NBA legend Michael Jordan is suing Nascar, the biggest US motorsports company, accusing it of operating an illegal monopoly that has caused financial harm to a team he partly owns.

On Monday, he sat in the front row of the courtroom for the first day of the lawsuit’s trial, listening to emotional testimony from Denny Hamlin, the three-time champion in the Daytona 500 and a co-owner of Jordan’s team, 23XI racing.

Jordan and Hamlin, along with Front Row Motorsports, are accusing Nascar of illegally making hundreds of millions of dollars by stifling opportunity.

Nascar CEO Jim France, who inherited the stock car racing business from his father, Nascar’s founder, denies any wrongdoing.

Jordan’s 23XI and Front Row Motorsports, which is led by fast food franchise owner Bob Jenkins, brought the lawsuit in October 2024. The trial in Charlotte, North Carolina, is being presided over by Judge Kenneth Bell.

They contend Nascar has stifled innovation and profit by requiring teams to drive the company’s Next Gen cars and repair them with parts bought from Nascar-licensed suppliers. They also argue that Nascar has too much control over all aspects of the racing series, including the rules and regulations, has required “monopolistic” exclusivity clauses, and owns of most of the race tracks on the Cup schedule, making it hard for competitors to emerge.

But at the heart of the suit is Nascar’s charter agreement system, which is similar to the franchise system used in other sports, but functions more as a set of contracts that are renewable and revocable.

Charters guarantee cars a spot for all 38 Nascar races and include defined payouts from a weekly purse.

Last year, the two teams in the suit refused to sign extensions of their charter agreements, calling them unfair. They were the only two teams out of 15 not to sign.

The teams wanted a greater share of the revenue and also for the charters to be made permanent. The owners argue that even with the charters, the current revenue model is not viable.

Representing 23XI, lawyer Jeffrey Kessler said in his opening statement that Front Row Motorsports owner Jenkins has never turned a profit since starting his team in 2004, despite a Daytona 500 victory in 2021.

Over 70% of teams lost money in 2024, Kessler said, citing a Nascar-commissioned study, while over a three-year period almost $400m (£302.7m) was paid to the France Family Trust. Kessler also cited Goldman Sachs estimates that Nascar is worth $5bn.

Nascar is owned by Jim France, son of Nascar’s founder Bill France Sr.

“What the evidence is going to show is Mr France ran this for the benefit of his family at the expense of the teams and sport,” Kessler told the court.

Nascar has argued that the charter is not required to compete and pointed to an increase in payouts in the latest charter agreement.

Four of the 40-car spots in a Nascar series are reserved for “open teams” or non-chartered teams.

“The France family built NASCAR from nothing. They are an American success story,” Nascar’s defence attorney Johnny Stephenson said on Monday.

“They’ve done it through hard work over 75 years. That’s the kind of effort that doesn’t deserve a lawsuit. That’s the kind of effort that deserves admiration.”

The trial is expected to last roughly two weeks and will come down to a decision from six jurors.

Jordan’s star power led multiple potential jurors to be dismissed over impartiality concerns, including one who plainly admitted: “I like Mike.”

Front Row Motorsports and 23XI are seeking a large monetary sum from Nascar to cover legal fees and financial losses suffered from not being chartered this year.

If Nascar successfully fends off the suit, it could put 23XI, Front Row and their six combined cars out of business.

Their charters are now being held by Nascar and would likely be sold to potential buyers like private equity firms.

A win for Jordan and the teams could lead to a variety of outcomes, including the end of Nascar as it is run today.

Judge Bell will have wide latitude as to how to unwind a monopoly, ranging from requiring the sale of Nascar to ending the charter system, if the suit is successful.

Jordan is the majority owner of 23XI Racing, which is co-owned by Hamlin and Jordan’s longtime business adviser Curtis Polk.

Jordan and Hamlin bought the team in 2020 by investing $20m and purchasing two charters, according to 23XIracing.com.

The team began racing its first Cup Series with only one car and one driver, Bubba Wallace.

To-date, 23XI has three Cup Series cars and is considered a formidable Nascar contender.

Tyler Reddick and Wallace are the team’s top drivers and have won 10 races for 23XI, and have made multiple playoff runs.

Other celebrities have tried their hand in Nascar team ownership over the years, including Grammy-award winning artist Pitbull, who became co-owner of Trackhouse Race with Justin Marks in 2021.

“Now we’re going to show the world Nascar is not only a sport, but it’s a culture,” he said at the time.

That same year another basketball megastar – Lebron James – became a partner of Fenway Sports Group, which co-owns Roush Fenway Racing.

Lebron’s first known public remarks regarding Nascar came in 2020, after he expressed support for Bubba Wallace when a noose was found in the garage stall of Wallace’s team at Talladega Superspeedway.

An FBI investigation found no hate crime had been committed.