For the most part, all presentations and counter-presentations, responses and responses regarding the 23XI Racing and Front Row Motorsports vs. NASCAR The complaint and counterclaim make the same points and rebuttals.
At this point, both sides will either reach an agreement as a result of mediation taking place in the same courtroom on Tuesday with Judge Kenneth D. Bell or this dispute will go to the scheduled trial date on December 1.
All of this is to say that much of what appeared Wednesday on 23XI and Front Row’s response to NASCAR’s summary motion ruling is a rehash of arguments that were made before, in the same spirit that NASCAR is also making and redressing the same fundamental claims.
Over the past calendar year, both sides established their legal allegations and supported them with documents and communications, most of which were produced through discovery.
But for the sake of posterity, 23XI and Front Row responded once again with similar arguments as to why Judge Bell should not issue summary judgment against them. A reminder: summary judgment is a decision reached by the court solely on the merits of a dispute without a jury.
The judge has that option, but has indicated to both sides that he is reluctant to make such a ruling on any part of the lawsuit so as not to taint the potential jury in December.
Regardless, the teams argued that 1) NASCAR has the market authority to impose charter agreement terms below market value because they are (allegedly) acting in an anti-competitive manner, 2) that there are no alternatives for Stock Car racing teams to compete because the Sanctioning Body has agreements that prevent tracks from having similar events, and 3) the NextGen car cannot be used anywhere else.
The first line of the filing also doesn’t make it seem like 23XI and Front Row are interested in reaching a deal.
“The motion is a meandering combination of mischaracterizations of the plaintiffs’ claims, misstatements of existing antitrust law, and disputed facts that must go to trial. Much of the motion appears to be written exclusively for the press, as NASCAR’s attorneys surely know that the arguments they are making are not a basis for granting summary judgment. Auto racing is a sport, but the Litigation is not. “NASCAR’s tired retread of arguments this The court has repeatedly rejected should be quickly eliminated.”
Newly revealed texts
As part of the presentation, the teams also produced text messages obtained through discovery between then-NASCAR COO Steve O’Donnell, who is now the league’s president, and NASCAR director of racing development Ben Kennedy.
This is from a text exchange on June 23, 2022 in response to seeing the PGA Golf market under siege from LIV Golf.
O’Donnell: “I just watched Monahan’s press conference. I don’t ever want to see you in that position. We need to lock ourselves in a room and make a war game out of this. The future of the sport is at stake and we have to assume, unfortunately, that 30 out of 36 drivers will leave us and all the owners will leave us. If that were the case, what would we do? If we don’t want that to be the case, what should we do and what do we think is really fair? The Pga seems silly, right? now. The equivalent would be if this happened to us and in a week you held a press conference and said: we have added five international races and we will give the teams 80% of the purse in the future.
I think we are exposed to a few possibilities: private equity that doesn’t care about a short-term return, Saudi Arabia, or some other entity that doesn’t care at all whether the business model makes sense.
Midweek series on short tracks run by teams with new cars
International business done by teams from November through January essentially spanning our entire international future portfolio Private equity purchase of (Speedway Motorsports)
There is more. Bottom line: My eyes were opened by the PGA and the teams. There is zero loyalty. We have to assume that no one gives a shit, they don’t care.
So I think next week you’ll be calling an external site with Prime, Rich, Herbst, Clark, Probst. Whoever you trust the most. They talk about it and they’re fired.
Blank sheet of paper and we analyze all the possible scenarios. This is Chicago multiplied by 1,000. Think about all the time we’ve spent in Chicago, or in fact, avoid it. None of that matters if we don’t do it right. A daily working group is needed on this.
I know my job is to provide you with answers. Right now I don’t have the answer as to where they will go, but I am convinced that they will destroy the business. If you’re really losing money and you’re 75, you don’t care about the long term. If you are Michael and Michael’s lawyer, we are just a game; He doesn’t care what happens. Drivers don’t earn enough to stay; If someone came and said, “You’re racing these SRX cars on the next short tracks,” we don’t have a TV deal, but we’ll guarantee you 10 million over the next five years, 20 races, a billion dollars. That’s $3 billion less than what just happened with LIV. It’s a real threat.
So let’s win this. Curtis thinks we’re stupid rednecks. He’s lecturing us about how TV deals work. I want to win and I know you do too. Now it’s personal: we’re against a guy who doesn’t care at all about this sport and he said it: let’s do what we think is right to make this sport successful in the future. Bill France always said that everyone needs to win. Curtis simply thinks the team should win.
What is the best concept for this business to thrive over the next 15 years? What do you want your legacy to be? Let’s win this thing and then go out into the sunset and have great stories to tell about how the so-called rednecks outwitted everyone and positioned the sport for the long term. Okay, good night.
Ben Kennedy: I just read the text and agreed 100% with everything you said (as Jeff Gordon would say).
In all seriousness, think that the external makes a lot of sense and, depending on your point, the scenario represents multiple cases, from best to worst cases, and conduct table sessions for each one. I feel like the other thing we should continue to think about is how to protect ourselves from something like what’s happening to the PGA now and also how to diversify our income. We’re heavily beholden to streaming right now, but there are plenty of opportunities in international sports betting, future NFTs, and more. I think we’re all expecting a big increase in 2025, which is fantastic, but with the media world moving at a rapid pace, what will that or sports consumption in general look like in 2035? No one has the answers, but it feels like we need someone to constantly think about it.
Emails about the next generation
To also illustrate their point about the locked intellectual property of the NextGen car, the teams also produced emails from O’Donnell to senior management about the decision to make a NextGen or convert the previous generation car into a trimmed-down spec version.
From an email:
“We need to say: Moving to the G6* will make all cars obsolete without the ability to introduce a “new car”….Gen7 does the same thing, but at least it has a new look/technology and a longer path to obsolescence/plan.
“As long as teams continue to build their own individual pieces, we will have problems
“Should we also say that introducing the CBF in 2020 against any car change with a limit of 12 million dollars?”
and from another
“Jim France is very much in the fast-moving camp, i.e. 2020. As you’ll see from the platform Prime ships, that doesn’t equate to a ‘next-gen’ car. “We may ultimately be in too dire a situation with equipment to be able to wait and run Gen 7, but that remains to be determined.
“I would like to hear your opinion on the platform and also any observations or input on the direction, timing, brand implications, etc. All opinions are welcome. Thank you.”
They would find themselves in a “too serious situation” due to the imminent negotiations on a charter extension agreement.
As the exception to a NASCAR slide below shows, NASCAR wanted to own the intellectual property of the car, which it does now.
“NASCAR would own this intellectual property for eventual use in all series if desired, with less risk of imitations”
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