CHARLOTTE, NC (AP) — A top group of NASCAR team owners skipped a meeting with series officials Wednesday, with the two sides locked in an impasse over perpetual charters, a key element in the stock car series’ business model.
Fearing that the meeting could be “hijacked” by talks over the charters alone — multimillion-dollar guarantees for a car in NASCAR’s top cup series — the team owners’ council told NASCAR that the talks should be postponed.
NASCAR said it planned to hold the meeting anyway, but the teams didn’t attend, said Curtis Polk, a part owner of 23XI Racing and one of four members of a negotiation committee trying to flesh out a new business plan for the country’s top racing series.
“It was obvious that if we got the whole group together, that would be the only topic anyone would want to talk about and that’s generally not constructive,” said Dave Alpern, President of Joe Gibbs Racing. Alpern, Polk, Hendrick Motorsports’ Jeff Gordon and RFK Racing’s Steve Newmark are the members of the council representing all the teams.
Owners went public last October with their frustration at what they believe is a broken business model in which racetracks and NASCAR make the bulk of the money and teams are forced to fund their organizations through outside sponsorships.
In a phone interview with The Associated Press, Alpern and Polk said significant progress was made with NASCAR on many key issues, but the two sides had reached a “significant impasse” over the charters.
NASCAR introduced a 36-car charter system in 2016, which is as close as possible to a franchise model, in a sport founded and independently owned by the France family. The charters give teams something valuable to hold – or sell – and protect their investment in the sport.
The charters are both renewable — the current ones expire at the end of the 2024 season — and revocable by NASCAR if a team does not perform for a predetermined period of time. Race teams want the charters to be permanent, and NASCAR appears unwilling to even discuss the issue.
“It’s the foundation upon which everything else is built. If they gave you the moon but can take it away from you regularly, what’s the use of having the moon?” Polk told AP.
NASCAR has said it is willing to work with teams on financial security and reiterated that commitment Wednesday after no owners showed up for the meeting.
“NASCAR is committed to maintaining an open and productive dialogue with all industry stakeholders on a regular basis,” NASCAR said in a statement. “We remain committed to continuing discussions in a spirit of collaboration and with a shared goal of growing our sport for the benefit of all involved.”
The glitch came after the entire Race Team Alliance held a call Tuesday to discuss topics for the smaller meeting with NASCAR. The RTA consists of all 16 teams and teams can have as many representatives on these calls as they wish.
When the conference call, which had more than 50 participants, revealed that standing instruments were the only topic the RTA wanted to address, the smaller negotiating committee advised NASCAR to postpone its meeting. Meetings with NASCAR are limited to one team owner and one executive from each of the 16 chartered teams.
When asked what happens next, Polk said, “We’re ready for a meeting. We want to make a deal.” However, he reiterated that talks on permanent charters needed to be started.
Alpern and Polk declined to discuss details of how teams have gained ground during months of negotiations with NASCAR.
NASCAR has claimed that teams receive about 40% of the revenue generated in the industry.
The financial split from the $8.2 billion media rights deal signed ahead of the 2015 season goes 65% to tracks, 25% to teams, and 10% to NASCAR, according to the series. There are two major track operators, NASCAR and Speedway Motorsports; NASCAR owns the majority of venues on the Cup Series schedule, including the crown jewel Daytona International Speedway, and the French family owns NASCAR.
Teams have argued that they have become “full-time fundraisers” seeking sponsors to keep their organizations afloat, and the only possible place to make further financial cuts is through layoffs.
The teams announced last October that sponsorships cover 60% to 80% of budgets for all 16 chartered organizations. Because sponsorship is so important, teams are desperate for financial relief elsewhere and have turned to NASCAR for help to cover basic expenses.
NASCAR President Steve Phelps told AP in February he was confident a solution could be found.
“We have said publicly and will continue to say publicly that we need financially healthy racing teams,” Phelps said at the time. “Fundamentally healthy race teams bring a better product to the track and that’s great for the sport as a whole.”
The current charter agreement expires at the same time as NASCAR’s current television contracts expire. NASCAR is in an exclusive negotiation window with Fox Sports and NBC Sports for renewals. The exclusive period expires on May 1, Phelps told the AP, and NASCAR may review deals for television rights with outside partners after that date.
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