When Michael Jordan shows up to 23XI Racing’s sponsor summits, he displays the sort of business prowess that made him the world’s first billion-dollar athlete as he charms corporate partners, according to team co-owner Denny Hamlin.

After selling his majority stake in the Charlotte Hornets last year, Jordan is as active in the fourth-year race team as he has ever been, attending around 10 races last year, giving pit road pep talks to his drivers and holding regular conversations with team executives and staff.

Jordan, the fellow co-owner who made the No. 23 famous in the NBA, knows how to “come and say hello to some of the people who write big checks to us each and every year,” said Hamlin, the active driver who is the main day-to-day operator of the team for the investment group. Major partners include Toyota, McDonald’s, Monster Energy, Xfinity and, of course, Jordan Brand.

“Michael is very gifted at being elusive at times, but when we need him to turn it on, he turns it on,” Hamlin said.

That’s been helpful for a team competing to become the new face of NASCAR while still having to make the sport’s challenging, sponsor-reliant business model work. It’s also what differentiates 23XI as it develops a diverse fan base and workforce to go along with a competitive team.

When the team was founded in 2020, Hamlin and Jordan put together a five-year blueprint for turning 23XI into a championship contender. Now, a couple of months into the 2024 season, the effort is largely on track, 23XI executives say.

“Denny talks about a five-year plan of starting this team and then by Year 5 being a consistent race-winning team and championship contending team, and I think we took a big step forward to that in Year 3,” said team President Steve Lauletta. “Off the track, I think we did more than many of the [other NASCAR] teams combined; it was a year to remember in terms of how our partners and 23XI really came to the racetrack with unique marketing and branding ideas that hit on our mission of bringing in new fans to the sport.”

In 2023, the team’s two cars made NASCAR’s version of the playoffs for the first time. Bubba Wallace, the second Black driver in NASCAR history to win a Cup Series race, drove the No. 23 Toyota to a 10th-place finish in the season standings, while Tyler Reddick, in his first year for the team, nearly drove the No. 45 Toyota to the Final 4 championship round, falling just short in sixth place. Hamlin finished fifth in his No. 11 Toyota that he drives for Joe Gibbs Racing, which has an alliance with 23XI.

23XI also experimented with a third car for the first time last year, running one-off entries with American action sports star Travis Pastrana and Japanese sports car racer Kamui Kobayashi. Kobayashi was set to compete again for the team on March 25 at Circuit of the Americas, doing so in a gold-accented No. 50 Toyota to celebrate 23XI partner Mobil 1’s 50th anniversary.

While the team has yet to get to Victory Lane in 2024, 23XI is off to a solid start. After five races, Reddick is ninth in points while Wallace is 18th.

So far, the team’s modus operandi from a marketing perspective has been an overarching focus on cross promotion — whether that's with influencers and musicians, athletes or corporate partners. The team brought Colombian artist J Balvin to Bristol Motor Speedway to promote his Air Jordan 3 shoe collaboration, which had a matching paint scheme on the No. 45 that weekend. It held a promotion with the Chicago Cubs during the Chicago street race week.

23XI also worked with sponsor Columbia Sportswear on a “Star Wars” collaboration that resulted in Wallace shooting an ad with Mark Hamill, the actor who portrayed Luke Skywalker. Xfinity used one of its paint schemes with 23XI to delight 65 Xfinity Rewards members by putting their faces on the actual car that raced at Martinsville in the fall of 2023. This year, 23XI sponsor DraftKings used a showcar with its paint scheme at an event to celebrate the launch of legal sports wagering in North Carolina.

“When we decided that we wanted to go bigger on the team side, we wanted a team that aligned with our brand attributes predominantly around innovation and pushing the sport forward. … 23XI jumped off the page as the right group,” said Matt Lederer, Comcast’s vice president of branded partnerships and activation. “Not only did we see that in the negotiations and conversations with their pitch, but since we’ve been partners, they are constantly asking questions and working with us to find out what’s next and how we can do more.”

According to an Endeavor Analytics survey commissioned by 23XI last summer, the team’s fans are younger, more diverse and more interested in other sports than the average NASCAR fan. The study showed that 19.4% of Wallace’s fans are Black compared to 12.5% for NASCAR generally. Meanwhile, 46.8% of Reddick’s fans are age 25-44, compared to 37% for NASCAR overall. Also, about 84% of respondents said they feel loyal to partners of 23XI, while 89% said they’re more likely to consider a brand’s products if they sponsor 23XI.

Still, even with the success, 23XI hasn’t been immune to some of the challenges that have beset NASCAR teams. After serving as primary sponsor for Wallace’s No. 23 for roughly half the season in 2021, DoorDash slowly cut back on 23XI before exiting entirely this past season and leaving its NASCAR deal as well. DoorDash’s departure underscores why teams are working to reduce their dependency on sponsorship, which typically accounts for 60%-80% of a team’s annual revenue.

