What Happens if 23XI and Front Row Motorsports Lose Their NASCAR Charters?

The high-stakes drama surrounding NASCAR’s charter system in the NASCAR lawsuit has reached a boiling point. In a legal battle that could reshape the Cup Series landscape, 23XI Racing and Front Row Motorsports are fighting to keep their coveted charters after NASCAR denied their renewals. With the recent court ruling, 23XI and FRM could lose their charter status as early as three weeks from now. The U.S. Court of Appeals’ decision is set to take effect seven days after the 14-day period allotted for filing a rehearing request, unless such a request is made and subsequently denied.

This unprecedented showdown raises urgent questions. What happens if two major teams are forced to race without charters? How would it impact their future, the driver market, and the sport’s competitive balance? As the appeal process unfolds, the entire NASCAR world watches, bracing for consequences that could ripple far beyond the courtroom.

The beginning of bad times for 23XI and FRM

The NASCAR charter system, introduced in 2016, was designed to bring stability and long-term value to Cup Series teams. Charters guarantee entry into every race and a share of the purse, making them the backbone of a team’s business model. With only 36 charters available, they are highly coveted assets and often compared to sports franchises in other leagues.

In 2025, a new charter agreement came into effect, but not all teams signed on. 23XI Racing and Front Row Motorsports (FRM) refused to sign the deal, arguing that the proposed terms were unfair and disproportionately favored NASCAR. Their refusal prompted NASCAR to withhold charter renewals, triggering the legal standoff that has now escalated into a full-blown courtroom battle. As of December 2024, an injunction was put forth in the NASCAR lawsuit.

The injunction practically changed everything. Judge Kenneth D. Bell’s ruling allowed both teams to race as chartered entries while the lawsuit played out. This gave them access to the benefits of the charter system. This included guaranteed grid spots, higher payouts, and the ability to purchase additional charters from the defunct Stewart-Haas Racing. For months, 23XI and FRM operated as if nothing had changed. They fielded three full-time cars each and enjoyed the stability that comes with charter status. But the legal tide turned sharply in June 2025.

Is the worst yet to come for 23XI and FRM in the NASCAR lawsuit?

The U.S. Court of Appeals overturned the injunction, siding with NASCAR, which might pave the way for the teams to lose their charters. They challenged attorney Jeffrey Kessler on why teams should benefit from the charter system while suing NASCAR over it. They noted the lack of legal precedent, stating the antitrust argument made by 23XI and FRM “is not supported by any case we are aware of,” weakening their claim.

The NASCAR lawsuit ruling won’t be in effect for two weeks. This gives 23XI and FRM a substantial amount of time to appeal. However, if it stands, both teams will lose their charter status and must compete as open teams for the rest of the 2025 season, without guaranteed entry or the benefits of a charter.

This means they must qualify for each race on speed, with no guaranteed spot on the grid. While most races this year have not seen more than 40 cars attempt to qualify, the lack of a charter strips teams of business certainty and guaranteed revenue. But, most importantly, it affects the ability to attract sponsors with the promise of full-season participation.

The value of the teams would drop, as charters are now seen as essential assets, akin to a franchise license in stick-and-ball sports. Sponsorship negotiations would become tougher, as partners want assurance that their branding will be seen every week. For 23XI and FRM, losing their charters could also force tough decisions about their future in NASCAR.

They might downsize, merge, or even exit the series if the financial model becomes unsustainable. The driver market would also feel the ripple effects. For instance, Bubba Wallace and Tyler Reddick, both drivers for 23XI Racing, could face uncertainty regarding their full-season participation.

Without charter guarantees, attracting and retaining top-tier drivers becomes more challenging, potentially leading them to consider opportunities with more stable teams. The broader competitive landscape could shift, with fewer full-time teams and more uncertainty for race weekends.

Reacting to the setback in the NASCAR lawsuit, team attorney Jeffrey Kessler said, “We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”

With the trial set for December, all eyes now turn to the final months of the 2025 season. Will 23XI and FRM find a legal lifeline? Or is this the beginning of a major shift in NASCAR’s team structure? The road ahead looks bumpy, and time is running out.

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