By Reid Spencer, NASCAR Wire Service
CHARLOTTE, N.C.—Sparks flew in Judge Kenneth D. Bell’s courtroom on Monday after Denny Hamlin took the stand for his second day of testimony in the 23XI Racing and Front Row Motorsports v. NASCAR trial in the Western District of North Carolina courthouse.
In the conclusion of direct examination from Jeanifer Parsigian, Hamlin acknowledged that 23XI Racing, co-owned by Hamlin, former NBA superstar Michael Jordan and Curtis Polk, had turned a profit of more than $2 million in 2022 and more than $3.5 million in 2023.
Hamlin argued that the company’s profits should have been considerably higher than the stated 2.26 percent of revenue if not for what he termed the unfairness of the NASCAR Cup Series charter agreement 23XI signed with NASCAR after the launch of the team in 2021.
“Our costs were not covered,” said Hamlin, who testified that the profitability of the race team was dependent on outside sponsorship.
“I have spent 20 years in this sport trying to make it better and make it grow,” Hamlin added later in his testimony, when discussing 23XI’s decision not to sign the 2025 charter agreement.
“All I know is that we were right and they were wrong, and they needed to be held accountable.”
Under rigorous cross examination from NASCAR outside counsel Lawrence E. Buterman of Latham & Watkins LLP, Hamlin was quizzed about his initial pitch to Jordan for the formation of the race team, where he projected annual profits at $900,000.
Hamlin testified he relied on NASCAR’s projection of 40-perent savings with the advent of the Gen-7 race car, but Buterman pointed out that, in his pretrial deposition, Hamlin stated he had also done his own due diligence before outlining the benefits of the car to Jordan.
Further, Hamlin opined on a podcast with former-NASCAR-racer-turned curmudgeon Kenny Wallace that the Gen-7 car—portrayed in the lawsuit as burdensome to race teams—was actually “a net positive for the sport.”
Hamlin, who earns approximately $14 million per year driving for Joe Gibbs Racing while co-owning 23XI, testily explained that he felt obligated to “paint a rosy picture” of the sport in his public statements to avoid a potential summons to the NASCAR transporter for a tongue lashing.
All told, Buterman stated from discovery that the total investment from the 23XI principals in the race team has amounted to $23.9 million – far lower than the $45 million Hamlin claims to have invested using his own funds. An expert witness 23XI plans to call later in the trial pegged the value of the company at the close of 2024 at $160.2 million.
In texts to his partners introduced into evidence on Tuesday, Hamlin stated that a 10-percent annual profit would be a worthy target.
Yet, Buterman said, 23XI is seeking $205 million in damages for lost potential profit under the 2016 charter agreement, roughly a 900-percent return on investment.
“Do you think that’s fair?” Buterman asked.
Hamlin said he would leave it to the expert to answer.
At one point, Buterman quoted a past comment from Hamlin followed by the question, “Those are your words?”
“And I see what you’re trying to do with them,” Hamlin shot back, drawing a chuckle from Jordan, who was seated behind the plaintiffs’ rows of tables.
Hamlin was on firmer footing after the morning break when questioned on a letter he sent to NASCAR in September 2024 outlining eight conditions that would have to be met before 23XI would sign the 2025 charter agreement.
Hamlin had plausible reasons for each of the conditions, none of which he said were met.
Hamlin’s testimony concluded with one request from Parsigian on re-direct, asking him to read a passage of the letter to NASCAR in which Hamlin said he feared the new agreement would depress the value of charters.
On re-cross, Buterman asked Hamlin whether he was aware that the current value of NASCAR Cup charter was $45 million.
“I only know that we paid $28 million for the last one,” said Hamlin.
All told, 23XI bought three charters for $4.7 million, $13.5 million and $28 million, respectively.
In a day that included only two witnesses, the plaintiffs next called Scott Prime, NASCAR executive vice president of global strategy, who was involved in both the 2016 and 2025 charter negotiations.
On direct examination, the plaintiffs’ lead attorney, Jeffrey Kessler, made a major issue of NASCAR’s exclusive arrangements with race tracks, most notably those owned by Speedway Motorsports, Inc.
Through the introduction of text messages and the questioning of Prime, Kessler also established that there had been disagreement among NASCAR officials about potential provisions in the 2025 charter agreements, with commissioner Steve Phelps and president Steve O’Donnell arguing for more concessions to the teams.
Ultimately, 13 of the 15 chartered teams signed the agreement in 2024. Only 23XI and Front Row did not, choosing to file the antitrust action instead.
