I think the answer, as odd as it may seem, is contained in a lawsuit filed today by basketball legend Michael Jordan’s racing team, 23XI, against NASCAR, over control of stock car racing in America. Jordan is obviously the best player to ever play basketball, perhaps the greatest athlete of the 20th century (ed. greatly debateable, clearly). He’s also a billionaire with investments in everything from NBA teams to car dealerships, and he makes more money after retiring from basketball than he did while playing.
And yet, in this suit, he embraced a strong form of anti-monopoly politics. “I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors and fans,” he said in a statement. “Today’s action shows I’m willing to fight for a competitive market where everyone wins.” [ed. MJ, especially]. That’s not a statement about Democrats or Republicans, but it’s a political argument nonetheless.
And Jordan, in some ways, is answering the question about whether the antitrust revolution is just a ‘flash in the pan.’ Because this suit is not the government enforcing antitrust law, it doesn’t hinge on Donald Trump winning or losing, or Kamala Harris’ political choices. It’s a private action that cannot be blocked or accelerated by government officials. Neither Lina Khan nor Jonathan Kanter are in the driver’s seat; Michael Jordan is. And Jordan wouldn’t have brought this suit if it weren’t likely to succeed, because his lawyer, Jeffrey Kessler, a specialist in antitrust and sports, has a very good track record. Kessler helped break the NCAA’s control over athletes at the Supreme Court in NCAA vs Allston in 2021, part of the new wave of populist thinking beginning to overtake the judiciary.
This complaint charges monopolization, and since the mid-2000s, private suits alleging monopolization have been quite rare, as after the Supreme Court laid down some bad case law, they were understood as expensive and difficult to win. But there’s now a wave of private antitrust suits, everything from Fubo blocking a joint venture of Disney, Fox, and WB, to Particle suing electronic medical records giant Epic Systems, to a successful private case against Google over app stores, to multiple lawsuits against cheerleading monopolist Varsity Brands, and similar ones against the Ultimate Fighting Championship over fighter pay.
And in reading this particular complaint about NASCAR, we can see why this new wave of private rights of action is coming into the courts. When the Antitrust Division’s Jonathan Kanter beat Google in court a few months ago, it set a precedent that lawyers like Kessler see very clearly. To understand why, we have to go into the details of the case a bit.
Jordan’s allegation is that NASCAR blocks rival top-tier stock car racing series from emerging so it can be the only place where racing teams can race. With its resulting monopoly buying power, NASCAR can underpay racing teams that compete in its events. The net effect is that NASCAR captures the bulk of the billions of dollars of revenue in the sport, and teams, even those helmed by famous racers, are almost always on the verge of bankruptcy. To give you a sense of how big this monopoly is and how long it has lasted, in 2004, “seventeen of the top twenty largest-attended United States sporting events [were] NASCAR races.”
NASCAR monopolizes in a number of ways. It buys rivals that might challenge its dominance. For instance, in 2018, it bought Automobile Racing Club of America (ARCA), which could have emerged as a competitor, but did not as a result of the merger. It also seeks to control the distribution and input channels in the industry. Over the years, especially with its purchase in 2018 of the International Speedway Corporation, NASCAR has bought up most of the viable race car tracks, such as Daytona International Speedway and Talladega Superspeedway.
Top tier tracks are expensive, requiring the ability to host tens of thousands of spectators, manage safety, infrastructure, track surface, promotional, mechanical facilities, insurance, and guest services, as well as staffing people with experience to run it. Those racetracks it doesn’t own it controls through contract, prohibiting independent tracks from hosting races of potential rivals as a condition of hosting NASCAR races. One result is that most of these tracks sit vacant throughout the year.
It’s not just mergers and control of tracks. Teams themselves are both gouged by NASCAR and blocked from competing in rival events. As the complaint puts it, "Teams are now required to shell out millions to purchase car parts dictated by NASCAR, but they do not retain ownership of these parts and are forbidden from using the cars containing these parts in any other racing event." And of course, there are also non-compete agreements that teams have to sign.
The net effect is that NASCAR presents terrible deals to teams, and having invested a lot of capital, teams have no choice but to agree. Several anonymously discussed the level of fear they experience. NASCAR “put a gun to our head[s],” they were “coerced,” or put “under duress.” One team called NASCAR’s tactics that of a “communist regime.” That’s classic fear of retribution from a monopolist, which we see all over the economy.
So what does any of this stuff have to do with Google? Well, while the business of internet search and running stock car series differ, the monopolizing tactics of NASCAR and Google are quite similar.
by Matt Stollar, BIG | Read more:
Image: uncredited
[ed. See also: I've been considering replacing my greviously cracked and dinged windshield, but now... Safelite Is a PBM; and, Enforcers Move to Cut Visa's Private Sales Tax (BIG).]
