Just how much animus Denny Hamlin has towards NASCAR was once again laid bare on Tuesday morning as he completed his examination and cross examination as part of the 23XI Racing and Front Row Motorsports v NASCAR antitrust lawsuit trial.
The cross examination was conducted by NASCAR’s antitrust defense lawyer Lawrence Buterman and their back-and-forth was emotionally charged even while adhering to court decorum.
Advertisement
Hamlin made several references to ‘we are not a monopoly like you are,’ and the way he said ‘you’ was delivered in a way that may as well have gone through Buterman and straight to the France family.
For example, Butterman tried to make an analogy that the contract Riley Herbst signed with 23XI last year, one that prevents Herbst from racing with another team in any other series without permission, as similar to the antitrust claims made against NASCAR over exclusivity provisions.
“We aren’t a monopoly,” Hamlin said. “You are. I believe it’s different when you have options and drivers have options of what teams they can race for.”
Advertisement
Buterman also grilled Hamlin over what percentage of overall team revenue drivers get in their contracts, and how it’s a smaller percentage of revenue than what NASCAR pays of its revenue to teams.
Hamlin responded that it was different because teams incur additional cost, something Buterman took exception to over the costs NASCAR incurs, but the three-time Daytona 500 also called the Sanctioning Body a monopoly again.
“We are not a monopoly like you,” and “drivers have options of where to take their services.”
Advertisement
What about a text message exchange between Hamlin and Jordan where they were discussing signing Corey Heim to a long term contract.
Jordan told Hamlin to ‘lock him up,’ and Buterman asked how this was different than the legal claim that NASCAR is anticompetitive for ‘locking tracks up.’
Read Also:
What happened in Day One of the NASCAR Antitrust trial
The personal frustration with Jim France dates back to a conversation Hamlin had with the NASCAR CEO during the awards banquet event in Nashville back in December 2022 that left him ‘very, very discouraged’ over how differently they saw the financial landscape.
Advertisement
“He told me directly the problem in NASCAR is that teams spend too much money,” recalled Hamlin.
This exchange came in the final moments of his direct friendly examination with attorney Jeanifer Parsigian.
France said teams should be spending 10 $million per car instead of the roughly $20 they were spending at the time of their conversation. Hamlin told France that cutting half of their operating budget just wasn’t realistic.
“Cutting is not growth. I can’t cut my costs in half. It’s not realistic,” Hamlin recalled of his message to France, noting that NASCAR had cut race weekend lengths and practice sessions to that point. “We’ve cut this grass so short that we are down to the dirt.”
Advertisement
Hamlin said that France told him that ‘you are the type of owner that NASCAR wants in the sport’ and not some New York private equity investor but Hamlin said he couldn’t cut anymore and ‘I have invested in you.’
Hamlin said he did not want to be another statistic of a former driving team owner who went out of business.
“He had no answer.”
During cross-examination, Buterman said NASCAR offered teams a positive term in the form of a seven-year agreement with a seven-year extension option, while rejecting permanent charters.
Advertisement
The seven option years have fixed terms, and not a percentage of revenue like the current seven years, and those second seven years could not be negotiated. Hamlin said 23XI wouldn’t be in business if they accepted those terms.
He says that because NASCAR could theoretically earn a much larger broadcast rights deal after 2031, but the option allows them to pay teams ‘no less than what they make now.’
“Well, thank you, I appreciate that,” Hamlin said, dryly.
Advertisement
“You force us to buy all the cars, the components … we don’t own any of that … how ridiculous is that,” Hamlin said back to Buterman.
Buterman also turned attention to Hamlin asking for $105 million in damages, which would be a 900 percent return on his initial $45 million investment into starting 23XI as a 40 percent owner of the team.
Michael Jordan and Curtis Polk own the other 60 percent of the organization.
“We want to be made whole for what you did to us,” Hamlin said, again as if he was speaking through the hired attorney and to the Frances.
