CHARLOTTE, N.C. (AP) — Three-time Daytona 500 champion Denny Hamlin outlined the perilous situation facing NASCAR teams, testifying Tuesday in a federal antitrust trial against the stock car series that the team he co-owns will spend more than $700,000 on the series in 2022 alone and that agreeing to its franchise proposal last fall was like signing its own “death certificate.”
Hamlin is the first witness to testify starting Monday in an antitrust case filed by 23XI Racing, which is owned by Hamlin and Basketball Hall of Famer Michael Jordan, and Front Row Motorsports, which is owned by fast-food franchisee Bob Jenkins. Both teams believe NASCAR is a monopoly that shackles teams with a win-win revenue model.
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Hamlin returned to the booth and was asked about the items in 23XI Racing’s budget. He noted that three years ago NASCAR spent more than $703,000 on expenses including entry fees, team member credentials to enter the track and even access to Internet signals. He also said that he and Jordan spent $100 million building the 23XI, and “as soon as one sponsor leaves, all our profits disappear.”
For more than two years, all 15 NASCAR teams have been outspoken that the last franchise agreement left them unprofitable, demanding four changes in lengthy negotiations. When NASCAR issued a final offer that lacked most of what the teams were asking for, 23XI and Front Row refused to sign and instead filed a lawsuit.
23XI was profitable in all but one of its five seasons, but much of its financial success was due to Jordan’s star power attracting top sponsors. Plaintiffs’ attorney Jeffery Kessler told jurors Monday that a study commissioned by NASCAR found that 75% of teams will lose money in 2024.
Hamlin testified that the TV deal NASCAR signed ahead of the 2025 season did not benefit the team as sponsors turned to streaming and big-ticket sponsors wanted to be on TV. He also pointed to a meeting with NASCAR president Jim France, who said teams were spending too much and should only spend $10 million per car. Hamlin testified it cost $20 million.
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“We can’t cut any more. Tell me how do I get my investment back? He doesn’t have an answer,” Hamlin said.
As for refusing to sign a charter deal last fall, Hamlin said NASCAR’s last-ditch proposal had “at least eight things that needed to change. When we pointed that out, we were told ‘negotiations are over.'”
“I didn’t sign because I knew it was a death certificate for my future,” he said, later adding: “As a driver and as a team owner I have spent the last five years trying to make the sport grow. 23XI is doing our part. You can’t let people treat you unfairly like this and I know it’s not right. They are wrong and someone needs to be held accountable.”
Under cross-examination, Hamlin was asked why he painted a rosy picture of NASCAR on his podcast. He responded that he was parroting NASCAR talking points because any negative comments could lead to retaliation.
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“You can take all of my stuff out of context and paint a picture that everything is fine,” he said. “The reality is, I was negatively affected by the (technical inspection) aspect, I was called in to the Teamsters, and NASCAR didn’t like what I said.”
The trial is expected to last two weeks.
NASCAR is owned and operated by the Florida-based France family, which founded the series in 1948. Kessler said nearly $400 million was paid to France’s family trust over three years, and a 2023 Goldman Sachs review found NASCAR was worth $5 billion. The pretrial discovery process showed NASCAR made more than $100 million in 2024, while Jenkins testified in a deposition that he had lost $60 million over the past decade and $100 million since forming the team in 2004.
NASCAR claims it did nothing wrong and did not restrict its team’s trade or commerce. The original franchises were given to teams for free when the system was created in 2016, and demand for the franchises created a $1.5 billion market for equity in franchised organizations, the series said.
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Hamlin countered that 11 of the original 19 charter organizations had gone out of business; all three of 23XI’s charters were from teams that ceased operations. NASCAR also said guaranteed annual revenue per charter car will now increase from $9 million to $12.5 million. Hamlin testified that it costs $20 million to bring a car to the track for all 38 races, a figure that does not include any overhead, operating costs or driver salaries.
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