By Bob Pockras
FOX Sports Writer NASCAR
CHARLOTTE, N.C. — Representatives for teams negotiating with NASCAR to try to get increased revenue distributed by the sanctioning body say their proposal was rejected last week and the parties are far apart.
The four members of the teams’ negotiating committee – Jeff Gordon, co-owner and vice-president of Hendrick Motorsports, Curtis Polk, co-owner of 23XI Racing and business partner of Michael Jordan, Steve Newmark, president of Roush Fenway Keselowski and Dave Alpern, president of Joe Gibbs Racing – met with the media on Friday morning to express their concerns.
They said their seven-point revenue-sharing proposal sent to NASCAR executives in June only received a response last week. Their hope is to strike a deal to increase revenue beginning in 2025, when the yet-to-be-negotiated television deal would go into effect along with a yet-to-be-negotiated charter agreement between NASCAR and the teams, which would determine revenue allocations. based on elements such as participation in each race, finishing positions in races and final standings.
“We came up with a proposal that we worked with them to come up with that seven-point proposal,” Gordon said. “We waited. We finally got an answer from them. And we are very far apart.”
The committee would not elaborate on the proposal or the response. Teams say they’re willing to give up some social and digital rights to allow sports betting and content licensing.
“After waiting three months and constantly asking them to respond because our owners were losing patience, we received a proposal with a minimal increase in revenue, and the focus was on dramatically reducing costs,” Polk said.
“The cost of the car is somewhat fixed. What would that entail? It would lead to massive layoffs in our teams.”
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NASCAR released a statement saying it will continue to work with teams to find a solution.
“NASCAR recognizes the challenges currently facing racing teams. A key goal moving forward is an extension of the charter agreement, which will further increase revenue and help reduce expenses for the team. The goal is a strong and healthy sport, and we will achieve that together.”
Team owners and managers have often complained about the economics of the sport, and the charter system has given them some value when they want to sell their teams. What they said they’re looking for is a revenue model in which NASCAR’s distributions cover the costs of building the cars and compensating labor, excluding the driver.
Gordon said Hendrick Motorsports won’t be making any money this year, and “it’s been a while” since.
“We’re happy not to make a massive profit. We’d accept that,” Gordon said. “But right now it comes down to all it takes is one sponsor to walk away, and we’ve gone from maybe close to even to not even close.”
Teams get 25% of TV revenue — 2022 is the eighth year of a 10-year, $8.2 billion deal — while tracks get 65% and NASCAR gets 10%. NASCAR, owned by the France family, owns the majority of the tracks.
Teams rely on sponsorship for the majority of their revenue. The committee said teams currently generate 60-80% of their revenue from sponsors, compared to 8-12% for MLB teams and 17-18% for NHL teams.
When M&M’s announced last year that it would not be returning as a sponsor for JGR and the car driven by Kyle Busch, the organization saw negotiations with Busch for a new deal fall apart. Busch announced last month that he would move to Richard Childress Racing next year.
“It had a big impact on the outcome of this situation, for sure,” Alpern said of the loss of a sponsor. “I think we’ve all been aware of that for a long time. That’s probably just one example.”
In sport, 16 organizations have all 36 charters. A charter is NASCAR’s version of a franchise, as it guarantees a place in every Cup race, but does not come with any league ownership. The committee said the overall value of teams is only 7% of the total industry value.
“Sport is a sleeping giant,” Polk said. “But we all have to align interests because we have to grow it together. We have to create more revenue. We have to create a bigger sharing agreement where every dollar created benefits the drivers, the teams, the tracks, NASCAR.
“That’s not how it’s set up right now. So when you have this misalignment of interest, how could you get everyone moving in the same direction?”
Polk is the newest addition to the group, having only been involved in the sport for two years. Alpern has been with JGR since its inception 30 years ago. Gordon is a four-time Cup champion driver whose first career start dates back 30 years. Newmark has been involved in the sport for decades and assumed the role of chairman at Roush in 2010.
Polk’s involvement appears to be key, as he can bring an outside voice to negotiations while many others have strong relationships with NASCAR executives.
“There are a lot of long-term relationships that have made it difficult to have these kinds of formal discussions or this level of discussions,” Gordon said. “This is not a new discussion. The owners have had this discussion at high levels for many, many years.
“And they just haven’t really materialized or gone anywhere. And I think… now is the time for us to come together and use a new relationship like Curtis to get us to that position where we have to put our the foot of what is right.”
Bob Pockrass covers NASCAR for FOX Sports. He has spent decades covering motorsport, including the past 30 Daytona 500s, with stints at ESPN, Sporting News, NASCAR Scene magazine and The (Daytona Beach) News-Journal. Follow him on Twitter @bobpockrassand register at FOX Sports NASCAR Newsletter with Bob Pockrass.
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