NASCAR Cup Series veteran driver and team co-owner Denny Hamlin had a friendly debate with former racer turned podcaster Landon Cassill about the current state of negotiations between the team owner and sanctioning body.
Right now, the two sides are in an impasse over a revenue sharing agreement for the foreseeable future but an agreement has to be reached or the season as everyone knows it will be at risk of not taking place.
Teams want a greater share of old revenue and a share of new revenue, permanent charters and a degree of governance. The league wants teams to cut spending, potentially implementing a spending cap and no permanent charters.
There is a lot more to it, of course, but it all comes down to revenue and governance, and which extent each side wants.
The teams rejected the most recent offer from the league, calling it the worse offer yet, and a counterproposal earlier in the month. A deal has to be reached before the Daytona 500 or teams could skip races and potentially even start its own racing series.
Cassill, whom shares a podcast with TV analyst and Xfinity Series racer Parker Kligerman, says teams are to blame to a degree when it comes to their current levels of spending.
“NASCAR is not making you hire 100 engineers. NASCAR is not making you rent private jets. NASCAR is not making you spend $250k on a pit box.”
Cassill tagged Hamlin in the thread, asking for genuine feedback, and the 20 year veteran responded with a even-handed rebuke.
“About 8 engineers,” Hamlin wrote. “No private Jet. 13m hard cost. 5m to be competitive. We could cut some aesthetic cost however have you seen 3/4 of xfinity garage? Amazing experience that would be for our sponsors.”
To that point, Cup Series teams were allowed by NASCAR to create LED signage for their pit boxes this season, only after they showed the revenue and experiential value of doing so.
Hamlin has been a vocal advocate this entire year that he wants NASCAR to cover the operating expenses for teams to deliver a show each week. In other words, break even money so teams aren’t reliant on fickle sponsorship money that could dry up at any time and shutter a race team.
Hamlin addressed that point too.
“Well. Lots of thoughts,” Hamlin began. “First, 18M is just for the car on the track to put on this show each and every week (NO driver) Seems as though you think it’s excessive. Well we opened our books to NASCAR to show what exactly that money was spent on and that it was not excessive. (NASCAR executives agreed)
“You mentioned that anything we make beyond 18m is ‘profit.’ That would be incorrect. As someone who started a team from scratch and kept it as lean as I could, there are MANY other depts at a race team that are (100 emoji) necessary to operate. Business, marketing, sponsorship, social media, it goes on and on. That all cost a significant amount of money that is above and beyond the numbers listed above. That money is spent as not only as a necessity for our team but to GROW the sport thru on and off the track activation. Hopefully this is helpful when debating this topic.”
The dynamic was best illustrated by veteran spotter, agent and marketer Brett Griffin, who says teams have to find sponsorship money simply to continue operating.
They often have to hire drivers to bring their own sponsorship funding because NASCAR issued revenue is insufficient for many teams to hire based purely on talent and merit.
“Money over talent until we pay the teams to hire talent,” Griffin said. “The Xfinity Series is slowly being ruined and, in time, Cup will be next. Anyone who doesn’t see the progression and where it’s headed is BLIND. NFL teams don’t have to sign a new sponsor to hire the best QB that’s a free agent.”
Hamlin says, and this is the talking point from the teams holistically too, that if they have more revenue, they can spend on marketing activations that grow the sport.
That teams are so reliant on sponsorship revnue is challenging because they often compete with the league itself for partners. A sponsor will leave a team on occassion, to become an official partner of NASCAR, and the teams don’t receive an adequate amount of that money.
Hamlin resents that.
“We’re trying to make it more simple and we’re trying to go to NASCAR and say, ‘Let’s lock arms. Let’s do this together. We’ll give you these rights to go shop for us, that way when you go get an official sponsor, it goes to all of us.’ Same as with the NBA, the NFL, MLB does,” Hamlin said on the Kenny Wallace Show earlier in the month. “When they go get a league sponsor, every team gets a little piece of that and then the league gets a portion as well. It’s not like [in NASCAR]. We compete for the same sponsors that NASCAR does. We have our own sponsors that NASCAR will send their own sponsorship proposal to try to get them to spend money with them.
“And it’s like but we need them the most because of our business model. It cost us $18 million a year to put a car on the racetrack, we’ve asked NASCAR to just cover our costs. Nothing more, just cover our costs to go put on this show for you. And the answer has been repeatedly no. You will get what we give you and you will like it. And so, if you don’t, then don’t be a part of this.”
Again, if this ends with no deal, it ends the Cup Series as everyone currently knows it.
“We’re banging our heads against the wall because repeatedly as these negotiations have gone on, there’s been no negotiation. It’s been every proposal they’ve sent back to us is worse than the previous. That is factual, it keeps getting worse,” Hamlin said. “So, when you ask me where are we at today, we are worse off than we were two years ago. And we are eight months away from the Daytona 500 and there not being any charters.
“And why the race fans should care about that is that the reason Joe Gibbs Racing and Hendrick Motorsports show up every week is because there’s a charter deal. We get a payment to show up every single week. If there is no charter deal, we will pick and choose what the best paying races are. And we’ll go run those races. And then some weeks, you won’t see us at the racetrack because maybe that race doesn’t pay quite as good. Or maybe we don’t have a sponsor for that race…
“That’s not good for the sport. You wanna see your superstars on the racetrack every single week. Which is why this charter agreement needs to get done. NASCAR needs to understand that the teams and these drivers, they are the stars, and they are the cars. And that is what people come to see every single week. … Until we see NASCAR come our way just a little bit, I just don’t know where this goes.”
Also, to this point:
