Fiery Testimony From 23XI’s Denny Hamlin In Day 2 Of NASCAR Trial

The second day of the NASCAR Anti-Trust Trial in Federal Court in Charlotte, North Carolina included 23XI co-owner Denny Hamlin saying signing the NASCAR Charter Agreement would have been like signing his own “death certificate.” Also, NASCAR Senior Vice President and Chief Strategy Officer Scott Prime compared how LIV Golf disrupted golf and NASCAR was fearful of the same happening to stock car racing.

At times, the cross-examination was “contentious” according to the Associated Press.

Two NASCAR teams including 23XI co-owned by former NBA legend Michael Jordan and Denny Hamlin, and Front Row Motorsports are suing NASCAR over monopolistic practices and violation of anti-trust laws.

Tuesday’s Trial Testimony Begins With Denny Hamlin On The Stand

Hamlin spent a second day on the stand, including more than three hours on Tuesday, December 2. During the testimony, Hamlin revealed he makes approximately $14 million a year from Joe Gibbs Racing and emphasized how his co-ownership in 23XI Racing is an investment into the future of NASCAR.

According to The AP, Hamlin testified he is the 40 percent owner of 23XI and has invested $45 million into the team. During cross examination, Hamlin testified he has put in more than $10 million and the rest are though loans.

Hamlin and Jordan created 23XI Racing in 2021 and he projected a $900,000 profit in the first year. The team made more than $3 million in 2023 and built a $35 million shop that opened in 2024. NASCAR attorneys contended the budget for the shop was $9 million to $10 million and the team’s spending was “egregious”, according to the AP. Hamlin said the original budget was “pre-COVID” and did not include everything inside the facility.

NASCAR’s Cross-Examination

During cross-examination, NASCAR attorney Lawrence Buterman asked why 23XI Racing wanted $205 million in damages when emails showed a 10 percent return on investment. Buterman also said Hamlin told Jordan that the NASCAR Charter System and its Next Gen car made it a great time to invest in NASCAR but now claim it is part of NASCAR’s monopoly.

Hamlin and his attorney compared the charters to renting an apartment because both expire. Buterman fired back believing it was an unfair comparison because a home that is being rented can’t be sold by the renter, but the holder of a NASCAR charter can sell it.

Other major details that were revealed so far in court includes Hamlin saying it costs $20 million to run one race car per season. NASCAR CEO Jim France has said it should cost only $10 million a year, according to The AP.

Hamlin testified that he had a meeting with NASCAR Chairman Jim France and was told the teams are spending too much money and it should cost $10 million, not $20 million per year.

“We cannot cut more. Tell me how to get my investment back? He had no answer,” Hamlin said.

Also, $100 million is how much Hamlin said he and Jordan have spent on 23XI Racing since September 2020. During the pretrial discovery process, NASCAR made $100 million in 2024. That is also the amount Front Row Motorsports has lost since starting a NASCAR team in 2004, according to team owner Bob Jenkins, the other plaintiff in this lawsuit.

In 2023, Goldman Sachs evaluated NASCAR value at $5 billion, according to 23XI attorney Jeffrey Kessler.

NASCAR’s Prime Testimony

Scott Prime is NASCAR’s Executive Vice President and Chief Strategy Officer. He took the stand on Tuesday and was grilled by Kessler, according to Bob Pockrass of FOX Sports.

The plaintiffs believe NASCAR actions such as enforcing tracks with “exclusivity agreements, underpaying teams and putting intellectual property patents on its race teams to make them unusable elsewhere.”

Hamlin also testified that $703,000 three years ago was spent on costs to NASCAR ranging from entry fees, credentials for team members to enter the track and even access to Internet signals.

“All it takes is one sponsor to go away and all our profit is gone,” Hamlin said.

Background To The Charter Agreement And How It Led To a Trial

All 15 of NASCAR’s teams had been vocal for over two years that the last charter agreement made it impossible for them to turn a profit, and they demanded four changes in prolonged negotiations. When the final offer came from NASCAR and lacked most of what the teams asked for, 23XI and Front Row refused to sign and instead sued.

Ironically, 23XI has turned a profit in all but one of its five seasons, but much of that financial success is largely a product of Jordan’s star power drawing big-time sponsors. Kessler told the jury Monday that a NASCAR-commissioned study found that 75 percent of teams lost money in 2024.

