Race teams hire top antitrust lawyer as NASCAR revenue sharing negotiations stall

The teams that compete in the NASCAR Cup Series have hired one of the largest antitrust and sports lawyers in a consultation role as it negotiates with the sanctioning body over a new revenue sharing model.

The latest development was filed on Sunday night, on the eve of the Daytona 500, by the Associated Press.

The report states that the principal owners of all 15 chartered teams met on Saturday at Daytona International Speedway, a meeting that NASCAR officials invited to attend, but none of them did. That continues a longstanding NASCAR policy to interact with the teams on an individual basis and not collectively through its Race Teams Alliance entity.

The teams have hired Jeffrey Kessler, partner and co-executive chair of Winston & Strawn LLP, who most famously led the Winston 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.

Kessler also led the United States Women’s National Soccer Team in its successful fight for equal pay while also filing free agency litigation on behalf of NBA and NFL players.

The one exception to NASCAR’s policy on interacting with the teams on an individual basis comes in the form of the team negotiating committee that directly engages with the sanctioning body on the matter of the revenue sharing agreement.

That group is comprised of Hendrick Motorsports executive chairman Jeff Gordon, Joe Gibbs Racing President Dave Alpern, RFK Racing President Steve Newmark and 23XI Racing investor Curtis Polk, who each confirmed to the AP that Kessler had been retained.

You can read those quotes in the original post.

The current revenue sharing agreement between the sanctioning body and the teams runs from 2016 to 2024. A new agreement needed to be reached by the end of last year, but was stalled by NASCAR not finalizing a $7.7 billion broadcast rights deal until early December, which gave the two sides only a month to negotiate.

Teams had spent that past two years trying to work towards an agreed upon framework of a deal but NASCAR would not agree to anything until a new broadcast rights agreement had been finalized. The two sides agreed to an extension that ran through January but no deal was reached and the teams did not agree to another extension.

What that deadline means is that the teams are now legally free to negotiate with any party that would want to talk about sanctioning the 15 teams away from NASCAR. The AP, however, stated in its report that the teams have not discussed a breakaway series or sanctioning races away from tracks not currently on the NASCAR schedule.

What each of the owners said they want is a ‘fair deal,’ and one that also includes new revenue streams recently opened-up NASCAR’s participation in legalized gambling arenas. The teams are believed to want somewhere around 50 percent of the revenue, which up from what is currently around 37 to 42 percent.

That number isn’t agreed upon because NASCAR and the teams are also not agreeing on accounting philosophies on what the current revenue split is.

The decision to retain Kessler is a matter of the team’s viewpoint that NASCAR operates with nearly complete independence of its participating teams.

In addition to revenue, teams are also seeking more collaboration on marketing, expenses and logistical matters.

Denny Hamlin, an active competitor for Joe Gibbs Racing, who also co-owns the 23XI Racing team with NBA legend Michael Jordan referenced this during his Daytona 500 Media Day scrum on Wednesday night.

“I think that this whole thing is such a monopoly that you kind of get shut down in different areas, you’re allowed in some places, but not in others,” said Hamlin.

“There’s only a seat if you’re allowed a seat and they’re only going to allow a seat in a few certain situations, but I do think there’s avenues to the drivers being more equitable in the sport in the future.”

The teams are also seeking a degree of permanence in the charter system, which is currently how NASCAR pays its share of revenue to all 36 full-time cars. The charters, which basically act as franchises like the New York Yankess or Los Angeles Lakers, permit automatic berths into every race and provide guaranteed revenue not tied to sponsorship.

The value of a charter, which is based on its scarcity, has started to skyrocket over the past five years, from less than $10 million to a reported $40 million last year when Live Fast Motorsports sold its franchise token to Spire Motorsports.

The two sides have yet to agree on whether that system should be made permanent.

Ultimately, if a deal cannot be reached before the end of the year, or at least before the start of the 2025 season, NASCAR will have the option to rescind all 36 charters from the teams and contest races with a different set of teams.

The consensus around the industry is that both sides are too valuable to each other that racing without each other is mostly untenable. The teams need NASCAR’s 76 years of brand identity and infrastructure, while NASCAR needs the most recognizable teams and drivers in the discipline racing on that platform.

Lastly, the teams also want NASCAR chairman Jim France directly involved in meetings, something he has yet to accept.

Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.