Advertisement
It was learned in court that Hamlin makes $14 million a year on his current contract with Joe Gibbs Racing.
When asked why he makes more than most drivers, Hamlin said ‘I am at the top of my game.’
There was also an exchange about the Driver Ambassador Program, which Hamlin said ‘bugs him the most’ as a team owner even though he personally stands to gain from it as a driver.
The DAP, which started this year and is codified in the charter agreement, pays drivers for promoting the sport. But Hamlin argues that it takes away the teams’ greatest assets, their drivers, and has them promoting NASCAR initiatives rather than team initiatives. The teams pay 40 percent of the DAP money.
Advertisement
Hamlin says that NASCAR takes their best marketing asset, uses drivers to sell tickets and pays them for it, and teams get no ROI from that exercise.
Buterman asked if Hamlin didn’t like drivers getting paid.
“We pay drivers, not NASCAR.”
Buterman responded that ‘most drivers don’t have a $14 million salary like you do’ and Hamlin responded that most drivers don’t win the number of races each season that he does.
Read Also:
Everything you need to know about the NASCAR, 23XI and Front Row antitrust trial
Advertisement
NASCAR’s antitrust lawyer worked to paint Hamlin as either an unreliable narrator and/or disingenuous to the facts parallel to the legal claims.
For example, Hamlin appeared on the Kenny Wallace Show, where the former Cup Series driver and television analyst asked about the NextGen car and received generally positive commentary from the three-time Daytona 500 winner about its cost containment potential.
Likewise, Hamlin said on the Netflix special ‘Full Speed’ that the car lowered the barrier to entry for a new team to immediately compete. Hamlin called the car ‘a net positive for the sport’ but is now suing NASCAR in part for how the single source nature of the car is an alleged tool to maintain a monopsony.
Advertisement
“Because if I say anything bad, I get a lashing from NASCAR. So, publicly, it’s all sunshine and rainbows,” Hamlin said. “My job is to take the talking points NASCAR says to me and say them publicly. If it’s anything bad, I get a phone call from NASCAR,” Hamlin said.
Hamlin says he then has to go through the inspection and about NASCAR, ‘you can dictate how I do.’
Buterman then asked how can the jury take what Hamlin says seriously if he sometimes says things he doesn’t really feel.
Advertisement
“That’s nonsense,” he said. “What I do publicly is put out positivity. That’s my job. You guys give me talking points. I say it to make fans feel happy.”
Buterman also brought up previously publicized communications from 23XI executives Gene Mason, Jordan and Polk, with the latter saying Hamlin is a ‘terrible businessman’ who ‘spends money recklessly.’
Hamlin’s response was that 75 percent of teams lost money but 23XI didn’t while competing for wins and championships.
Advertisement
Hamlin said he was not offended at the remarks his partners made about him because ‘it’s their job to keep us in check.’
For example, the AirSpeed facility cost $35 million and Polk objected to that amount but Hamlin also explained why it was ultimately built.
“He didn’t think it was a good idea given how (charter) negotiations were going … we didn’t like the length and terms” … but “that doesn’t mean he disagreed with the vision and that’s why we did it.”
Advertisement
Hamlin says he and Jordan want to win, and that desire to win has a cost, which elicited a head nod from Jordan sitting on the front row.
Buterman also went after Hamlin’s expression to France in the Nashville meeting that he wanted to be in NASCAR long-term through a text message where he expressed to Jordan in August 2023 that he wanted to be bought out of his 23XI ownership.
Hamlin said he was just frustrated at how much decision making power he had at the time, and said he and his fellow leadership team went to a country club and talked it out. He said that sometimes he has to ‘kick and scream’ to get attention on what he wants to do.
Advertisement
He also characterized such disagreements between company leadership as normal in any enterprise. There’s been other disagreements but they always ‘figure it out.’
To read more Motorsport.com articles visit our website.
