In the face of a rumored ‘take it or leave it’ revenue sharing offer from NASCAR, the teams that compete in the Cup Series are very clearly taking their negotiating asks public in a way they haven’t over the past two-plus years of the process.
As a reset, if a new agreement is not reached before next season, there is no longer a binding financial agreement that holds the teams and the sanctioning body together in a way that looks is recognizable to the modern eye.
Because a key deadline passed at the end of last year, teams are already to free to collectively look for alternative sanctioning bodies to race under. If a new agreement isn’t secured by the start of next season, Cup Series races could be contested without the teams and drivers that currently make up NASCAR’s highest levels.
There is a lot happening but here is the shortest version:
NASCAR in December inked a seven-year agreement with FOX Sports, NBC Sports, Amazon’s Prime Video and Turner Sports that will pay over $1.1 billion per season starting in 2025. Combined the previously secured Xfinity Series deal with the CW Network over that same period, NASCAR netted 7.7 billion on its broadcast rights.
That’s a 40 percent increase over the agreement with FOX and NBC that ran from 2015 to 2024.
Currently, 65 percent of the broadcast money goes to the tracks, 25 percent goes to the teams and 10 percent goes to NASCAR itself. But really, teams get closer to 39 percent when factoring prize money into the equation.
At one point, the teams were pushing for something that amounted to half the broadcast revenue, but the conversations have shifted into other areas that include future revenue streams, such as but not limited to sports betting.
The teams claim they are all operating at a loss as articulated by Jeff Gordon in February.
“We’re still heavy on relying on sponsor income,” Gordon said. “I think that’s why things have not moved forward. I think there’s 3-4 key things the teams have been very consistent on in talking to NASCAR about — not only to make the teams profitable, we don’t make money, right?
“I don’t think Hendrick Motorsports has made a profit in 10 years. So, you say ‘why do you do it’ and I say Rick Hendrick loves the sport, cars and it’s been good branding. But if we didn’t have all the B2B and we’re one of the few teams out there very fortunate to have the B2B to tie Hendrick Automotive Group and Hendrick Motorsports together, I don’t know where that would put us.”
Speaking to Dale Earnhardt Jr. on the Dale Jr Download on Wednesday, Hamlin echoed those sentiments.
“Right now, there are three stakeholders in this sport,” Hamlin said. “The tracks, the teams, and NASCAR. And, to be quite honest, two of those stakeholders make nine-figure profits a year and one stakeholder loses seven-figure profits per year. So there’s clearly a disconnect. And I wish that the fans were more informed of how offset this deal is and how unfair it is to the teams. But, you know, that’s an issue you’ve got.
“We’ve asked to have a sharing of any future revenue. So we’re not going to dig in anyone’s pockets from NASCAR from anything that they’ve established in the past. Anything from this point forward, we’ve asked for, you know, a third of that. And they’ve adamantly said no and we’re willing to give extra rights up to give that. They’ve said no.”
How the NASCAR charter system works
Then there is the charter system, which is NASCAR’s version of a franchise model, making each entry like the Hendrick Motorsports No. 24 and the Team Penske No. 2 an equivalent to the Los Angeles Dodgers and New York Yankees in baseball vernacular.
In the same way that leagues and teams enter into revenue-sharing agreements across multiple sports, NASCAR and Cup Series teams have a similar deal in the charter system. There are 36 charters and each one permits automatic entry into every Cup Series race and provides anywhere from $5-10 million per season depending on performance.
The races start up to 40 cars per race, but the unchartered cars that make the show receive considerably less revenue compared to those that are franchised.
The Cup Series teams are represented by an entity called the Race Team Alliance, who wants to make the charter agreement permanent, but NASCAR has not formally agreed to that model yet.
And that’s also a point of contention, currently.
“And then just governance, you know, it’s certain protections that the teams need in case of transfer of ownership,” Hamlin said.
The most recent charter, from Live Fast Motorsports to Spire Motorsports, was sold for a reported $40 million dollars. From the team’s standpoint, it gives them a great deal of uneasiness that these sort of investments are being made into something that isn’t permanent.
NASCAR, meanwhile, never intended for the charter system to become a permanent franchise model.
Speaking to the New York Times for a story on Wednesday said NASCAR as a whole will die without the charter system being made permanent. He made parallels to the relationships stick and ball franchises have with leagues and how its different than NASCAR.
This is the first time Jordan himself has spoken publicly on the matter.
“If you had permanent charters, then you could create a revenue stream, either with new investors or different types of sponsorships that would subsidize that type of variance between ownership and the league,” Jordan said. “That’s a big, big miss right there. If you don’t correct that, this sport’s going to die not because of the competition aspect, but because economically it doesn’t make sense for any business people.”
Curtis Polk, who manages all things business for Jordan and is an investor in 23XI Racing alongside Hamlin, said the lack of permanence discourages potential investors from joining NASCAR and its current teams — investors who could grow the sport.
“Until we are all aligned and paddling the boat in the same direction, we’ll never be able to reach the full potential that NASCAR has,” Polk told The New York Times. “There’s just a ton of money on the sidelines that wants to invest in big-time sports, and NASCAR is a big-time sport. It’s not what it was in the early 2000s, but there’s no reason it can’t get back there again.”
As the hard deadline nears, and as all sides dug into their respective trenches, the teams hired Jeffrey Kessler, the co-executive chair of Winston & Stawn LLP, who most famously led the legal team that challenges the compensation restrictions against NCAA college athletes and paved the way for the Name, Image and Likeness policies that have emerged in its aftermath.
Kessler says the teams wants to negotiate but “but they won’t take an unacceptable deal. I was hired to help them think through their options.”
That includes where teams would race if they contested their own events independently of NASCAR. Kessler says NASCAR would open itself up to antitrust violations if it impeded access to racing facilities. NASCAR owns roughly half the tracks on its schedule alongside Speedway Motorsports.
Polk, meanwhile, is part of the team’s negotiating committee that is also comprised of Hendrick Motorsports vice chairman Jeff Gordon, Roush Fenway Keselowski Racing president Steve Newmark and Joe Gibbs Racing president Dave Alpern.
NASCAR has chosen over the past year to cease meeting directly with the TNC and instead work on the teams one-on-one, feeling as though it has made progress with some of the smaller organizations on securing a deal.
Jimmie Johnson, speaking about the topic during a press conference last month at Texas Motor Speedway says the teams are collectively unified.
“What’s ultimately been most impressive to me is just how the team ownership group has stuck together,” Johnson said. “I think we’re a lot stronger as a unified group, hearing a consistent message. That’s something that’s been more difficult for owners in the past, but the ownership group has been very committed to that and I think that’s been very useful.”
In March, NASCAR President Steve Phelps expressed optimism over the deal the sanctioning body would ultimately land upon with the teams.
“What I do know is that it’s going to be a fair deal, and it’s going to put our teams in a better financial position, a path to profitability, for sure. I think it’ll increase their enterprise value. It’ll be more competitive on the racetrack, which is really the objectives they had talked about.
“Even the proposal on the table right now, I think, it does that. Maybe not to the degree that the teams would like. We’re in a good position.”
NASCAR COO Steve O’Donnell said last month that a deal was close but Hamlin immediately refuted that.
“The four key elements that I haven’t seen NASCAR brought up and what our ask has been, they have not addressed those or haven’t conceded to those,” Hamlin said. “I think that it’s positive messaging more than it’s actually real.”
Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.