‘Redneck, tiny sport’: NASCAR exec answers to internal criticisms at trial

In May 2024, a handful of NASCAR’s most high-ranking officials shared in a private text thread some criticisms about how the stock car racing company was conducting its business.

In August, those messages became publically available.

And on Tuesday – on the second day of the trial that could change NASCAR’s business model and/or alter the sport of American stock car racing – one NASCAR executive had to answer to those messages and whether they affirmed the plaintiffs’ belief that NASCAR represents an unlawful monopoly.

Scott Prime, the executive vice president and chief strategy officer at NASCAR, took the witness stand Tuesday afternoon in U.S. District Court for the Western District of North Carolina in Uptown Charlotte. Over the course of nearly three hours, he was interrogated by lead plaintiff attorney Jeffrey Kessler, who brought up a slew of internal texts and emails that showed a rift between three high-ranking NASCAR officials – commissioner Steve Phelps, president Steve O’Donnell and Prime – and the NASCAR board of directors as to how to approach negotiations ahead of the 2025 charter agreement.

The charter agreement is the catalyst to the lawsuit that was filed in October 2024 – as well as the jury trial that started 14 months later.

Kessler, via his examination of the trial’s second witness, rehashed the text message exchange among the three officials to try to demonstrate how NASCAR’s board was wielding monopsonistic power in the negotiations. The board is chaired by CEO and founding-owning-family-member Jim France.

Kessler called up a messaging chain in which the three officials were venting about the state of the charter negotiations, including the following exchange:

Phelps: “Productive? Insanity. Look at the Amanda (Oliver, Chief Legal Officer) chart – zero wins for the team (or) we are dead in the water – they will sign them but we are f—- moving forward.”

Prime: “The approach of ‘here’s a bit more money, f— off everywhere else is a bold strategy …”

O’Donnell: “And one that (board member) Lesa (France Kennedy) said both Mike (Helton) and Gary (Crotty). Close to a comfortable 1996, f— the teams, dictatorship, motorsport, redneck, southern, tiny sport.”

Kessler asked Prime on the witness stand Tuesday if this reflected a shared frustration among the three of them that they couldn’t get the following belief across: If you don’t meet more in the middle with the teams, you’re not only antagonizing the teams, you’re also limiting NASCAR’s potential for growth.

Prime acknowledged he was frustrated from the meeting and regrets using “inappropriate” language . Prime then said that the board later listened and acquiesced to some of the requests of Phelps, O’Donnell and Prime in the final 2025 charter agreement, the one put in front of teams in September and the one that 13 of 15 teams signed. (Plaintiffs 23XI Racing and Front Row Motorsports were the only two teams that didn’t.)

When Kessler asked specifically in what ways the charter agreement was amended from May 2024 to September 2024, Prime said the language included “significant protections” for the Cup Series teams, which demonstrated the board’s willingness to engage in good-faith negotiations.

Still, as Kessler pointed out and as Prime confirmed, the amendments didn’t include permanent charters, or any of the other primary requests from teams.

Charter negotiations will be focal point of NASCAR trial

The 2025 charter agreement – and the negotiations leading up to the agreement – will be the focal point of the trial.

The NASCAR charter system, essentially, provides a way for NASCAR teams that compete in the premier series (the Cup Series) to be “franchises” that belong to the sport. Having a charter gives teams myriad benefits. Among those benefits: guaranteed entry into each race, and thus guaranteed access for each race’s purse. Teams argue that charters should be permanent – thus making a way for teams to own equity in the sport – whereas NASCAR doesn’t.

It was again Tuesday morning, before Prime testified, when Denny Hamlin finished up his time on the witness stand.

Hamlin is a co-owner of Cup Series team and plaintiff party 23XI Racing. He is also a superstar driver in the series. Hamlin gave an impassioned testimony when questioned by plaintiff attorney Jeanifer Parsigian about how the charter negotiations demonstrated NASCAR was an unlawful monopoly; that teams had no leverage or recourse if they didn’t like the terms of the charter agreement.

Asked why he didn’t sign the charter agreement ahead of 2025, Hamlin said that his three-car team would be out of business in 10 years: “I didn’t sign because I knew this was my death certificate.”

In cross-examination, antitrust defense attorney Lawrence Buterman pressed Hamlin as to why 23XI Racing is seeking $205 million in damages – a figure representing a 900% return for damages under the 2016 charter, since Hamlin has invested $45 million of his own money as of August 2024.

Buterman also reminded Hamlin that 23XI Racing turned a profit in 2022 and 2023 and that, according to the plaintiffs’ own expert, 23XI Racing was worth at least $160.2 million just four years after it began racing.

Hamlin responded to those claims (1) that his race team is “one sponsorship” deal falling-through away from “being in the red everywhere” and (2) that this $160 million figure is only relevant “if you sell it” – but that “I want to be in this sport for a long time.”

Buterman then brought up that Hamlin’s co-owners, in a separate message, said early on in the team’s existence that Hamlin is “a terrible businessman” and that “his is the only position that matters.” Buterman even brought up that Hamlin had asked his co-owners to find a buyer for him so he could exit the team because he isn’t being heard. Hamlin responded that such disagreements are a function of business, and that after early lumps, he and co-owners Michael Jordan and Curtis Polk have been mostly on the same wavelength.

Hamlin closed his trial by being reexamined by his own plaintiff lawyer, in which he read aloud part of the letter that 23XI Racing sent to Phelps once the team decided to not sign the 2025 charter agreement as it was on Sept. 6.

What he read, in part: “These tendered drafts do not adequately protect 23XI’s interests. Consequently, 23XI is faced with a take-it-or-leave-it situation regarding our Charters, despite having invested millions of dollars and thousands of labor hours into them while benefiting the sport of NASCAR since entering the sport.”

Other notes from Day 2 of the NASCAR trial

-Hamlin’s salary as a driver was revealed for the first time Tuesday. He’s making $14 million a year driving for Joe Gibbs Racing, as he confirmed in trial. When asked by the defendant’s counsel if it’s fair to say other drivers don’t make nearly that high of a salary, Hamlin responded: “Other drivers don’t win as many races as I do.”

-In 2021, 23XI Racing spent 17% of its yearly profits on its holiday party, Hamlin confirmed. When asked if Hamlin considered that a sound business decision, Hamlin said: “We take care of our people.” Other Hamlin business decisions were brought to the fore as well by NASCAR legal representation, including why Hamlin and Jordan are charging their own team $1 million in annual rent for their Airspeed facility.

-Hamlin also brought up that NASCAR implemented a provision called the “Driver Incentive Plan,” which provides financial incentive for drivers to do media. Hamlin argued that this diluted the teams’ abilities to utilize drivers as sponsorship drivers for their teams on top of another issue. Hamlin essentially said NASCAR told its Cup teams: “You’re going to help us pay for our marketing program (because the teams are the ones who pay the drivers).” Added Hamlin: “You took our asset, monetized it and now we get nothing.”