Teams could gain $1.5M each if 23XI, FRM charter request denied, NASCAR letter says
If 23XI Racing and Front Row Motorsports don’t get their desired outcome in court this week, it’ll mean a lot of money for Cup Series teams, NASCAR says — to the tune of $1.5 million per charter.
In a letter obtained by The Charlotte Observer, NASCAR commissioner Steve Phelps directly addressed the 13 Cup Series teams that signed the charter agreement that went into effect at the beginning of the 2025 season. The document spelled out how those teams could stand to benefit should 23XI Racing and Front Row Motorsports — which declined to sign the current charter agreement and thereafter sued NASCAR on the grounds that it is a monopoly — be forced to race as “open cars” for the rest of the year.
Among the ways the current chartered teams could stand to benefit, Phelps wrote, was that each currently chartered team will receive “an average additional payment of approximately $1.5 million per charter.” This is what NASCAR expects will happen, at least, should the two Cup teams that NASCAR is in litigation with not be granted the preliminary injunction request they’re seeking and be forced to return the money earned as chartered teams early in the 2025 season.
NASCAR has said in multiple filings amid this antitrust lawsuit that it will reallocate any money received from 23XI and Front Row Motorsports to “the teams that signed a 2025 charter.” The sanctioning body even appears to include the money totals in NASCAR’s 34-page filing from Aug. 18 — but those totals are redacted.
The letter, however, reveals the exact dollar amount teams could potentially receive.
When reached by The Observer, legal representation for 23XI Racing and Front Row Motorsports wrote in a statement that they are aware of the commissioner’s recent correspondence.
“My clients are aware of the letter and its contents,” stated 23XI Racing and Front Row Motorsports attorney Jeffrey Kessler. “This letter is yet another tactic by NASCAR to divide the teams and distract from the facts of their monopolistic practices.
“23XI and Front Row Motorsports are pursuing this lawsuit to change the sport of NASCAR for the benefit of all drivers, fans, sponsors and teams, and believe the teams have much more to gain in the long run by growing the sport for everyone.”
The teams’ legal representation did not provide additional comment, specifically to an Observer question about whether or not they would return the money to NASCAR should their preliminary injunction request be denied.
How did NASCAR land on $1.5 million figure?
That $1.5 million figure mentioned in Phelps’ letter to the teams is the sum of two parts, Phelps wrote.
The first part deals with the amount of money NASCAR paid 23XI and FRM for the first 20 races of the season, of which they maintained charter status. The commissioner disclosed that NASCAR paid the two teams $25,146,300 in “fixed owner’s payments and performance payments.” Once that money gets redistributed to the 30 charters not belonging to 23XI or FRM, the letter says, each chartered car/team will receive $838,210.
The second part deals with how much money the teams will receive if the teams fail to have their charter status restored for the rest of the 2025 season — which will be decided this week, according to what district judge Kenneth Bell said in a hearing on Thursday. If the teams’ preliminary injunction request is denied, each chartered team will receive approximately $670,000.
A team that competes with open cars makes much less than chartered teams. According to a report from FOX Sports’ Bob Pockrass, open teams receive typically 20-30% of what a team normally would get on any individual race weekend.
How 23XI Racing, NASCAR got to this point
23XI Racing, owned by sports icon Michael Jordan and Cup star Denny Hamlin, and Front Row Motorsports filed an antitrust lawsuit in a Charlotte court in October that stated that NASCAR was a monopoly. The entities sued the motorsport sanctioning body after declining to sign the charter agreement that NASCAR made available to teams to sign in September.
Owning a charter has several advantages for the teams. Chartered Cup Series teams have guaranteed entry into every race; they get a percentage of each race’s purse; and they reap other benefits, which include receiving a certain amount of money from NASCAR’s media revenue.
By declining to sign the charter agreement in September, 23XI Racing and Front Row Motorsports — both of which race three Cup cars full-time — were no longer the beneficiaries of the charter system. However, a week after filing the October lawsuit, the two teams filed a motion for a preliminary injunction to allow them to race in 2025 as chartered teams while the lawsuit proceeds.
In other words, the teams wanted to have the protections and benefits a chartered team has while the lawsuit went on — explaining, among many reasons, that they had a high likelihood of success based on the merits of the case and that if they had to run as “open” teams in the interim, they’d endure “irreparable harm.”
The teams’ first preliminary injunction request was denied. But the teams filed a renewed motion for preliminary injunction in late November, and that preliminary injunction was granted. Teams then ran as chartered members for the first 20 races of the season — from the Daytona 500 through the Sonoma race — and collected the accompanying benefits.
Then, in July, the U.S. Court of Appeals for the Fourth Circuit reversed an earlier injunction and forced teams to run as open teams; the teams responded by filing a temporary restraining order and another preliminary injunction, arguing that they should be granted charter status for the same reasons as before.
That all led to Thursday’s hearing, an acrimonious battle in which internal messages on both sides regarding the lawsuit were revealed. District Judge Kenneth Bell reportedly encouraged both sides to settle on the preliminary injunction matter prior to ruling next week.
And before the hearing Thursday, the letter was sent out.
“This litigation continues to be a cloud over the season, which is unfortunate,” Phelps concluded in the letter. “We want the teams, drivers and growth of our sport to be the focus especially in a crowded sports landscape competing for fans, sponsors and media dollars. We thank you for helping to keep the focus on the positive things happening in the NASCAR Cup Series, and we thank you for your partnership.”
This story was originally published September 2, 2025 at 1:12 PM with the headline "Teams could gain $1.5M each if 23XI, FRM charter request denied, NASCAR letter says."
