The NASCAR lawsuit’s basis was financial. After 23XI Racing and Front Row Motorsports refused to sign the charter deal in October 2024, they decided to go nuclear. Michael Jordan and Co. filed the lawsuit, claiming NASCAR indulged in ‘monopolistic practices’ with exclusivity clauses in its premier stock car racing series. And the second week of the lawsuit’s trial shed light on precisely that – with NASCAR’s defense showering attacks on a key witness.

Michael Jordan’s scholar witness gets a rebuttal

“NASCAR has started trying to chip away at the testimony of team expert Edward Snyder, with Larry Buterman suggesting Snyder incorrectly told the jury that F1 doesn’t have non-compete clauses with teams and incorrectly said that NASCAR started paying tracks for exclusivity in ’16,” journalist Adam Stern wrote on X. “@NASCAR lawyer Larry Buterman has spent the afternoon trying to get team expert economist Edward Snyder to admit that comparing NASCAR to F1 is offbase, that he didn’t prepare thoroughly and that he’s not enough of an expert on teams or tracks to form the basis of his testimony.”

Dr. Edward Snyder, the former dean of business schools at Yale University, the University of Chicago, and the University of Virginia, took the witness stand on Monday morning. He made a case for Michael Jordan and Co. by exposing financial truths. Using a complex formula, Snyder came up with the damages owed to 23XI and FRM – $364.7 million. While sharing this figure, he also claimed that if NASCAR paid $300 million more to each team per year, the sport might go bankrupt.

Snyder also talked about a 45% revenue sharing that he alleged Formula 1 gives to its teams in his calculation. The economist found that NASCAR’s revenue-sharing model, when its charter system began in 2016, gave only 25% to the teams. In contention, NASCAR’s own two experts took serious issue with the findings of Michael Jordan’s witness. Snyder has previously testified in more than 30 cases, including “Deflategate” involving the NFL’s New England Patriots.

Among his claims, Snyder also pointed to NASCAR’s control over the three elements of the sport: racetracks, race teams, and race cars. And he shed light on how NASCAR has taken steps to “reduce the likelihood and viability of entry” from a competitor series, which thus caused financial harm to the teams beyond 23XI Racing and Front Row Motorsports.

“To me, as an economist, this situation bothers me,” Snyder said of the car usage restriction. “Team owners are building the car. They technically own the car, and it’s their most important piece of equipment. But they cannot use it outside of NASCAR. That’s anti-competitive.”

With Michael Jordan’s scholar witness heating up the case, another witness also added fuel.

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The chance for a breakaway series

In his testimony, Dr. Edward Snyder noted one internal NASCAR document listing strategy options to combat a potential breakaway league. Not only did the sport lack a ‘pay the teams more’ option, but it also sealed such a possibility for a rival league. Also on the witness stand on Monday was Jonathan Marshall, executive director of the Race Team Alliance, a consortium of the 13 charter-holding teams. He spoke about the group examining starting up a rival racing series called the United States Racing League.

However, soon after the charter system’s introduction in 2016, NASCAR had started buying up racetracks. So, a lack of high-quality tracks that weren’t already locked into exclusivity agreements with NASCAR posed a major challenge to the RTA’s aspirations. Marshall said starting a rival series was deemed a way to create leverage amid the chaotic negotiations leading to the 2024 charter deal. This was part of the evidence presented to the jury last week about NASCAR’s exclusivity agreements.

Evidently, the NASCAR lawsuit is picking up in intensity. Let’s wait and see what unfolds in the following days.