Pa Bob Pokras
Posted by FOX Sports NASCAR
CHARLOTTE, NC – Team representatives are negotiating with NASCAR trying to get more revenue distributed to the sanctioning body, say their proposal was rejected last week, and the parties are far apart.
The four members of the Teams’ Negotiating Committee — Hendrick Motorsports co-owner and vice chairman Jeff Gordon, 23XI Racing co-owner and Michael Jordan business partner Curtis Polk, Roush Fenway Keselowski president Steve Newmark and Joe Gibbs Racing president Dave Alpern — met with the media Friday morning to discuss negotiations.
They said their seven-point revenue-sharing proposal, sent to NASCAR executives in June, had not received a response until last week. Their hope is to negotiate more revenue in 2025, when a new television deal, which has yet to be agreed upon, goes into effect, along with a charter agreement between NASCAR and the teams. The agreement determines the distribution of revenues based on elements such as participation in each race, finishing positions in the races and overall standings.
“We presented a proposal that we worked with them to come up with this seven-point proposal,” Gordon said. “We were waiting. We finally got a response from them. And we are very far from each other.”
The committee does not provide specifics for either the proposal or the answer. Teams say they are willing to give up some rights when it comes to social and digital networks that can be used for sports betting and content licensing.
“After waiting three months and repeatedly asking them to respond because our owners were getting impatient, we got an offer with minimal revenue increases and an emphasis on drastic cost reductions,” Polk said.
“The price of the car is partly fixed. What will it lead to? This will lead to massive redundancies in our teams.”
NASCAR released a statement indicating it will continue to work with teams to find a solution:
“NASCAR recognizes the challenges that racing teams are currently facing. The main focus going forward is to expand the charter agreement, which will further increase revenue and help reduce team costs. Collectively, our goal is a strong, healthy sport, and we will achieve that together.” .
Team owners and managers often complained about the economics of the sport, and the charter system gave them some value when they wanted to sell their teams. They said they are looking for a revenue model where the distribution from NASCAR covers the cost of building the cars and paying labor, except for the driver.
Gordon said Hendrick Motorsports won’t be making any money this year, and “it’s been a while” since.
“We’re comfortable with not making a huge profit. We’d be fine with that,” Gordon said. “But now it’s just going back to where it only takes one sponsor to go away, and we’ve gone from being close to breaking even to not even close.”
Teams get 25 percent of television revenue — 2022 is the eighth year of the 10-year, $8.2 billion deal (an average of $820 million a year), while tracks get 65 percent and NASCAR 10 percent. NASCAR, owned by the France family, owns most of the tracks.
Teams rely on sponsorships for most of their revenue. The committee said teams currently get 60-80 percent of their revenue from sponsorships, compared to 8-12 percent for MLB teams and 17-18 percent for NHL teams.
When M&M announced last year that it would not be returning as a sponsor of JGR, and the car it drove Kyle Bush, the organization saw the collapse of negotiations with Busch over a new deal. Busch announced last month that he will move to Richard Childress Racing next year.
“It definitely had a big impact on the outcome of this situation,” Alpern said of the loss of the sponsor. “I think we’ve all been well aware of that for a long time. This is probably just one example.”
There are 16 organizations that own 36 charters, which is NASCAR’s version of a franchise in that it guarantees a spot in every Cup race but has no ownership in the league. The committee said the total value of the teams is only 7 percent of the total value of the industry.
“Sports is a sleeping giant,” Polk said. “But we all have to join our interests because we need to develop this together. We need to create more revenue. We need to create a better sharing mechanism where every dollar raised benefits the drivers, the teams, the tracks, NASCAR.
“That’s not the case now. So when you have this mismatch of interests, how can you get everyone moving in the same direction?”
Polk is a relative newcomer to the group, having only been playing the sport for two years. Alpern has worked with JGR since its inception 30 years ago. Gordon is a four-time Cup driver whose first career start came 30 years ago. Newmark has been involved in the sport for decades and took over as president of Roush in 2010.
Polk’s involvement appears to be key as he can bring a bit of an outside voice when it comes to negotiations, while many of the others have strong ties to NASCAR management.
“There are a lot of long-term relationships that have made it difficult to have these formal discussions or this level,” Gordon said. “This is not a new discussion. Owners have had this discussion at a high level for many, many years.
“And they just didn’t materialize and didn’t go anywhere. And I think that … the moment is the best for us to come together and use the new relationships like Curtis to understand where we should put our efforts. foot down what is right.”
Bob Pokras covers NASCAR for FOX Sports. He has covered motorsports for decades, including the last 30 Daytona 500s, and has worked for ESPN, Sporting News, NASCAR Scene magazine and The (Daytona Beach) News-Journal. Follow him on Twitter @dashand sign up for FOX Sports NASCAR Newsletter with Bob Pokras.
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