Hamlin testified that the TV deal NASCAR signed ahead of the 2025 season has not been a boon to race teams because of a shift toward streaming services and big-ticket sponsors want to be on television.

NASCAR Charters And 23XI’s Technical Alliance With JGR

Other important details include 23XI pays Joe Gibbs Racing $8 million a year for its technical alliance and 23XI employs 140 people. The partnership with fellow Toyota team JGR includes putting the bodies on the car and other crucial information.

Hamlin testified that 23XI Racing has paid a total of $46.2 million for three successive NASCAR Cup Series Charters. Those Charters are now in limbo as 23XI did not sign the Charter Agreement in 2024.

Hamlin stressed the last proposal from NASCAR “had eight points minimum that needed to be changed. When we pointed that out, we were told ‘Negotiations are closed.’

“I didn’t sign because I knew this was my death certificate for the future,” he said, later adding: “I have spent 20 years trying to make this sport grow as a driver and for the last five years as a team owner. 23XI is doing our part. You can’t have someone treat you this unfairly and I knew It wasn’t right. They were wrong and someone needed to be held accountable.”

Hamlin’s Fear Of Retribution

Under cross-examination, Hamlin was asked why he portrayed NASCAR in a positive manner on podcast appearances. He replied he repeated NASCAR talking points because any negative comments can lead to retribution.

“You can take all my things out of context and paint a picture that everything is fine,” Hamlin said. “The reality is, (being) negative affects me in (technical inspection), getting called to the hauler, NASCAR not liking what I said.”

NASCAR Statement On Day 2

NASCAR released the following statement at 6:30 p.m. Eastern Time on Tuesday, December 2. Below is the statement in its entirety:

“Today’s testimony confirmed that 23XI Racing purchased from another team a Charter, Denny Hamlin signed it agreeing to all of its contractual terms, got paid every penny due under the 2016 Charter – and now they want to claim they should receive a 900 percent return for supposed damages under the 2016 Charter.

“Most of the testimony focused on the two-and-a-half-year negotiation over the 2025 Charter which 23XI and Front Row Motorsports did not sign. They made a choice to forfeit their Charters instead of signing them as 32 Charter holders did.

“The 2016 agreement was itself a multi-year negotiated agreement that delivered many fundamental wins for race teams, including guaranteed starting position in every race, contractually secured payments of over $300 million a year to teams and a valuable long-term asset they can buy, sell, or lease at will – as Front Row has done on several occasions. 23XI and Front Row both kept buying Charters at ever-increasing prices even though they now say that the 2016 Charters were unfair to the teams.

“Based on witness testimony and exhibits entered into evidence today, several key points about Denny Hamlin and 23XI were revealed:

“23XI has been profitable and the owners continue to do well financially:

“Mr. Hamlin alone is making $14 million by driving for Joe Gibbs Racing.

“Mr. Hamlin and Mr. Jordan are charging their own team $1 million in rent for their $35 million Airspeed facility.

“23XI made profits of approximately $2.5 million in 2022 and $3.4 million in 2023, before the team began paying rent last year for the Airspeed facility owned by Mr. Hamlin and Mr. Jordan and paying legal fees for this litigation.

“23XI spent $28 million to acquire a third charter in 2024 after acquiring two charters for $13.5 million (2021) and $4.7 million (2020).

“According to Plaintiffs’ own expert, 23XI was worth at least $160.2 million just four years after it began racing.

“Mr. Hamlin made it clear he ‘took care of his people,’ but 23XI pays its drivers only approximately 22 percent of its revenues even though its counsel pointed out that athletes get paid far more on a percentage basis in other sports.

“Exhibits also showed Mr. Hamlin’s business partners believe he is an elite driver but was a cost control problem for 23XI.

“When Mr. Hamlin pitched Mr. Jordan on building a team, he projected a 10 percent ROI. And now, 23XI’s owners want at least $205 million in damages, a 900 percent return on investment (ROI). His comments on the witness stand show he believes that NASCAR should subsidize their racing operations while they keep all their own sponsorship revenues.

“Mr. Hamlin acknowledged that none of the alleged anticompetitive claims brought in his lawsuit against NASCAR were raised during negotiations for the 2025 charters, including in the 8-point letter that was the subject of much of today’s events.”

The NASCAR Anti-Trust Trial is expected to last for two weeks and will resume on Wednesday, December 3.