CHARLOTTE, N.C. — Some of Jim France’s closest friends in racing begged him for permanent charters, hoping for a better deal as NASCAR’s team owners negotiated with the 81-year-old NASCAR chairman and CEO.
France wouldn’t budge.
Despite heartfelt letters from motorsports titans like Rick Hendrick, Roger Penske, Joe Gibbs and Jack Roush, underlining the need for franchise-like charters to sustain their struggling race teams, France never gave the slightest hint of making a concession, it was revealed Tuesday during the NASCAR antitrust lawsuit in a Charlotte federal court.
“They’re all telling you they need permanent charters — and you said no,” attorney Jeffrey Kessler said.
“We did not do evergreen or permanent charters, no,” France replied.
France, the final witness called by Kessler — who represents Michael Jordan’s 23XI Racing and Front Row Motorsports, the two teams who refused to sign the latest charter deal that is at the heart of this dispute and instead decided to sue NASCAR and France — was set up to give crucial testimony in a trial that had been building to this moment.
France is personally named in the suit, and the plaintiffs have been building a case through witness after witness that France is the ultimate decision-maker who was a “brick wall” despite his executives’ pleadings to find a middle ground with the teams.
Though France claimed he was just “involved in decisions” and said NASCAR’s board “has the ability to override me,” he was unable to name one instance when that happened.
And to be sure, the prevailing perception among teams and NASCAR employees is that France is the person in charge.
France acknowledged he was the person who wanted a Sept. 6, 2024, deadline for the teams to sign the charter agreements or lose them.
“If we didn’t have the charters (signed), we wouldn’t have the charters,” he said. “… I knew we needed to get them signed.”
But France said he remembered little else from the points Kessler raised with him. He did not recall specific meetings, including meetings in which he acknowledged being an active participant.
In several instances, he denied making certain statements to which the jury has already heard testimony and said he could not remember others (though he did not have reason to doubt the accuracy of the testimony, he said).
For example: Joe Gibbs Racing co-owner Heather Gibbs testified Friday that France was cold while speaking to Joe Gibbs in a last-minute call before the charter deadline. She said Gibbs begged France, “Don’t do this to us!” and France responded, “If I wake up and I have (only) 20 charters (signed), I have 20.”
But France said he did not remember Gibbs saying that and claimed he didn’t think he would have made a comment like that to Gibbs in response.
He also said there was nothing upsetting about a heartfelt letter Heather Gibbs sent, which NASCAR president Steve O’Donnell said, in a message to a fellow league executive, drew an angry verbal reaction as France read it aloud. (O’Donnell walked that back in testimony this week, saying he was exaggerating.)
Kessler went paragraph by paragraph of the letter and France said none of it made him angry, and said he also did not recall reading a letter out loud.
He also said he did not remember a 2021 strategy kickoff meeting for the charter negotiation meetings in which O’Donnell wrote in an email to other executives: “Jim’s over-arching comment: WE ARE IN COMPETITION. WE ARE GOING TO WIN.”
France was also unable to recall whether he knew about NASCAR’s $5 billion valuation from Goldman Sachs, had no memory of discussing NASCAR’s exclusive agreements with racetracks, and said he did not know about NASCAR’s revenue or his own exact salary as CEO.
That salary, he said, was in the $3.5 million per year range — on top of “hundreds of millions” of dollars his France family trust has received in the last four years.
France’s side of the family owns 54.4 percent of NASCAR, and his niece Lesa France Kennedy’s side owns 45.3 percent.
France’s testimony is set to conclude Wednesday morning.
Richard Childress: ‘I can’t lose my charters’
Richard Childress, owner of Richard Childress Racing. (Krista Jasso / Getty Images)
Prior to France’s appearance on the witness stand Tuesday afternoon, team owner Richard Childress told the jury how his race team would go broke if it wasn’t for his other successful businesses making enough to pay for his NASCAR losses.
The six-time champion car owner, who used to own Dale Earnhardt’s No. 3, also pleaded with France for permanent charters in a letter and said the lack of them put his team’s future in doubt. Holding a charter guarantees entry into races and certain revenues to owners.
“I would love to see RCR running 60 years from now, but with this model, we can’t do it,” Childress said.
Childress testified he asked France several times in person about the charters becoming permanent or auto-renewing, but said France told him: “We don’t know where the sport is going to be in seven years” regarding the media rights revenue.
Childress said he was pressured into signing the charters on Sept. 6, even though he didn’t want to, because the alternative was going out of business.
“They told us we had until (midnight) or you lose ’em,” Childress said. “Financially, I can’t lose my charters.”
The charter system is a positive for teams, Childress indicated, but the agreement itself is what’s bad in his view. In total, 13 teams signed the agreement, with 23XI and Front Row the only holdouts.
“It’s nothing where it should be compared to the blood, sweat and tears we’ve put into it,” he said. “It’s keeping us alive is all it’s doing right now.”
