In a recent development, NASCAR team owners of 16 organizations have sent a letter to NASCAR’s board of directors, requesting “meaningful dialog” regarding the franchise model system. The letter was sent on May 1, via email, and a copy was obtained by The Associated Press.
Although conversations with NASCAR have been productive, the charter system remains the main sticking point between the teams and NASCAR. Under this system, each of the 36 cars with a charter are guaranteed a spot in the 40-car Cup Series field each week and a slice of TV package revenue.
The charters, worth millions, require renewal, and the teams want to make them permanent. However, NASCAR has been unwilling to discuss making them permanent, which led to the team owners skipping a scheduled April 5 meeting with NASCAR.
The letter acknowledges that there has been “tentative acceptance of the economic split of a new media deal.” However, the teams wrote in the letter that the acceptance of “the new media split” was dependent on permanent charters.
“We have seen the market for Charters rise since initially issued, but there is currently no real market due to the uncertainty surrounding the pending renewal process,” the letter states. “In order to continue to invest in our Teams and the sport as a whole, we need to build long term value in our Charter ownership that is stable, predictable, and permanent.”
The team owners have requested to engage in conversations with NASCAR to understand its concerns and have reviewed these concerns with their outside counsel and others who are well-versed in such issues from other leagues.
The charter system was introduced in 2016 to create a franchise model that protected team owners’ investment in a racing series founded by and independently owned by the France family. The current charters expire at the end of the 2024 season, and the four-person team owner negotiating committee told AP last month that NASCAR was unwilling to even discuss making them permanent.
The committee is comprised of Jeff Gordon representing Hendrick Motorsports; Joe Gibbs Racing president Dave Alpern; RFK Racing president Steve Newmark; and Curtis Polk, an owner in 23XI Racing and longtime business manager for Michael Jordan.
The letter was signed by representatives of 16 different teams, including Hall of Famers Rick Hendrick, Richard Childress, Joe Gibbs, and Jack Roush.
NASCAR on Friday did not immediately respond to a request for comment on the letter. The teams have said that sponsorship covers 60% to 80% of their budgets and they need financial relief from NASCAR because they’ve become “full-time fundraisers.”
This recent development in the ongoing fight between NASCAR and its teams over a new revenue model is sure to have an impact on the sport, and NASCAR fans will be keeping a close eye on how the situation develops.
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