Jordan-owned 23XI Racing under threat as NASCAR win huge legal ruling

NASCAR has won a key appeal in its ongoing legal battle against 23XI Racing and Front Row Motorsports.

The U.S. Court of Appeals overturned an injunction which forced NASCAR to allow the two teams race as charter entries while their antitrust fight works its way through the courts, leaving them in a precarious position.

NASCAR will now be weighing up their options, and could well strip both teams of their chartered status for this year. That would deal a massive blow to both teams, forcing all of their cars to qualify for every race as 'open' teams and dramatically reducing their earning power.

Jeffrey Kessler, representing the teams in the case, warned of potentially catastrophic damage to 23XI and FRM when speaking in court last month, saying: "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."

Both teams currently run three full-time chartered entries apiece in the Cup Series, with Tyler Reddick, Bubba Wallace and Riley Herbst driving for 23XI while Noah Gragson, Todd Gilliland and Zane Smith racing for FRM.

A number of those drivers would have suitors if they became available on the open market, with many teams yet to finalize their lineups for 2026 and beyond.

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

23XI attorney: We remain confident in our case

The Athletic have attempted to put an estimation on the financial damage which could be caused by the charters being stripped, claiming 'the teams would lose approximately a combined quarter billion dollars in charter values in addition to the lower race winnings they will now receive.'

The court said on Thursday: “Because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory.

"And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

Kessler also released a statement in response to the ruling, saying: "We are disappointed by today's ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1.

"We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct."

It's unclear whether 23XI and FRM will appeal this week's decision.

READ MORE: Kyle Busch gets major NASCAR boost as multiple stars demoted after Nashville

Related

NASCAR Cup Series

Jeff Gordon issues statement as Hendrick Motorsports announce NEW multi-year NASCAR partnership

• Today 15:00

NASCAR

23XI Racing star opens up on infamous Hocevar wreck

• Today 14:00