Denny Hamlin Raises Concerns on NASCAR Charter Deal's Impact on 23XI Racing

Post by : Mina Rahman

Denny Hamlin, a three-time Daytona 500 champion, highlighted significant financial challenges that NASCAR teams are encountering during a federal antitrust trial against the racing association. As co-owner of 23XI Racing alongside Michael Jordan, Hamlin disclosed that his team incurred expenses exceeding $700,000 in NASCAR fees in 2022, labeling the proposed charter plan as a potential “death certificate” for his organization.

During his testimony lasting over three hours, Hamlin detailed the budgetary demands faced by his team, encompassing entry fees, track access, credentials, and Internet service costs. He emphasized that launching 23XI necessitated an investment of $100 million, highlighting that losing a single sponsor could erase any profits.

The lawsuit brought forth by 23XI Racing together with Front Row Motorsports claims that NASCAR functions as a monopoly, enforcing a financial model that renders profitability almost unattainable. Hamlin pointed out a study commissioned by NASCAR revealing that 75% of teams operated at a loss in 2024. He also noted that recent television deals have failed to provide advantages to teams, particularly as many sponsors prefer conventional TV over streaming options.

Hamlin shared that discussions with NASCAR's leadership, including chairman Jim France, indicated a suggestion that teams maintain spending at $10 million per car—half of the $20 million he asserts is necessary to compete for a full season. When the latest charter agreement did not resolve crucial concerns, 23XI opted not to sign.

“I chose not to sign because I recognized this would jeopardize our future,” stated Hamlin. “23XI is fulfilling our responsibilities, but you can’t allow others to treat you so inequitably, and I felt it was wrong. They must be made accountable.”

In cross-examination, Hamlin disclosed that his favorable public comments regarding NASCAR are often prewritten to prevent backlash, such as stricter inspections or penalties.

The trial also revealed that NASCAR reportedly generated over $100 million in 2024 and is valued at $5 billion, based on a financial assessment from 2023. NASCAR contends that it has not constrained trade, asserting that chartered teams now earn guaranteed revenues of $12.5 million annually, a sum significantly lower than the $20 million Hamlin claims is necessary to operate one car.

23XI’s statements underscore the growing discord between NASCAR’s traditional business framework and the economic realities faced by modern race teams, potentially influencing the direction of stock car racing.