Edward Snyder, an economics professor who worked in the Justice Department’s antitrust division and has testified in more than 30 cases, including “Deflategate” involving the NFL’s New England Patriots, testified Monday. He gave three specific reasons why NASCAR is a monopoly that engages in anti-competitive business practices.
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Using a complex formula applied to profits, a reduction in market revenue and lost revenue for 23XI Racing and Front Row Motorsports from 2021-24, Snyder calculated the amount of damages owed. Snyder applied in his calculations a 45% revenue sharing that, he alleges, Formula 1 grants to its teams; Snyder found that NASCAR’s revenue sharing model when it started its charter system in 2016 gave only 25% to the teams.
The lawsuit concerns the 2025 charter agreement, which was presented to teams on a Friday in September 2024 with a same-day deadline to sign the 112-page document. The charter offer came after more than two years of bitter negotiations between NASCAR and its teams, who called the deal “a take-it-or-leave-it ultimatum” that they signed with “a gun to their head.”
A contract is similar to the franchise model in other sports, but in NASCAR it guarantees 36 team spots in the 40-car field, as well as specific revenue.
Jordan and three-time Daytona 500 winner Denny Hamlin for 23XI, along with Front Row Motorsports and owner Bob Jenkins, were the only two teams out of 15 to reject the new charter agreement.
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Snyder’s evaluations found that NASCAR was in fact violating antitrust laws in that the privately owned racing series controls all negotiations because “teams have nowhere else to sell their services.” Snyder said NASCAR controls “the tracks, the teams and the cars.”
Snyder repeatedly cited exclusivity agreements NASCAR entered into with racetracks after the charter system began. The agreements prevent tracks that host NASCAR from holding events with rival racing series. Before long-term agreements, NASCAR operated on one-year contracts with its host racetracks.
The Florida-based French family founded NASCAR in 1948 and, along with Speedway Motorsports, owns nearly all of the tracks on the main Cup schedule. Snyder’s belief is that NASCAR entered into exclusivity agreements with tracks to avoid any threat of a breakaway startup series. In doing so, he said it eliminated teams’ ability to race stock cars elsewhere, forced them to accept revenue-sharing deals that are below market value and hurt their overall evaluations.
Snyder did his calculations for both teams based on each having two charters (each bought a third contract at the end of 2024) and found that 23XI is owed $215.8 million, while Front Row is owed $148.9 million. By his calculations, Snyder determined that NASCAR reduced 36 licensed teams by $1.06 billion between 2021 and 2024.
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Snyder noted that NASCAR had $2.2 billion in assets, an equity value of $5 billion and an investment-grade credit rating, which Snyder believes positions the France family to be able to pivot and adapt to any threat from a rival series in the same way the PGA did in response to the LIV golf league. The PGA, Snyder testified, “got creative” in generating new revenue to pay its golfers and prevent their defections.
Snyder also testified that NASCAR made $250 million in annual profits between 2021 and 2024 and that the France family received $400 million in distributions during that period.
NASCAR maintains that Snyder’s estimates are wrong, that the 45% F1 model he used is incorrect, and its own two experts “seriously disagree” with Snyder’s findings. Defense attorney Lawrence Buterman asked Snyder for his opinion on NASCAR’s upcoming experts and Snyder said they were two of the best economists in the world.
Snyder testified for almost the entire session on Monday – the sixth day of the trial – and will continue on Tuesday. The snail’s pace has agitated U.S. District Judge Kenneth Bell, who heard arguments 30 minutes early Monday morning because he was upset that objections had been filed at 2:55 a.m. and then at 6:50 a.m.
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He needed an hour to read the rulings and the testimony resumed 30 minutes late. As the day concluded, he asked the nine-person jury if they were willing to serve an extra hour each day the rest of the week in an effort to avoid a third full week of trial. They all said that all motions must be submitted before 10 pm each night in the future.
Bell wants plaintiff attorney Jeffrey Kessler to wrap up his case by the end of Tuesday, but Kessler told him he still plans to call NASCAR President Jim France, NASCAR Commissioner Steve Phelps and Hall of Fame team owner Richard Childress, who was the subject of derogatory text messages among NASCAR leaders and has said he is considering legal action.
NASCAR has a list of 16 potential witnesses and Bell said he wanted the first to take the stand before Tuesday’s session concludes.