Michael Jordan took the stand on Friday afternoon in the Western District of North Carolina to close out the first week of the 23XI Racing and Front Row Motorsports v NASCAR antitrust lawsuit trial to much fanfare.
Jordan, who co-owns 23XI Racing with Cup Series driver Denny Hamlin and longtime business associate Curtis Polk, are suing NASCAR and CEO Jim France and the 15-month process reached the trial phase this week.
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As a refresher, the court has determined that NASCAR is a monopsony, or in layman’s terms, a buyer’s monopoly. The Sanctioning Body is the only purchaser of premier Stock Car racing teams in the market and the question for the jury is whether or not that market power was used to hurt competition and depress the earnings of race teams during the charter extension negotiation period.
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Basically, 23XI and Front Row allege that they would have earned more revenue from NASCAR if not for anticompetitive behavior from France that also took on the form of preventing competition from emerging in the marketplace.
Ultimately, 13 of 15 teams in the Cup Series signed the charter extension after over two years of contentious negotiating but the team owned by Hamlin and Jordan did not, alongside FRM owner Bob Jenkins.
“Someone had to step forward to challenge NASCAR,” Jordan said during his testimony.
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Much of his one hour on the witness stand made the case that NASCAR should be operated more like the National Basketball Association, where he made his claim to fame, in which the league and teams split revenue closer to 50 percent but also share growth responsibilities more evenly.
“If you share responsibility, the healthiness of the sport can grow,” Jordan said. “It needed to be looked at from a whole different perspective. That’s why we’re here.”
The rebuttal from NASCAR, which was made in court on Friday from defense attorney Lawrence Buterman, is that NASCAR is privately-owned by the France family and is not a stick-and-ball league in which the teams effectively own the sport.
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Jordan told Buterman that such privately owned sports ventures are ‘rarely successful.’
And yet, Jordan bought into Hamlin’s vision, and even put up the most money to launch what was originally called ‘Michael Jordan Motorsports with Denny Hamlin.’ He is the majority owner and has put $35 to $40 million into the race team.
He did so despite Polk, who has managed many of his affairs for 35 years, telling Jordan that NASCAR was ‘risky to (his) brand and image’ and risked the loss of tens of millions of dollars ‘but you want to do it so I’m doing my best to manage it.’
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To wit, Jordan is a life long NASCAR fan and was entirely bought in to Hamlin’s vision that the NASCAR team could at least make a projected $900,000 profit.
Has the team made a reasonable profit?
“Yes.”
Despite the profits, which Jordan claims is a matter of how professional run the team is while having his star power to lean on, he doesn’t think the charter system as it is currently constructed is fair. Jordan said he entered NASCAR optimistic but found the ‘nature of the business to be unfair’ as he spent more time within its economic model.
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So then, why did Jordan continue to purchase these charters at continually increasing prices? The third charter cost $28 million after the second cost 13.5 and the initial one cost $4.7 million.
“There was a discussion between me and Denny about being successful… people who know me know I like to win and I will pursue anything to win and getting a third charter improves our chance to win the championship.”
Jordan said he was ‘very invested’ in the sport and there were so few charters available and struck while the opportunity persisted itself … even amidst the contentious charter negotiations they ultimately didn’t sign.
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Even in this moment, where his party has sued NASCAR, Jordan believes a refined business model that is an equal partnership would benefit all involved.
“The thing I’m hoping for is you create more of a partnership between two entities,” Jordan said. “If that’s the case, it becomes a more valuable business. If you can ever compromise on the things that matter, you can grow your business.”
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As part of the trial, and the cross examination with Buterman, NASCAR got opportunities to continue to build their case as well.
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Throughout the week, NASCAR has painted Polk as an outsider who came into NASCAR with Jordan and Hamlin with no other interest beyond eventually getting to the point to where 23XI Racing would sue the Sanctioning Body.
It produced discovered documents where Polk expressed that he found races ‘boring as shit’ and painful to watch.’ As Buterman told the jury through his cross-examination, Jordan and Hamlin genuinely love racing but Polk doesn’t.
Therefore, he doesn’t view it in any other way beyond a business opportunity. Buterman asked Jordan if his longtime manager enjoyed racing like the other partners do.
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“Obviously not,” Jordan said.
Buterman presented evidence that showed a text where Polk told Jordan ‘our plan is to be a pest and have a mosquito bite every week,’ during charter negotiations with NASCAR. His plan was to leak financial proposals to the media.
Jordan’s response?
“
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