SONOMA, California – NASCAR avoided a public relations nightmare last week when it granted Kyle Larson a renunciation of participate in the playoffs even if he I lost the Coca-Cola 600. That goodwill hardly made things sparkle and rosy over the weekend at Sonoma Raceway, where teams remained extremely frustrated with NASCAR’s slow pace in reaching a new charter agreement.
Several team owners told the Associated Press that NASCAR’s most recent proposal — delivered nearly two weeks ago — was one of the worst offers from the stock car series’ sanctioning body.
Among the complaints: the French family, which owns NASCAR as a private company, has not yet relented on making the charters permanent, the series has reversed previous offers and the proposal now includes a provision that would allow the French family/NASCAR to purchase charters, which are at the heart of the series’ business model.
When team owners reacted to NASCAR’s ownership and operation of race teams, they said they were sternly told that it is no different than IndyCar, which is owned by Roger Penske, who also owns three cars in that series. It was also noted that NASCAR owns the IMSA sports car series, and one of the teams is owned by president Jim France.
Many of the teams feel defeated and fear the matchup is heading toward a “take it or leave it” bid from NASCAR. Although teams in February voted to hire prominent sports antitrust lawyer, Jeffrey Kessler, as a consultant, no move was made to pursue a case; some teams appear reluctant to take any legal action.
There are currently 36 charters that guarantee entry to all races to the 15 teams that run them. The letters expire at the end of this season and negotiations have been ongoing for several years over a new deal. Key terms sought by teams include: Make bylaws permanent, receive 45% of traditional media revenue, receive 33% of new revenue and a guaranteed seat at the table to give teams some governance power.
NASCAR’s last offer was for guaranteed charters for seven years, and an option for seven more years after that. It also included a cost cap and, in addition to the French family being able to purchase charters, a provision in which NASCAR would allow private equity firms to purchase charters.
“I think there is still a lot of work to do. Not a bit of work. Quite. So that will be the priority over the next few months to get that a little closer,” said Denny Hamlin, co-owner of 23XI Racing, after reviewing NASCAR’s offer.
Stewart-Haas Racing announced last month that it was closing at the end of the season, which has put its four Cup Series charters on the market. The next day, Front Row Motorsports said it had acquired a contract to expand to three teams next season. Front Row did not reveal how it obtained the permit or how much it spent; Spire Motorsports is believed to have spent $40 million last year when it purchased its latest contract.
In Sonoma, team owners wondered how the purchase price could have been decided for Front Row, as current contracts will have no value at the end of the season if no agreement is reached. Even SHR co-owner Tony Stewart was perplexed by the interest in the team’s four charters amid the uncertainty.
Teams are now concerned that Front Row’s announcement is an indication that some of the smaller teams are ready to accept NASCAR’s offer, despite an alliance that all 15 would remain united in negotiations. However, there is no clear alternative plan.
The teams don’t want to start their own racing league and believe NASCAR would move forward without the likes of Hendrick Motorsports, Joe Gibbs Racing or Team Penske if they decided to boycott racing. Such a scenario would leave it up to fans to decide whether the replacements – likely drivers and teams from lower-tier series – would provide a watchable product.
“It will be interesting to see how it all pans out, but I can only speak for my group by saying that we would like to get a deal done sooner rather than later, because it is certainly difficult to plan for the future when we don’t have a deal. charter agreement and right now we don’t,” Hamlin said on his podcast.
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