What Will Happen to 23XI and FRM Without Charters as Open Teams?

Without charters, 23XI Racing and Front Row Motorsports (FRM) face a new, uncertain path in the NASCAR Cup Series. News broke on June 6, 2025, that the U.S. Court of Appeals plans to overturn the injunction allowing both teams to keep their charters during an ongoing lawsuit over NASCAR’s 2025 Charter Agreement.

If there’s no further legal action, this ruling will take effect on June 26th, stripping both 23XI and FRM of their charters just before the Atlanta race weekend.

Chartered teams in NASCAR are granted automatic entry to all events and a guaranteed share of broadcast revenue tied to NASCAR’s billion-dollar TV deal. This revenue is substantial: teams with charters can count on several million dollars more per season compared to open teams.

Without this safety net, 23XI and FRM would have to qualify each week to earn a place in the race. Only full fields with more than 40 car entries—seen most recently at the Daytona 500 and Coca-Cola 600—would put them at risk of missing out entirely, but the threat remains.

Sponsorship and driver contracts are also impacted by the loss of a charter. Many sponsor deals include clauses that can void commitments if a team loses its charter status, which could quickly lead to a significant drop in funding.

Drivers may also have exit opportunities built into their contracts. For instance, Tyler Reddick could leave 23XI Racing if agreements become invalid.

That leaves teams needing to rely more heavily on outside funding. While 23XI can turn to co-owner Michael Jordan for support, FRM’s Bob Jenkins would be in a tighter spot, as even teams with charters report operating at slim or negative margins.

There’s no effect on championship eligibility. Both open and chartered teams score points under the same system and can qualify for the NASCAR Playoffs.

Only race entry is trickier, as open teams still have to show sufficient speed in qualifying. However, victories and playoff contention remain possible, just as Shane van Gisbergen won as an open team entry at the 2023 Chicago Street Course event.

The actual fate of the six charters held by 23XI and FRM remains under question. NASCAR could reduce the total number of active charters from 36 to 30, delivering higher payouts to the remaining teams.

An added complication is the pair of charters that both teams purchased from Stewart-Haas Racing after that team closed in late 2024. These can’t simply revert to the now-defunct organization.

Gene Haas still runs a single-car operation, but the charter logistics could affect how many cars actually start each week. For more on Stewart-Haas Racing’s evolving involvement, see this latest analysis.

For 23XI and FRM, operating without charters would mean steeper financial challenges and higher risks for every weekend’s grid spot. While the path to the playoffs is not blocked, and car numbers remain safe, the business model shifts overnight, raising questions about sustainability.

Both teams—and their fans—are waiting to see if new legal action or a NASCAR policy change will keep them in the fold or force them to adapt to racing as open teams by the end of June. Recent comparable incidents in racing highlight how quickly these situations can evolve—the Verstappen-Russell clash being a notable example.