The revenue sharing negotiations between NASCAR and the race teams that compete in the Cup Series has reached a state of continued posturing.
The two sides continue to check in with the other but there remains no movement towards a deal that will determine how the sport is financially governed from next year through the conclusion of the 2031 season.
Several self-imposed deadlines have passed over the past five months and now it seems like the only real drop-dead date is whenever cars are scheduled to first unload next season, whatever day that turns out to be.
The short version of the negotiations are that the teams currently receive around 35-to-39 percent of broadcast revenue when combining the guaranteed 25 percent plus purse monies issued over the course of the season.
Teams are seeking closer to half the broadcast revenue, where NASCAR was last reportedly offering somewhere around 42 percent. The phrase somewhere around is an intentional distinction because one of the sticking points in the negotiations is that the two sides use different accounting means and are not even agreeing on what the current payout percentage is.
NASCAR secured a $7.7 billion broadcast rights agreement over the winter with FOX, NBC, Amazon, Turner Sports and The CW.
There are some other negotiating hurdles to overcome too in terms of gambling revenue, a waterfall that is about to burst across the entire sports industry, and how much time teams pay to spend to use the new NASCAR productions facility in North Carolina.
The latter is complicated because teams started building their own in-house production facilities once the shops were no longer used to build entire cars with the introduction of kit cars constructed using single source supplied components.
Competition matters bleed over into these conversations, ranging from the continued safety improvements of the current generation car, to how money will be spent over how to improve how it races on short tracks and road courses.
How the NASCAR charter system works
The amount of practice is a line item that will need to be addressed. Teams want the charter system, which is at its core a franchise model, to be made permanent. The teams have its own media arm, Racing America, which overlaps with NASCAR.com.
So, it’s not just about how revenue will be split for the next seven years. But as seven-time Cup Series champion Jimmie Johnson, now the co-owner and part-time driver of Legacy Motor Club articulated over the weekend, it always come down to money.
“To steal a line from Mr. Hendrick, it’s not about the money until it’s about the money,” Johnson said. “Ultimately, there are protections that the team owners are looking for, longevity that would absolutely shore things up for them financially.
“Sure, there are discussions around monies that come up front from the TV partners that are important too.”
Johnson, who is just in his second year of team ownership alongside Maury Gallagher, says it’s been an interesting process to be part of but that he has also done a considerably more amount of listening than talking.
It’s also worth noting that the teams negotiate through a committee elected by the owners holistically, a group that includes Jeff Gordon of Hendrick Motorsports, Steve Newmark of RFK Racing, Curtis Polk of 23XI Racing and Dave Alpern of Joe Gibbs Racing.
They negotiate using a unified voice through that group because NASCAR has attempted to negotiate with the teams individually but Johnson says the whole group is pretty solidified in their wants.
“To me, what ultimately has been the most impressive is how the team ownership group has stuck together and I think we are a lot stronger as a unified group, carrying a consistent message,” Johnson said. “That has been more difficult for owners in the past, but the ownership group has been really committed to that, and I think that has been really useful.”
The teams have also hired Jeffrey Kessler, partner and co-executive chair of Winston & Strawn LLP firm, who most famously led the team that successfully challenged the compensation restrictions against NCAA college athletes and paved the way for the new Name, Image and Likeness policies that have emerged in its aftermath.
Denny Hamlin, who co-owns 23XI with Michael Jordan, has been in the news a great deal the past week-plus due to his public exchange on Twitter with Speedway Motorsports CEO Marcus Smith.
Right now, the tracks get 65 percent of broadcast revenue, and what frustrated Hamlin was that he felt Speedway Motorsports has not done as good of a job as the tracks owned by NASCAR in terms of investing that revenue into facilities, leading to subpar repave jobs at Sonoma Raceway and North Wilkesboro Speedway.
That narrative is detailed here and here.
This is the condensed version of that story, but that is a snapshot of all the things that need to be sorted out before next season. A new revenue sharing agreement has to be reached before the season begins. If it isn’t NASCAR can then repossess the charters and conduct events without the teams that currently race in the Cup Series.
Conversely, the teams have been free since February to negotiate, should they so choose, with any other interested parties to compete some place other than NASCAR.
Ultimately, the general consensus is that both sides need each other, and neither side can exist without the other so a deal is more likely than not. In the words of Brad Keselowski, who co-owns RFK Racing with Jack Roush and the Fenway Sports Group, the only real deadline is the start of the 2025 season.
“I think ultimately, we’ll get to Daytona next year, and this thing will be resolved by then,” Keselowski said. “It doesn’t have to be resolved until then. Naturally, everyone wants to come to a deal of whatever they think is fair. Fair, in this case, is probably going to be where both sides are unhappy, we haven’t reached that yet.”
And while non owner-drivers tend not to interject, they tend to just want everything to sort out fairly.
“I don’t know all the details as clearly others, obviously,” Logano said. “The bottom line is that the drivers want the racing product to be as good as it can and we want everyone to be compensated fairly.
“Everyone needs to make money. Everyone that is part of this ecosystem needs to be compensated fairly and reaching an agreement on that sometimes isn’t that simple.
“The ultimate goal is to make sure the sport lives on well into the future, and I don’t see why it wouldn’t, the sport is healthy right now but the negotiation doors are open, greed sets in and everyone will try to get as much as they can. That’s business.”
Logano praised NASCAR for the safety improvements, and the bill to do so that it footed, while saying that the competition product was second most important and then money ‘so they’re moving on to the next one now.’
Full circle, Johnson says the two parties are just now reaching the decisive moments of the process.
“It has been a long road, and I think there is still plenty of road left for all sides,” Johnson said. “If it is drivers negotiating what they would like to see, team owners and certainly on NASCAR’s side – what they want to see for the future of the sport.
“I think it is going to come down to deep in the year, when everybody has to – and right now, it is still posturing. The clock is ticking, but if you look and see how much time is left – we are just getting into the eighth, maybe ninth inning of what really needs to happen in negotiating for all parties.”
Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.