NASCAR Trial Intensifies As Jim France And Richard Childress Testify

After NASCAR Commissioner Steve Phelps was the focus of attention in Tuesday morning’s session of the NASCAR Trail, interest increased dramatically as NASCAR Chairman Jim France and team owner Richard Childress testified in the afternoon session.

The NASCAR Anti-Trust Trial at the Federal Courthouse in Charlotte, North Carolina completed its seventh day on Tuesday, December 9.

France was the final witness called by attorneys for Michael Jordan’s 23XI Racing and Front Row Motorsports. Those race teams have accused NASCAR of being a monopolistic bully that engages in anticompetitive business practices.

Also called Tuesday was Hall of Fame team owner Childress, who testified that he only signed a 2025 revenue-sharing agreement because refusing to do so would have put Richard Childress Racing out of business.

An anti-trust lawsuit was brought by Michael Jordan’s 23XI Racing against NASCAR and Jim France’s family, but the son of NASCAR founder Bill France and the brother of former NASCAR leader Bill France, Jr. remains undeterred in his conviction. France said has not changed his mind on granting teams permanent charters, and evidence showed he entered negotiations on a new revenue-sharing agreement determined to thwart teams’ efforts for a bigger piece of the stock car series’ revenue, according to a report by Jenna Fryer of the Association Press.

“No, I have not,” France responded to attorney Jeffrey Kessler, who represents the plaintiffs in the lawsuit.

According to the AP report, Kessler later introduced a summary of notes from the first meeting of NASCAR executives on how they would approach negotiations with the teams over the new agreements. Steve O’Donnell, now the president of NASCAR, wrote in those notes, “Jim’s overarching comments — we are in a competition. We are going to win.”

Evidence entered in court showed France had received pleas from Hall of Fame team owners Joe Gibbs, Rick Hendrick, Jack Roush and Roger Penske. All four are close personal friends, France said on the stand Tuesday, according to AP.

France confirmed that his salary is around $3.5 million annually and his side of the family owns 54 percent of France Enterprises Inc., which is the holding company of NASCAR (Lesa France Kennedy’s side owns 46 percent),” Adam Stern of Sports Business Journal reported. The France family took in $397 million between 2021 and 2024 to their family trust. NASCAR’s Steve Phelps testified that about 75 percent of that $397 million figure was used to pay taxes. That leaves roughly $99,250,000 leftover to the France Family trust.

Richard Childress Takes The Stand In NASCAR Trial

Earlier Tuesday, Childress said he was pressured to sign the charter agreement.

“I would not have signed those charters if I was financially able to do what I do,” said Childress, a six-time championship winning owner, in his testimony. “We are a blue-collar operation.”

Childress, who has a 60-year relationship in NASCAR and is considered to be friends with the France family, testified that he pleaded with Jim France for the charters to be made permanent instead of renewable, and France refused.

When NASCAR Charters were first introduced in 2016, Childress testified he supported it because at that time, race “were worth 10 cents on the dollar at most. We didn’t have nothing” the AP reported.

The charters added value to his team, but said the equity falls short of its financial potential if the charters were permanent.

Childress was so dissatisfied with the system; he instructed NASCAR attorney Christopher Yates read sentences in which he explains the charters needed to be permanent. He said he added those sentences to a declaration that had been given to him to sign, according to AP.

Childress admitted he accepted the offer in 2024 when Hendrick Motorsports said it was signing and “all I know is financially we would be out of business” if he did not follow suit.

NASCAR Communications Issues Summary From NASCAR Trial

NASCAR Communication issued a summary of the day’s trail at 7:30 p.m. Eastern Time on December 9. In the interest of transparency, here is NASCAR’s summary in its entirety.

“In testimony Tuesday, NASCAR commissioner Steve Phelps shared that working with race teams to reach new Charter agreements for 2025 and completing NASCAR’s media rights agreements were his top priorities for 2023, but the Charter negotiations continued into 2024 because teams would not waiver off of Curtis Polk’s four pillars.

