NASCAR Teams Express Fears of ‘Broken’ Revenue Model and Long-Term Stability – NBC Boston

NASCAR’s most powerful teams warned Friday that the venerable stock car racing series has a “broken” economic model that is unfair and has little to no chance of long-term stability, a surprising announcement that added to a growing list. from problems.

The Cup Series heads into the playoff race at Charlotte Motor Speedway on Sunday with three full-time drivers sidelined with injuries sustained in NASCAR’s new car and no clear answer on how to fix the problems. of security.

It got much worse when the teams went public with their year-long feud with NASCAR over equal revenue distribution.

“The economic model really is broken for teams,” said Curtis Polk, who as Michael Jordan’s longtime business manager now has an ownership stake in both the Charlotte Hornets and the two-car team 23XI Racing Jordan and Denny. Hamlin in NASCAR.

“We’ve gotten to the point where teams realize that sustainability in sport is not very long-term,” Polk said. “This is not a fair system.”

The Race Team Alliance was formed in 2014 to give teams a unified voice in negotiations with the sanctioning body. A four-member subcommittee outlined their concerns at a Charlotte hotel, with Polk joined by Jeff Gordon, four-time NASCAR champion and vice president of Hendrick Motorsports, RFK Racing president Steve Newmark and Dave Alpern, president of Joe Gibbs. Racing.

Hendrick and Gibbs have won six of the last seven Cup Series championships since 2015, but Gordon said Hendrick’s four-car lineup, the most powerful in the industry, hasn’t had a profitable season in years. He will lose money again this season despite the cost reduction of NASCAR’s Next Gen car.

“I have a lot of fears that sustainability is going to be a real challenge,” Gordon said.

Led by Polk, whose role with the Hornets builds familiarity with the NBA’s franchise model, the RTA presented NASCAR in June with a seven-point plan on a new revenue-sharing model. The proposal “sat there for months and we told NASCAR we’d like a counteroffer,” Polk said.

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He did not disclose all seven points, other than to note that team sustainability and longevity were priorities. The committee said on Friday it is open to all ideas, including a Formula One-like spending cap.

“We’re up for anything that gets us to a new conceptual framework,” Newmark said.

NASCAR responded to the RTA last week with a counteroffer of “a minimal increase in revenue and an emphasis on cost reduction,” Polk said.

The team alliance was unanimous that the only place left to cut costs is layoffs.

“We have already had substantial cuts. We are doing more with less than we have done in 30 years,” Alpern said.

NASCAR did not immediately respond to a request for comment from The Associated Press.

The cost battle has become public with five races remaining to crown the 2022 NASCAR champion.

The problem has been brewing for years and in 2016 NASCAR adopted a 36-car rental system that is as close to a franchise model as you can get in a sport that was founded by the France family and independently owned. The charters at least gave teams something of value to hold onto, or sell, and protect their investment in the sport.

The team’s business model still relies heavily on sponsorship, which teams must secure individually. Newmark said the sponsorship covers 60% to 80% of the budgets of the 16 chartered organizations.

Because sponsorship is so vital, teams are desperate for financial help elsewhere and have asked NASCAR for a “distribution from the league to cover our basic costs,” Newmark said.

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The current charter agreement expires at the end of the 2024 season, the same time NASCAR’s current television agreements expire.

Although the television money is divided between NASCAR, the teams and the tracks, the committee found that the value of the teams is only 7%, while the tracks and NASCAR have 93% of the value. Polk noted that in Formula One, all revenue is split 50-50 between the teams and series ownership.

Mars Inc., which first entered NASCAR in 1990, decided late last year that this season would be its last and JGR has spent the past nine months trying to find a new sponsor to keep Kyle Busch, the only multiple winner Cup-level championships. Busch has since signed with Richard Childress Racing and will leave JGR after 15 seasons as Toyota’s winningest NASCAR driver.

“We’ve become full-time fundraisers,” Alpern said. “Instead of working on our business, we are raising money just to exist.”

Polk said the teams will honor charter agreements through 2024. But in negotiating a new charter agreement, the teams are demanding more.

“NASCAR is a money printing machine,” Polk said. “But the teams and the drivers are the ones who put on the show.”

NASCAR is now under fire from almost every angle, as drivers continue to anger over some recent penalties and the stiffness of the new Next Gen car is blamed for causing unprecedented injuries. What should have been routine wall crashes have sidelined both Alex Bowman and Kurt Busch with concussions, and Cody Shane Ware opted out of Sunday’s race with a broken foot.

NASCAR has tested potential adjustments to the car and will present the findings to the drivers on Saturday morning before practice at Charlotte.

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