Could 23XI Racing proceed with a legal battle against NASCAR? Exploring possible outcomes in Michael Jordan's team’s next steps in charter conflict

The NASCAR fraternity has been shaken up by the charter dispute between NASCAR and Cup Series teams. Denny Hamlin and Michael Jordan's 23XI Racing is one of two teams that have not complied with NASCAR's Charter agreement deadline. With neither party wanting to back off, the dispute has reached its tipping point and reports indicate that Jordan's team could move towards a legal proceeding against NASCAR. Is that possible though, and what are the implications surrounding it? Let's delve deeper into it.

NASCAR is all set to bring a new Charter deal for all teams from 2025. However, 23XI and Front Row Motorsport have not signed on to the new deal's terms, and as things stand, there could be a legal faceoff between the two parties.

The Huntersville-based team said they did not get a fair bargaining opportunity regarding the Charter deal. This came after the governing body agreed on a $7.7 billion-worth broadcasting deal last November with various broadcast companies. NASCAR did not offer any significant raise to Cup Series teams' compensation.

Rumor has it that Jordan, Hamlin and Curtis Polk are taking a calculated approach to go against NASCAR, which could have far-reaching consequences. These could include significant chages in sports law as well as changes in the overall regulatory landscape in the sport.

Additionally, a report says Michael Jordan's 23XI Racing could lose up to $100 million due to the Charter dispute. On this, an article in The Athletic said,

"Could it be that the actual leverage in this case is dragging NASCAR to court? Such a move could cause a protracted legal battle, but it could force NASCAR to open its books and reveal the finances of what has been a closely-guarded family business.”

23XI Racing and Front Row Motorsport's decision to stay out means at least six Charters are available for next year: two each from the two aforementioned teams, and two from Stewart-Haas Racing. 23XI and FRM were reportedly interested in grabbing two charters after SHR got dissolved at the end of this season.

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NASCAR insider on 23XI Racing's standoff with NASCAR

Team 23xi team of Michael Jordan, Denny Hamlin and Tyler Reddick after winning the regular season championship Source: Getty Images

NASCAR experts Jeff Gluck and Jordan Bianchi recently shared their take on 23XI's possibilities of initiating legal proceedings against NASCAR, in an episode of The Teardown.

Gluck said,

“If they [23XI] think, ‘Hey, we can drag NASCAR into court and either get a settlement from this or get NASCAR to make the concessions we’ve been asking for, or take it all the way and change the model of the sport, essentially. Maybe that’s what they’re trying to do, and they feel like they’re trying to do it for the other teams as well."

"It’s a very, you know, I didn’t think it would get to this point, but now for the first time I’m seeing, this could be a long, long protracted battle if this does not come to a head. Because it’s not like, I just always thought, ‘Okay December 31st, they have to do it because they’re not going to want to lose their charters, they’re not going to want to let all this stuff go.’ Maybe they’re willing to walk the plank and see what happens? I don’t know, is that possible?”

As of now, the situation involving 23XI Racing and Front Row Motorsport on the one hand, and NASCAR on the other, is deadlocked.

NASCAR has yet to comment on the situation regarding the two teams.