Due to the recent antitrust battle between Michael Jordan and NASCAR, curiosity has been forming around the ongoing situation and its details, with the public left wanting more information.
Over the course of last year, team 23XI Racing, co-owned by Jordan and driver Denny Hamlin, joined forces with Front Row Motorsports and filed a lawsuit against NASCAR for their monopolistic business approach involving their new charter agreement, whether it’s cars, car parts, or race roads, they profit off of everything. In contrast, the teams that bring them revenue can’t break even.
With the recent legal filings and internal communications during the suit, Jordan’s project no longer feels like a passion project, but rather a strategic, high-stakes business model created to build on MJ’s already enormous wealth.
Court filings have revealed major details on how Jordan and Hamlin fund 23XI. It appears that Jordan made some bold financial moves regarding his NASCAR team, proving that to be part of the top-level Cup Series, you need to have very deep pockets.
According to motorsports reporter Bob Pockrass, Jordan reportedly put up 60 percent of the cost for one of the charters that were purchased from Stewart-Haas Racing, while Hamlin covered the remaining 40 percent.
Moreover, for the team’s headquarters, “Airspeed”, Jordan and Hamlin are 50-50 partners. It has been established that MJ fronted the money to Hamlin, with him repaying Jordan back on a monthly basis. With that, Jordan lent the team money to deal with legal fees related to the lawsuit.
23XI Racing’s business model is very clear: they’re investing in infrastructure and legal standing long term, not just racing. Because Jordan and his team don’t accept the new charter agreement, their business model is in serious jeopardy due to the “open” charter status being high-risk and less profitable.
Last year, the court granted a preliminary injunction that allowed 23XI to maintain charter status during the ruling. However, more recently, the same injunction was vacated by a U.S. appeals court, putting the team’s charter status at risk and raising the threat that they may be required to race as an open team.
If that isn’t bad enough, it appears that there is some friction between Hamlin and other 23XI’s executives, due to Hamlin feeling undervalued when financial decisions are questioned, which can lead to further complicating both business and legal strategies.
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On the other hand, NASCAR has pushed back and rejected 23XI Racing’s accusations, stating that Jordan and his team are seeking a charter that no one else is pursuing and that they have significantly increased payments to teams under the new charter system.
