When Michael Jordan and Denny Hamlin launched 23XI Racing in 2020, they set out to bring fresh energy and diversity to NASCAR’s top series. The team’s name, a nod to Jordan’s legendary jersey number and Hamlin’s iconic car, quickly became synonymous with ambition and innovation. From its debut, 23XI Racing has grown into a powerhouse, fielding three full-time cars and challenging the sport’s established giants. However, 23XI’s journey, as we know, has hit a legal roadblock.

The team, along with Front Row Motorsports, filed an antitrust lawsuit against NASCAR in 2024 over charter agreements and alleged anti-competitive practices. After a preliminary injunction allowed them to keep racing as chartered entries, a recent court ruling overturned that decision. Now, the future of 23XI Racing is uncertain—could this rising team soon be forced to race as an open team, fighting for a spot on the grid each week? The answer may reshape not just 23XI’s season, but the entire landscape of NASCAR.

NASCAR legal battle threatens 23XI’s future

The future of 23XI Racing is suddenly looking shaky after a major legal twist. In December 2024, U.S. District Court Judge Kenneth Bell gave 23XI and Front Row Motorsports a temporary win, allowing them to hang onto their charters despite not signing the latest charter agreement with NASCAR. This move marked a turning point in the case, giving Jordan and Co. the upper hand. But NASCAR wasn’t having it.

They appealed the verdict, and now the U.S. Court of Appeals has flipped the script. In a big win for the sanctioning body, the court threw out the injunction, asking: How can these teams keep reaping the benefits of a system they’re trying to tear down? With no solid legal precedent backing the teams’ argument, things just got a whole lot more uncertain.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” Jeffrey Kessler, the attorney representing the teams, said in a statement. “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,” he further added.

When asked about the possibility of racing as an open team by Bob Pockrass, 23XI Racing’s Tyler Reddick was guarded: “I don’t have to comment on that, Bob. He’ll just have to talk to the legal team.” Bubba Wallace was similarly cautious. “You know the answer already. You can let Denny [Hamlin] comment on that stuff. You’re not going to get an answer that you want to hear from us.”

Tyler Reddick and Bubba Wallace’s silence is deafening, but it also makes sense. Both drivers have contracts with 23XI Racing that include specific clauses allowing them to leave the team if it cannot provide them with a chartered car for the season. Reddick and Wallace, last year, had even threatened to leave 23XI without charter arrangements.

Todd Gilliland, the #34 driver for Front Row Motorsports, reinforced this perspective: “There’s really not much I can do, right? I’m part of the race team, and yeah, we’re just, yeah, focused on letting those guys do their job; us do our job, to be honest.” While their comments don’t give much away, it’s understandable, as anything they say can and will be used against them in a court of law, but 23XI and FRM still have a chance to salvage this.

The new ruling will not take effect for two weeks, giving 23XI and FRM time to file an appeal. If the decision stands, both teams will lose their charter status for the remainder of the 2025 season (and further). This means they would have to compete as open teams, as they face the uncertainty of qualifying for each race without the guaranteed entry and financial benefits that charters provide, and the financial implications of losing charter status are severe.

Charters guarantee teams a share of NASCAR’s lucrative broadcasting deal revenue. Reports don’t disclose sources, but the annual revenue generated by a charter is pegged at around $8 to $9 million. Plus, estimates suggest that each charter is worth between $10 million and $50 million when sold. Open teams, by contrast, receive substantially less. It is often just a fraction of the purse for each race, and there is no guaranteed share of broadcasting deal revenue.

Despite all this off-track chaos, 23XI Racing showed up strong at Michigan. Driving for Joe Gibbs Racing, 23XI co-owner Denny Hamlin took the win, while #23 Bubba Wallace backed it up with an impressive P4 finish. Defending Michigan winner Tyler Reddick came home 13th, while Riley Herbst landed 25th. Legal battles aside, the team’s performance on the track did plenty of talking.

As the saga unfolds, all eyes are on the courts and on Denny Hamlin. Will the team that redefined modern NASCAR now be forced to fight for its place on the grid each week?

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Denny Hamlin stands firm: 23XI Racing will race on

As uncertainty swirls around 23XI Racing’s future in the NASCAR Cup Series, co-owner Denny Hamlin has stepped forward to allay fears and reaffirm the team’s commitment to competition in 2025. With the possibility of losing their charter looming after a recent court ruling, Hamlin made it clear. 23XI will not back down.

“Same as what we said in December is that we’re committed to run this season open if we have to, even before they decided on the injunction,” Hamlin stated on Saturday, referencing the team’s earlier resolve during the legal battle over the charter system. His comments were made following a strong third-place qualifying effort at Michigan International Speedway.

He further emphasized the team’s unwavering presence on the grid. “So we’re going to race and fulfill all of our commitments no matter what,” Hamlin affirmed. “We’re here to race. Our team is going to be here for the long haul and we’re confident of that,” he said about the team’s future.When pressed about the risk of losing star drivers Tyler Reddick, Bubba Wallace, and Riley Herbst should the team lose its charter status, Hamlin responded candidly, “I’ve got so much to worry about. I’m not focused on that particularly right this second.”

His response shows where the team’s head is at. They’re keeping things steady and making sure the wheels don’t fall off. It also quietly nods to a bigger problem. How do you keep top-tier drivers when there’s no guaranteed spot on the grid? Still, Hamlin’s steady hand and drive to compete suggest one thing. 23XI isn’t backing down anytime soon. They’re in this fight, and they’re in it to stay.