On Monday, NASCAR Cup driver and 23XI Racing co-owner Denny Hamlin testified in federal court in Charlotte, North Carolina, as part of an antitrust lawsuit filed against the sanctioning body. The case centers on claims that NASCAR is engaging in anti-competitive practices and underpaying teams for charters.
Key Takeaways
- Denny Hamlin testified that it costs $20 million annually to put a car on the track, which does not cover additional expenses like sponsor activation and human resources.
- The team has an $8 million annual service agreement with Joe Gibbs Racing (JGR), allowing 23XI Racing to operate with only 140 employees.
- Hamlin stated that in 2020, the team paid $4.7 million for its first Charter and $13.5 million for a second Charter in 2021.
Denny Hamlin began his testimony by criticizing NASCAR’s Charter system as unfair due to high costs not being covered by revenues generated from putting cars on the track. He mentioned that it costs approximately $20 million annually just to field a car, which does not cover other expenses such as sponsor activation and human resources.
Hamlin also detailed financial challenges faced by 23XI Racing, including an $8 million annual service agreement with Joe Gibbs Racing (JGR). This agreement provides essential services that enable the team to operate efficiently with only 140 employees. Despite these agreements, Hamlin stated that the costs associated with purchasing charters are prohibitive.
During his testimony, Hamlin provided specific figures regarding Charter purchases. In 2020, the team paid $4.7 million for its first Charter after acquiring it from Germain Racing when the latter lost a sponsor to NASCAR. The following year, 23XI Racing bought its second Charter from StarCom Racing at a cost of $13.5 million.
Hamlin’s testimony is part of an ongoing antitrust trial where 23XI Racing and Front Row Motorsports are suing NASCAR for allegedly engaging in anti-competitive practices and paying teams below market value. While Hamlin was sequestered, Michael Jordan, the majority owner of 23XI Racing, was allowed to stay in court as a witness.
Frequently Asked Questions
What is the cost for a NASCAR team to put a car on the track annually?
The annual cost for a NASCAR team to field a car is approximately $20 million, according to Denny Hamlin’s testimony.
How much does 23XI Racing pay Joe Gibbs Racing annually under their service agreement?
23XI Racing pays an annual fee of $8 million to Joe Gibbs Racing for services that allow the team to operate with only 140 employees.
The antitrust trial continues as NASCAR CEO Jim France and NASCAR executive Lesa France Kennedy are scheduled to testify. The case highlights growing concerns among teams about the financial sustainability of participating in NASCAR’s Charter system.