“Phelps went on to testify that the charter system was created in 2016 at the request of race teams and confirmed it has increased race team revenue and enterprise value. In discussing the 2025 Charter agreement, Phelps pointed to multiple benefits for teams:

“More Revenue: teams received significant new revenue that included all of the new media rights money, a 62% increase contract to contract and additional money from tracks and NASCAR to achieve a nearly $100 million increase.

“Improved Governance: replaced the ‘3 strike rule’ (which had only been used once in the 9-year contract term with respect to the Roval which went forward) with a more effective Team Owner Council.

“New Business: NASCAR created a committee to identify, negotiate and collaborate on joint business opportunities with the race teams like the ongoing discussions on parimutuel betting.

“Phelps also discussed the significant financial value of the Charter system to Teams. He noted race car owner and driver BJ McLeod had bought a charter for $3 million and sold it three years later for $40 million, a $37 million increase.

“Phelps testified NASCAR had taken steps to help teams cut costs so they would be more profitable, including homologation of cars and then the design and implementation of the Next Gen car.

“He shared that he supported the idea of a cost cap to help teams become even more profitable, noting it’s positive effect on F1 owner enterprise values.

“Phelps was disappointed that team owners rejected the idea, sharing that ‘nothing would have made teams more profitable or raise their enterprise value more than imposing a cost cap.’

“Phelps testified that the teams’ initial request in the 2025 charter negotiations for $730 million per year in revenue distribution was not feasible and that “the sport would cease to exist at $720 million.” “In the final agreement, all but the Plaintiffs’ teams accepted $431 million per year, up from $333 million in the previous agreement (+29 percent).

With counsel, Phelps walked through the 2025 charter contract negotiation timeline in great detail to underscore that Plaintiffs’ narrative from the beginning of the case of a contract sprung on the teams at the last minute:”

Attached were a first draft shared on December 22, 2023; a second draft on May 28, 2024; a third draft on August 14, 2024, with a September 1, 2024, deadline and a fourth draft on August 30, 2024, that included a September 6 deadline.

Final agreement shared with teams on Sept. 6; one day after race teams legal counsel, Covington, shared feedback for the teams.

“An amendment proposed by the teams’ lawyers at Covington shortly after NASCAR began sending out execution copies of charters, which NASCAR agreed to on Sept. 11, and which resulted in Amendment 1 of the Charter after 23XI and Front Row chose not to sign even after being more time.

“In the end, 32 of 36 charters were signed by 13 of 15 race teams.

“Richard Childress, majority owner of Richard Childress Racing, testified that he would like to see charters made permanent as he wanted to leave a legacy for his family.

Under questioning by defense counsel, he read from a declaration given in October where he stated the charter system is ‘essential to creating enterprise value to teams. It has allowed for team equity to grow. Without charters, team ownership model is unsustainable.’

“Childress acknowledged he has engaged in discussions to sell a portion of RCR and that RCR has had positive EBIDTA for 55 years.

“Earlier, the court heard testimony from Anthony Smith, an accountant whose Charlotte, N.C. based firm, GreerWalker, was hired by the court to assess the finances of 12 race teams (not including the two plaintiff teams) from 2020-2024.

“Smith testified that GreerWalker received the financial information in a secure portal by each team in an anonymized fashion.

“Under questioning by the defense, Brown acknowledged his firm did not audit nor verify the financial information it received from the teams to verify its accuracy.

“He did not know the revenue sources included in the figures; and did not know if the teams had used generally accepted accounting principles (GAAP) in developing the figures they sent to GreerWalker.

“The day began with the conclusion of Plaintiff’s expert Edward Snyder. The defense continued to successfully challenge his benchmark theory, including how the better benchmark would be IndyCar as it races domestically, utilizes similar racetracks to NASCAR schedule, recently launched its own charter system, and other critical business similarities. He also shared why he erroneously used 2019 vs. 2022 to set his multiplier.”

That is NASCAR’s summary in its entirety.

The NASCAR Trial enters its eighth day at 8:30 a.m. Eastern Time Wednesday, December 9 with Jim France returning to the stand.