Michael Jordan’s leap from basketball icon to NASCAR team owner has been a game-changer for the sport. Since launching 23XI Racing with Denny Hamlin in 2020, Jordan has driven the team to multiple victories, with drivers like Bubba Wallace and Tyler Reddick shining on the track. His presence has not only boosted NASCAR’s visibility but also drawn new fans and sponsors.

Yet, the business side of racing is proving to be a high-stakes arena, where financial stability can be as elusive as a checkered flag. Back in 2009, during the Great Recession, NASCAR team owners pushed for better revenue sharing. A fight that led to the charter system’s creation in 2016.

This system promised teams guaranteed race entries and a slice of the sport’s revenue, offering a lifeline for owners like Jordan. Today, that system is under fire, with legal battles threatening to reshape NASCAR’s landscape. According to Jenna Fryer, these disputes could cost Jordan and his partners millions, but what’s driving this high-octane drama? Let’s dive in.

Legal battle over charters threatens Michael Jordan’s NASCAR team

In a bold move that has sent shockwaves through the NASCAR community, 23XI Racing, co-owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports, led by Bob Jenkins, have taken legal action against NASCAR, alleging antitrust violations tied to the charter system. The teams are seeking a temporary restraining order and preliminary injunction to ensure they remain chartered organizations for the remainder of the 2025 season, arguing that NASCAR’s actions threaten their very survival in the sport.

As Jenna Fryer of The Associated Press, writes, “The case is winding its way through the court system but now with urgency: The teams are set to lose their charters Wednesday and in the latest filing, they allege NASCAR has indicated it will immediately begin the process of selling the six tags that guarantee entry into every race as well as monetary rewards and other benefits.”

The charter system, introduced in 2016, guarantees teams’ entry into every Cup Series race and a portion of the revenue. A model inspired by franchise systems in other sports. Losing these charters would force drivers to qualify for races based on speed, reduce their share of race purses, and potentially require refunds of prize money earned from the first 20 races of the 2025 season. According to Fryer’s article, such a loss could cost teams like 23XI million, not only in immediate revenue but also in long-term stability and market value.

“Today we filed a motion… to protect the teams’ ability to race chartered for the remainder of the 2025 Cup Series season,” said Jeffery Kessler, the attorney representing 23XI and Front Row, emphasizing the urgency of their fight. The roots of this conflict trace back to September 2024, when both teams rejected NASCAR’s final proposal on charter extensions, citing concerns over fairness and competitiveness. Following this rejection, they filed an antitrust lawsuit, claiming that NASCAR’s practices stifle competition and harm team operations.

But NASCAR has pushed back hard, accusing 23XI and Front Row of filing “a third motion for another unnecessary and inappropriate preliminary injunction” and claiming it has made multiple attempts to resolve the dispute without receiving counterproposals from the teams. This legal tug-of-war highlights a growing divide between NASCAR and some of its most prominent teams over the charter system. Once a symbol of stability, now a battleground.

Introduction of the charter system, which was a response to team owners’ demands for greater financial security after years of economic uncertainty. That system, initially hailed as a game-changer, is now under scrutiny as teams like 23XI fight to protect their investments. For Michael Jordan, whose personal brand and financial commitment are deeply tied to 23XI Racing’s success, this lawsuit is a high-stakes gamble.

The outcome could determine whether his team continues to thrive or faces a costly setback. As the case progresses, the NASCAR community is watching closely. The decision could set a precedent for how charters are managed, potentially reshaping team ownership dynamics for years to come.

Parallel battles: Legacy and RWR’s charter dispute

While 23XI and Front Row Motorsports take on NASCAR, another legal skirmish is unfolding that underscores the broader tensions within the sport. Legacy Motor Club, co-owned by seven-time Cup Series champion Jimmie Johnson, and Rick Ware Racing (RWR) are locked in a dispute over a charter lease agreement for the 2026 season. The conflict hinges on conflicting claims about the lease’s duration. Legacy asserts that RWR agreed to lease them a charter for 2026, but RWR has a conflicting contract with RFK Racing for the same charter, creating a legal standoff.

Complicating matters is the impending sale of RWR to T.J. Puchyr, which could shift the dynamics of this dispute. A judge has warned RWR of potential contempt charges, signaling the court’s serious view of the matter. For Jimmie Johnson, who transitioned from racing to team ownership, this conflict adds another layer of complexity to his return to NASCAR. His involvement brings a sense of gravitas, given his storied career and seven championships, which tie him with legends like Richard Petty and Dale Earnhardt.

This parallel dispute, alongside the main lawsuit, illustrates the intricate web of agreements that govern NASCAR’s charter system. RFK Racing, a prominent team with its own ambitions, finds itself entangled due to its contract with RWR, showing how one team’s decisions can ripple across the sport. As these legal battles unfold, they highlight the challenges of maintaining stability in a system designed to protect teams, but now fraught with uncertainty. The NASCAR community awaits resolutions that could redefine the sports business landscape.