“It’s the same whether you’re trying to do it in any sport or in NASCAR: You’ve got to understand your partner’s business enough to bring solutions that solve their problems, and I think we’ve done a pretty good job at that,” said Lauletta. “Then you’ve got to deliver, and we’ve been lucky to deliver on all the partners that have been here. Does that mean they’re all going to stay here for 10 to 15 years? No, it doesn’t mean that. But it’s not for a lack of ideas, collaboration, support, relationships. Things change all the time.”

While the total amount of money that Jordan and Hamlin have invested into the team is unclear, their assets suggest it’s well into the mid-eight figures at a minimum. The team appeared to get into NASCAR at a good time: Jordan and Hamlin invested roughly $20 million total to buy two charters, while the asking price for a single charter is now closer to $40 million.

The team’s capital investment includes a new, 114,000-square-foot shop near Charlotte that it calls Airspeed, a name thought up by Curtis Polk, an investor in the team and longtime right-hand man of Jordan. The team won't disclose the cost of the shop, with Hamlin saying only it was twice as much as was originally budgeted.

The facility has an open floor plan like that of a tech company, along with multiple meeting spaces and lounge areas to encourage collaboration. The second floor surrounds a square balcony overlooking the shop area. When fully open, the facility will be set up for fans to visit, and Hamlin said he’d like to have specially made 23XI gear from Jordan Brand that fans could buy only in person by visiting Airspeed.

The facility is one of the first newly built shops in NASCAR in years, and team executives are hoping it wows everyone from prospective and current employees to sponsors. Currently, the team has about 100 employees, versus the biggest NASCAR teams that have several hundred. That’s one of the benefits of the new seventh-generation car, which NASCAR designed to lower overhead for teams. As a result, the shop isn’t as big as some other teams. For example, JGR makes 23XI’s cars, so 23XI doesn’t have a fabrication team nor space in Airspeed for one.

23XI also has taken a different approach toward building its staff. The team was founded in the wake of America’s social justice reckoning and pandemic in 2020, and having a diverse workforce has been among the goals upon which it was started. To try to achieve that, 23XI has built relationships with multiple schools and readily hired people who haven’t worked in the sport.

The team is thought to be the only one in NASCAR that has a full-time role solely dedicated to diversity, equity and inclusion initiatives, a position held by Kreig Robinson. Among the initiatives it took part in last year were a Dr Pepper-sponsored intern program, visiting five historically Black colleges and universities for presentations, and holding “Bubba’s Block Party” events in urban settings in Chicago and Richmond.

“I have a ton of respect and excitement for 23XI — I think both of our teams approach the sport, our place in it, and how we want to operate, in a very similar way,” said Justin Marks, founder of Trackhouse Racing. “It’s important in a time where live sports are so aggressively competing for market share, that there are teams like us and 23XI that are deeply engaging with culture in a way that transcends NASCAR.”

How much of a force new-age teams such as 23XI and Trackhouse become in NASCAR in the coming years will depend heavily on teams and NASCAR striking an agreement on a new charter system. Most teams say they are not profitable and they view this negotiation as pivotal to trying to change that.

Hamlin and Polk have at times been thorns in NASCAR’s side during the negotiations. Polk is part of the Team Negotiating Committee working on a new agreement with NASCAR, and he’s pushed for teams to get a share of revenue closer to the 50-50 split in the NBA.

Hamlin said it’s been difficult making investments in the team without a resolution, “because you’re somewhat placing a bet that NASCAR’s not going to blow this whole thing up and make awful decisions that would negatively impact our future as a team or their future as NASCAR.”

23XI’s name is one mentioned in NASCAR circles when the topic of which teams might buy another charter comes up, something that would allow the team to expand to three full-time cars. But for now, Hamlin said “everything is just kind of hanging on waiting to see what Jim [France, NASCAR CEO] decides to do.

“Does he choose to invest in us, or not? And if not, then we’ll just continue to cut, cut, cut like we’ve been doing. Content will suffer. Getting people [to work in NASCAR] will be harder and harder, and this sport will stay with its feet stuck in the mud.”

Will Hamlin drive for 23XI?

Denny Hamlin is in the unique situation of driving for one NASCAR team, Joe Gibbs Racing, while co-owning 23XI Racing. Will he ever drive for his own team?

Hamlin conceded to SBJ that he would like to one day, but it was not yet clear whether that could happen only after he retires from full-time racing with JGR, or whether he could move to 23XI while still a full-time driver.

He said he would move to 23XI as a full-time driver only if he felt confident that his race cars would be just as competitive as those prepared by JGR. But he added: “I’m slowly but surely starting to believe that 23XI is an equal to the position I’m in right now.”

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