monopolists” that pay “sub-competitive prices”—meaning compensation—to the relevant seller of talent (i.e., drivers or college athletes).
As previously detailed, NASCAR’s motion to dismiss belittles the plaintiffs’ case as a “misguided attempt to dress up private business frustrations in antitrust garb.” NASCAR argues Jordan’s group is trying to invent legal arguments that are, in reality, about not getting its way at the bargaining table. NASCAR maintains 23XI Racing and Front Row Motorsports seek business terms that would advantage them over all the teams that signed charters and that the case is largely about exclusivity and noncompete terms that are standard—and legal—in the sports industry.
Not so fast, Kessler appears to tell NASCAR in the memorandum. Kessler maintains that NASCAR, through its Cup Series, “exercises monopsony power” over the proposed market for antitrust scrutiny—premier stock car racing teams—since it has (Kessler argues) a 100% market share.
Kessler acknowledges that 23XI Racing’s and Front Row Motorsports’ rival teams signed charters, which contain waivers of potential antitrust claims. But Kessler maintains those rivals “acquiesced” to NASCAR’s “take-it-or-leave-it demand” rather than making a meaningful choice. Along those lines, Kessler says rival teams were “under duress” since they had “no viable choice” but to sign. NASCAR has repeatedly disputed this characterization, noting how it negotiates with teams on the terms of the charter. NASCAR also points out that charters ensure that every team has the same rights and obligations with none getting preferential treatment.
Kessler also objects to NASCAR arguing that 23XI Racing and Front Row Motorsports are “free to race in any racing league that they desire” and could even “start their own competing league.” The prospect of billionaire Jordan, who Sportico last year estimated has earned $3.3 billion (inflation adjusted) since he joined the NBA in 1984, starting a new racing league is not far-fetched. But Kessler contends that argument misses the point of the cases, which Kessler says is about forcing teams to accept below competitive market terms through monopsony power.
As to exclusivity provisions, while they may be common for the NFL, NBA, WNBA and other sports leagues where “teams are joint venture partners who form a league together” and they employ unionized players, Kessler maintains they are not common for a league “owned by a single family” and with teams that are independent contractors. UFC and the PGA Tour have used those provisions but faced legal challenges over them.
Attorneys for NASCAR and CEO Jim France, who is also a defendant, will have the chance to respond in forthcoming court filings. U.S. District Judge Kenneth D. Bell will review the parties’ dueling points and likely hold a hearing for them to make oral arguments.
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