Childress’ appearance came shortly after inflammatory text messages sent by NASCAR commissioner Steve Phelps were unearthed during the discovery process in advance of the trial. In the text messages, Phelps told another high-level NASCAR executive that Childress should be “taken out back and flogged” and called him a “stupid redneck who owes his entire fortune to NASCAR.” The remarks stemmed from critical comments Childress made about the costs associated with the NASCAR-mandated Next Gen car during a radio interview.
After Phelps’ texts became public, RCR said it was considering legal action. Phelps’ remarks cannot be entered into evidence, the presiding judge, Kenneth D. Bell ruled.
Phelps disputes ‘take-it-or-leave-it’ offer
NASCAR commissioner Steve Phelps. (Jared C. Tilton / Getty Images)
Earlier Tuesday, NASCAR commissioner Steve Phelps denied giving teams a much-discussed take-it-or-leave-it deadline to extend a charter agreement, calling the assertion “unfair” during his testimony.
Phelps had been presented with an email in which he wrote there were “lots of options, but all have the same theme: Pick a date and they can sign or lose their charters. It is that simple.”
“They are playing with fire,” Phelps had written regarding the teams.
But Phelps, the self-described “head negotiator” for the charter deal said it was “absolutely not” true to characterize the Sept. 6, 2024, deadline as a monopolist using its power to bully the teams into signing.
“That is not what happened,” he said.
“We’ll let the jury decide,” Kessler said.
Phelps said NASCAR had made “significant movement” from its earlier drafts of the deal and told the jury he personally had made it known to every team that Sept. 6 would be the deadline one week earlier.
Phelps was asked if it was true France was “very concerned about maintaining power over the teams,” which he denied.
“Should they just trust him to be a benevolent dictator?” Kessler asked. “Is that your view?”
The defense objected, and Phelps was not required to answer.
Otherwise, Phelps repeatedly said he did not remember or recall various moments Kessler tried to flag as central to the issue of whether NASCAR violated antitrust law.
Phelps said he had “no idea” how or why exclusivity clauses were placed into track sanctioning agreements beginning in 2016. He had no recollection of a 2015 email discussing the race teams’ plan to run their own event (something NASCAR strongly discouraged and vowed to fight), nor did he remember seeing an email from Speedway Motorsports owner Marcus Smith, expressing agreement for his track company to “reject other competitor series that may present themselves.”
Phelps also had no memory telling Hendrick, “We wish we could give you permanent charters, but Jim doesn’t want that.”
“I don’t deny doing it, but I don’t remember,” Phelps said.
Nor could he remember receiving an email from an International Speedway Corp. (ISC) executive flagging a 2016 ESPN.com article that unearthed the track exclusivity agreements, or a 2019 email from Roush Fenway Racing pleading for better financial terms from NASCAR.
Phelps also said he did not remember a 2020 meeting of NASCAR’s executive team, which discussed the threat of a series that eventually became known as SRX, short for Superstar Racing Experience.
But Phelps did recall being “concerned” about SRX “right out of the gate” and later texted fellow NASCAR executives that SRX “could turn into LIV if we don’t play our cards right,” a reference to LIV Golf, a breakaway circuit from the PGA Tour.
“Need to put a knife in this trash series,” he wrote in a later text.
Phelps explained his text messages by saying he was “frustrated our (team) owners were racing in a series using sponsors and colors and liveries that looked a lot like NASCAR.” He said NBC Sports executive producer Sam Flood complained to NASCAR that SRX was causing marketplace confusion.
But when NASCAR’s lawyers looked into potential violations, they found there was no infringement on NASCAR’s intellectual property.
Phelps, who acknowledged his compensation package from NASCAR is worth as much as $5 million per year, was asked about nearly $400 million being paid to the NASCAR-owning France family from 2021-24. Phelps said his understanding was $300 million of that was used to pay taxes, but later said he was unsure if that meant NASCAR’s taxes or the France family’s taxes.
Regarding the race teams’ initial request to be paid $720 million per year — enough to cover the estimated $20 million annual baseline costs per car — Phelps said that sum would have left NASCAR “bankrupt.” (NASCAR is paying the teams $431 million instead.)
“The sport would cease to exist,” Phelps said of the $720 million sum.
He called the charter agreement disputes “one of the most challenging and the longest negotiation I’ve ever been part of” but said his goal had been “to get it done” — and 32 of the 36 charters were ultimately signed.
Phelps was questioned about the France family taking ISC private — then selling Auto Club Speedway in California to pay down the debt from the purchase — but said the sale was vital for NASCAR’s scheduling flexibility.
“That was a really important and undervalued decision,” Phelps said, adding this year’s Mexico City race and Chicago Street Race would not have been possible with a publicly traded company.
Earlier Tuesday, NASCAR questioned economist Dr. Edward Snyder on his contention Formula One was the closest benchmark to NASCAR — with NASCAR attorney Larry Buterman saying IndyCar should have been a more comparable example.
After that, accountant Anthony Smith testified he received anonymized data from 12 race teams, nine of which reported a loss. However, Smith acknowledged he did not have the opportunity to certify or audit the finances of any team (though they were submitted under a court order requiring good faith).
