NASCAR, teams 'far apart' on proposal for revenue increase
By Bob Pockrass
FOX Sports NASCAR Writer
CHARLOTTE, N.C. — Representatives of teams negotiating with NASCAR to try to get an increase in revenues distributed by the sanctioning body say their proposal was rejected last week, and the sides 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 air their concerns.
They said their seven-point revenue-sharing proposal sent to NASCAR executives in June did not receive a response until last week. Their hope is to have a deal done to increase revenues effective in 2025, which is when the still-to-be-negotiated television deal would go into effect along with a still-to-be-negotiated charter agreement between NASCAR and the teams, which would determine revenue allocations based on elements such as participating in every race, finishing positions in races and the final standings.
"We presented a proposal that we worked with them on in how to come up with that seven-point proposal," Gordon said. "We waited. We finally did get a response from them. And we're very far apart."
The committee would not give specifics on the proposal or the response. The teams say they are willing to give up some rights when it comes to social and digital to allow for sports betting and content licensing.
"After waiting three months and consistently asking them to please respond because our owners were losing their patience, we received a proposal with a minimal increase in revenue, and the emphasis was on cutting costs dramatically," Polk said.
"The cost of the car is somewhat fixed. What would that lead to? That would lead to massive layoffs at our teams."
NASCAR released a statement indicating that it will continue to work with the teams to find a solution.
"NASCAR acknowledges the challenges currently facing race teams. A key focus moving forward is an extension to the charter agreement, one that will further increase revenue and help lower team expenses. Collectively, the goal is a strong, healthy sport, and we will accomplish that together."
Team owners and executives 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 are looking for is a revenue model in which the distributions from NASCAR cover the costs of building cars and paying labor except for the driver.
Gordon said Hendrick Motorsports won’t make money this year, and "it’s been a while" since it has.
"We're happy with not making a massive profit. We would go along with that," Gordon said. "But right now, it just goes back to all it takes is one sponsor to step away, and we went from maybe getting close to breaking even to not even close."
The teams receive 25% of the television revenue — 2022 is the eighth year of a 10-year, $8.2 billion deal — while the 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 are generating 60-80% of their revenue from sponsorship, compared to 8-12% for MLB teams and 17-18% for NHL teams.
When M&M’s announced last year that it would not return as a sponsor for JGR and the car driven by Kyle Busch, the organization saw negotiations with Busch for a new deal collapse. Busch announced last month that he would move to Richard Childress Racing next year.
"It had a big impact on the outcome of that situation, for sure," Alpern said of losing a sponsor. "I think we've all been keenly aware of this for a long time. That's just probably one example."
In the sport, 16 organizations own the 36 charters. A charter is NASCAR’s version of a franchise, as it guarantees a spot in every Cup race but doesn’t come with any ownership in the league. The committee said the teams’ overall value is only 7% of the total value of the industry.
"The sport is a sleeping giant," Polk said. "But we all have to get the interests aligned because we need to grow it together. We need to create more revenue. We need to create a greater sharing arrangement where every dollar that's created benefits drivers, benefits teams, benefits tracks, benefits NASCAR.
"That’s not how it's set up right now. So when you have this misalignment of interest, how could you get everybody moving in the same direction?"
Polk is the relative newcomer of the group, as he has been involved in the sport for only two years. Alpern has been with JGR since its inception 30 year ago. Gordon is a four-time Cup champion driver whose first career start came 30 years ago. Newmark has been involved in the sport for decades and assumed the president role at Roush in 2010.
Having Polk involved appears to be key, as he can bring a bit of an outside voice in negotiations while many of the others have strong relationships with NASCAR leadership.
"There are a lot of long-term relationships that have made it challenging to have these types of formal discussions or this level of discussions," Gordon said. "This is not a new discussion. 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 that ... the timing is right for us to get together and utilize a new relationship like Curtis to get us to that position where we’ve got to put our foot down of what’s right."
Bob Pockrass covers NASCAR for FOX Sports. He has spent decades covering motorsports, 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 @bobpockrass, and sign up for the FOX Sports NASCAR Newsletter with Bob Pockrass.