By Reid Spencer, NASCAR Wire Service
CHARLOTTE, N.C.—The first phase of the “23XI Racing and Front Row Motorsports v. NASCAR” ended Wednesday after the jury heard from NASCAR chairman and CEO Jim France, the plaintiffs’ final witness after more than seven days of testimonies.
Under questioning on cross-examination from NASCAR outside counsel Chris Yates, France reviewed his history in motorsports and the variety of roles he has played at both International Speedway Corporation and NASCAR, which was founded in 1948 by his father, Bill France Sr.
France said he had learned succinct but valuable lessons from his father and mother, Anne B. France, and has relied on them as guiding principles in his life.
“My mom’s advice was ‘Always pay your bills,’” France testified. “Dad’s advice was ‘Always do what you say you’ll do.’”
Much of France’s testimony dealt with NASCAR Cup Series teams’ desire for permanent charters in the 2025 charter agreement, a major point of emphasis on the part of plaintiffs’ lead counsel Jeffrey Kessler, who had called France as an adverse witness and questioned him on Tuesday afternoon.
France explained that he opposed permanent or “evergreen” charters because of the uncertainty of revenue streams, broadcast agreements and racing schedules.
“I do not have a sightline to the future,” said France, who characterized himself as a consensus builder among NASCAR’s broad array of stakeholders.
France also testified that visits to race shops and his own observation of the “arms race” among teams to develop parts and pieces to find speed ultimately led to the development of the Gen-7 Cup race car, conceived as one of several cost-saving solution for NASCAR’s premier division.
Under aggressive re-direct from Kessler, who challenged France’s effectiveness as a consensus builder, the NASCAR chairman acknowledged that he had started a defense fund many years ago for potential lawsuits that might arise but stated that the fund predated NASCAR’s introduction of the charter system in 2016.
France explained that the fund existed “for any type of litigation that would come along and cause an issue for the sport.”
After concluding his questioning of France, Kessler proclaimed, “At this point, plaintiffs are happy to rest.”
For its first witness, the defense called NASCAR executive vice president and chief racing development officer John Probst, who gave a lengthy account of the development and purpose of the Gen-7 car.
One of the key elements of the case is whether NASCAR’s restriction of the use of the Gen-7 car to NASCAR events constitutes anti-competitive behavior.
Probst explained that NASCAR had spent approximately $14 million to date on the development of the car and had secured an array of patents on what has been referred to in the trial as “IP” or intellectual property.
Defending the proprietary nature of the car, Probst told Kessler under cross-examination that “I cannot think of a situation where Coke would create a new recipe and immediately give it to Pepsi.”
NASCAR executive vice president and chief financial officer Greg Motto followed Probst on the witness stand and clarified an issue that had been raised earlier in the trial—the dividend paid to France family shareholders from NASCAR revenues.
Motto explained that, because NASCAR is an S-Corporation, profits pass through to the individuals and are taxable as personal income. Hence, the vast majority of the dividends paid to NASCAR’s owners go to satisfy tax obligations.
The eighth day of the trial concluded Wednesday afternoon with expert testimony from professor of accounting Mark E. Zmijewski of the University of Chicago, called by the defense to challenge the methodology used by the plaintiffs’ expert, economist Edward A. Snyder, in calculating the extent of damages 23XI and Front Row had suffered during the last four years of the 2016 charter agreement.
Zmijewski testified that Snyder’s use of Formula 1 as a benchmark for calculating the race teams’ value was flawed and that NASCAR would have sustained significant losses had the sanctioning body paid the teams the $627-million annual amount Snyder suggested in his analysis in what he called the “but for world” absent the alleged anti-competitive practices.
The trial resumes Thursday morning. Among witness the defense is expected to call before resting are team owners Rick Hendrick and Roger Penske and 23XI principal Curtis Polk, long-time financial adviser to 23XI co-owner Michael Jordan.
