What does NASCAR appeal hearing mean for Michael Jordan's 23XI Racing future?

Last week was a rough one for Michael Jordan's 23XI Racing, both on and off the track.

The NASCAR Cup Series race at Kansas saw them run four cars for the first time, but they failed to get a single one above 13th as their winless 2025 continues.

That on-track lack of success may pale in comparison to what's coming though, with a panel of three judges hinting that they could reverse a crucial court ruling which has allowed the team to compete despite being in legal conflict with NASCAR.

23XI and Front Row Motorsports have challenged NASCAR in court over the updated charter agreement, which the pair have not signed.

READ MORE: Michael Jordan-owned 23XI team could leave NASCAR MID-SEASON after appeal hearing

What happened to 23XI in court?

Officially, nothing new...yet.

The early signs for the lawsuit were positive in December last year, with a judge granted an injunction ruling that the teams should be allowed to race as charter teams while the case was working through the courts.

However, a three-judge panel heard NASCAR's appeal against that ruling at the US Court of Appeals last Friday, and seemed less than sympathetic to 23XI and FRM's side.

A large part of the judges' questioning of attorney Jeffrey Kessler centered around why the teams should be allowed to both race as chartered teams and sue for damages, implying that it would be more reasonable for them to race as open entries while suing for damages.

The panel's official verdict is expected to be delivered toward the end of the month or in early June, but if they rule in NASCAR's favor then 23XI would be forced to qualify for every Cup Series race. That itself could be delayed, if 23XI and FRM can file a further appeal.

What happens if charter status is stripped from 23XI?

Short answer? Nothing good.

As mentioned above, they'd likely seek to file an appeal to at least tie the matter up in the courts for a little longer and buy themselves some time.

Kessler told the appeal panel last week: "It was found it is not economically viable to have to qualify each week – you may not get in, you lose your sponsors, you lose your drivers. It's in the record that our drivers have contracts. If we are not chartered teams, they can abandon us and go to different teams."

Losing control of the contracts of Bubba Wallace and Tyler Reddick could deal a death blow to the team, with a massive hit to the team's sponsorships and competitiveness.

What does this mean for 23XI's overall lawsuit?

Almost nothing, although it's possible that 23XI losing their charter status and drivers could render much of the long-term lawsuit an afterthought.

The judges did say that 23XI and FRM may well have a viable case at their trial, set to begin in December, but that the case of the injunction is unrelated to the validity of their wider case.

Watch this space.

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