CHARLOTTE, NC – NASCAR’s most powerful teams warned Friday that the revered motor racing series has an unfair “broken” economic model with little or no chance of long-term stability, a stunning announcement that added to a growing list of problems.
The Cup Series heads into the Charlotte Motor Speedway playoffs on Sunday with three full-time drivers absent from injuries in the new NASCAR car and There is no clear answer on how to fix safety concerns.
It got worse as the teams went public with their year-long fight with NASCAR over the fair distribution of revenue.
Curtis Polk, who now as Michael Jordan’s longtime business manager, said he has an ownership stake in both the Charlotte Hornets and the 23XI Racing team of Jordan and Denny Hamlin field in NASCAR.
“We have reached the point where teams are realizing that sustainability in sport is not 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. The four-member subcommittee identified their concerns at a Charlotte hotel, with Polk joined by four-time NASCAR champion Jeff Gordon and vice president of Hendrik Motorsports. Steve Newmark, President of RFK Racing. and Dave Alpern, president of Joe Gibbs Racing.
Hendrik and Gibbs have won six of the past seven championships of the Cup series dating back to 2015, but Gordon said Hendrik’s four-car lineup, the strongest in the industry, hasn’t had a lucrative season in years. You’ll lose money again this season despite the cost-cutting of NASCAR’s Next Generation car.
“I have a lot of concerns that sustainability is going to be a real challenge,” Gordon said.
Led by Polk, whose role with the Hornets brings familiarity with the NBA franchise model, the RTA introduced NASCAR in June with a seven-point plan on a new revenue-sharing model. Polk said the proposal “sat there for several months, and we told NASCAR we’d like a counteroffer.”
He did not reveal the seven points except to note that the team’s sustainability and longevity are priorities. The commission said on Friday it was open to all ideas, including spending limits like that in Formula 1.
“We are capable of whatever brings us to a new conceptual structure,” Newmark said.
NASCAR responded to the RTA last week with a counter offer for “a slight increase in revenue and a focus on cutting costs,” Polk said.
The team alliance was unanimous that the only place left to cut costs was layoffs.
“We’ve already made big cuts,” Alpern said. “We’re doing more with less than we’ve ever had in 30 years.”
NASCAR did not immediately respond to a request for comment from the Associated Press.
The battle over costs has been announced with five races remaining to crown the 2022 NASCAR Champion.
The issue has been simmering for years, and in 2016 NASCAR adopted a 36-car rental system as close to a franchise model in a sport that it was founded and independently owned by the France family. The charters at least gave the teams something of value to keep – or sell – and protect their investment in the sport.
The team’s business model is still highly dependent on sponsorship, which teams must secure individually. Newmark said sponsorship covers between 60% and 80% of budgets for all 16 accredited organizations.
Because sponsorship is so vital, Newmark said, teams are in dire need of financial relief elsewhere and asked NASCAR to “distribute from the league to cover our baseline costs.”
The current charter agreement expires at the end of the 2024 season, which is the same time that NASCAR’s current television deals expire.
Although TV money is split between NASCAR and the teams and tracks, Polk said that in terms of actual revenue the sport produces, 93% go to NASCAR and the teams receive only 7%. He noted that in F1, all profits are split 50-50 between teams and chain ownership.
Mars Inc. decided to NASCAR, who first entered NASCAR in 1990, late last year had to make this season its last, and JGR has spent the past nine months trying to find a new sponsor to keep. Kyle Bush, the only current winner in many tournaments at the cup level. Busch has since signed with Richard Childress Racing and will leave JGR after 15 seasons as Toyota’s winning NASCAR driver.
“We became full-time fundraisers,” Alpern said. “Instead of working in our business, we raise money just to survive.”
Polk said teams will honor charter agreements through 2024. But while negotiating a new charter agreement, teams are demanding more.
“NASCAR is the money printing machine,” Polk said. “But it’s the teams and the drivers who are making the show.”
NASCAR is now under fire from almost every angle as drivers remain furious over some recent penalties and The toughness of the new next-generation car, which has been blamed for causing unprecedented injuries. What should have been routine bumps into the wall has been sidelined Concussion-stricken Alex Bowman and Kurt Busch, and Cody Shane Weir opted out of Sunday’s race with a broken foot.
NASCAR has tested potential modifications to the car and will present the results to the drivers Saturday morning ahead of practice in Charlotte.