The young 23XI Racing team, co-owned by basketball icon Michael Jordan and NASCAR veteran Denny Hamlin, is at the forefront of the ongoing debate over NASCAR’s charter system. The team recently disclosed that NASCAR has imposed a strict deadline for teams to sign new charter agreements for the 2025 to 2031 seasons. Teams that don’t sign by the deadline risk losing their charters. Despite this pressure, 23XI Racing has chosen not to comply.
The team sent a letter to NASCAR stating that their Toyota team would not agree to the extension. This announcement came just before the start of the NASCAR playoffs, leading to speculation in the garage that only two Cup Series teams, including 23XI and Bob Jenkins’ Front Row Motorsports, have yet to sign the new deal.
Are 23XI and Front Row Motorsports accusing NASCAR of unfair practices?
Teams are seeking a larger share of the TV rights deal, reportedly worth $7.7 billion, which covers the period from 2025 to 2031 and includes FOX, NBC, Amazon, Warner Bros., TNT Sports, and CW for the Xfinity Series. The original arrangement allocated 25 percent of the TV revenue to the teams through the race purse, with NASCAR receiving 10 percent and the tracks—many of which NASCAR owns—getting 65 percent.
According to FOX Sports, the revised deal, which covers 35-40 percent, also sacrifices rights in other revenue-generating areas such as ancillary media rights, driver appearances, and charter sales. This seven-year agreement includes an option for another seven years.
Although teams, especially the smaller ones, had requested a permanent charter agreement, their demands were only partially addressed. Many teams eventually agreed to the terms under pressure. “They put a gun to our head, and we had to sign. It is what it is. We move forward,” one team owner told The Athletic.
This situation sparked backlash from 23XI Racing. We are David against Goliath; NASCAR has disproportionate bargaining power and undue influence over the sport and the charter process.”
Until their concerns are addressed, 23XI Racing will not sign the new deal. Polk noted that while other teams may have felt pressured to sign under duress, 23XI believes the terms are detrimental to their operations and intellectual property rights.
Jenkins of Front Row Motorsports echoed similar concerns. “I don’t fault those who signed, but many were uncomfortable and felt obligated.”
Jenkins, like Hamlin, has highlighted the high costs of running a racing team. Hamlin has argued that NASCAR should provide $18 million per team per week to cover operational expenses, making the competition more equitable, especially for newer and smaller teams. Hamlin, with his experience as a team owner, understands the financial strain involved and asserts that this figure is based on careful calculation.
FOX Sports’ Bob Pockrass reported that Jenkins has likely invested significant personal funds into the sport, with losses potentially amounting to millions, due to inadequate sponsorship coverage.
The future remains uncertain for teams that refuse to sign. It is unclear whether NASCAR will reclaim and resell the charters or hold them in anticipation of a change of heart from the teams. Currently, both 23XI and Front Row Motorsports each hold two charters and expect to acquire one from Stewart-Haas Racing after this season.
