The first week of the “NASCAR trial” provided some juicy info, but it might soon be looked upon as a mere appetizer as some racing heavyweights are in the bullpen, awaiting a call to the stand.
Michael Jordan, a Week 1 witness, may return to the stand in Judge Kenneth Bell’s Charlotte, N.C. courtroom. But also expected to testify are longtime team owners Roger Penske and Richard Childress, along with NASCAR execs Steve Phelps (former president, current commissioner) and CEO Jim France.
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As happens in antitrust trials like this one — it pits the 23XI and Front Row NASCAR teams against the sanctioning body — several closely held financial details were shoved into public view.
We learned what superstar racer Denny Hamlin earned last year — $14 million for the Joe Gibbs Racing driver, who also co-owns 23XI with Jordan and Jordan’s longtime business associated, Curtis Polk.
We learned that NASCAR reported a combined investment of $68 million for three years of high-profile events at the L.A. Coliseum and the streets of Chicago. Of that payout, $55 million went to securing the Chicago effort, but NASCAR balanced that expenditure by saying it was key to luring Amazon Prime as a new broadcast-rights partner.
Jordan disclosed he’s invested $35-40 million into 23XI. Testimony also provided some details of Jordan fronting Hamlin money for the team purchase and operation — money Hamlin is repaying.
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NASCAR charter system key facet of trial
Denny Hamlin and wife Jordan Fish depart the Charlotte courthouse during Week 1 of the trial.
What we don’t know is the thinking, so far, of the nine-person jury, which will eventually render a verdict on whether or not the teams have proven NASCAR has unfairly monopolized national stock-car racing and therefore prevented competitors from recognizing their full financial capabilities.
NASCAR points to the 2016 creation of 36 “team charters” (a franchise model, of sorts) and its positive effects on the teams’ business models — not to mention the explosive growth in the market value of those charters, now worth tens of millions when available.
Among the biggest hang-ups is the terms of the charter deals. NASCAR wants to continue the current system of making them the length of the current broadcast-rights deal (seven years), while teams want them made permanent. NASCAR has reportedly offered a seven-year “option” following the current terms, but not with the financial guarantees teams want.
Hamlin testified that it costs roughly $20 million per year to field a frontline car for the Cup Series season. He also says he was told by NASCAR that the cost should be closer to $10 million, a number he testified was unreasonable.
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“Cutting is not growth,” he recalled replying during his testimony in Week 1.
Under cross-examination, NASCAR’s attorney pointed to uncovered team communications from the 23XI camp, in which Hamlin’s business partners labeled the driver/owner a “terrible businessman” who “spends money recklessly.” Hamlin shrugged that off as typical disagreements found in any high-stakes business enterprise.
— Email Ken Willis at ken.willis@news-jrnl.com
This article originally appeared on The Daytona Beach News-Journal: NASCAR trial, Week 2 with Roger Penske, Jim France among those on deck
