10/07/22 01:55:00
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10/07 13:53 CDT NASCAR teams call revenue model 'broken,' warn of layoffs
NASCAR teams call revenue model 'broken,' warn of layoffs
By JENNA FRYER
AP Auto Racing Writer
CHARLOTTE, N.C. (AP) --- The most powerful teams in NASCAR warned Friday that
the venerable stock car racing series has a "broken" economic model that is
unfair and has little to no chance of long-term stability, a stunning
announcement that added to a growing list of woes.
The Cup Series is heading into the Charlotte Motor Speedway road course playoff
elimination race Sunday with three full-time drivers sidelined with injuries
suffered in NASCAR's new car and no clear answer as to how to fix the safety
concerns.
It got much worse as teams went public with their year-long fight with NASCAR
over equitable revenue distribution.
"The economic model is really broken for the teams," said Curtis Polk, who as
Michael Jordan's longtime business manager now holds an ownership stake in both
the Charlotte Hornets and the two-car 23XI Racing team Jordan and Denny Hamlin
field in NASCAR.
"We've gotten to the point where team's realize the sustainability in the sport
is not very long term," Polk said. "This is not a fair system."
The Race Team Alliance was formed in 2014 to give teams a unified voice in
negotiations with the sanctioning body. A four-member subcommittee outlined
their concerns at a Charlotte hotel, with Polk joined by Jeff Gordon, the
four-time NASCAR champion and vice chairman of Hendrick Motorsports, RFK Racing
President Steve Newmark, and Dave Alpern, the president of Joe Gibbs Racing.
Hendrick and Gibbs have won six of last seven Cup Series championships dating
to 2015, but Gordon said the four-car Hendrick lineup, the most powerful in the
industry, has not had a profitable season in years. It will again lose money
this season despite NASCAR's cost-cutting Next Gen car.
"I have a lot of fears that sustainability is going to be a real challenge,"
Gordon said.
Led by Polk, whose role with the Hornets brings familiarity with the NBA's
franchise model, the RTA presented NASCAR in June with a seven-point plan on a
new revenue sharing model. The proposal "sat there for months and we told
NASCAR we'd like a counteroffer," Polk said.
He did not disclose the seven points other than noting that team sustainability
and longevity were priorities. The committee said Friday they are open to all
ideas, including a spending cap like that in Formula One.
"We are amenable to whatever gets us to a conceptual new structure," Newmark
said.
NASCAR responded to the RTA last week with a counteroffer of "a minimal
increase in revenue and emphasis on cost-cutting," Polk said.
The team alliance was unanimous in that the only place left to cut costs is
layoffs.
"We've already had substantial cuts. We are doing more with less than we ever
have in 30 years," Alpern said.
NASCAR did not immediately reply to a request for comment from The Associated
Press.
The battle over costs has been made public with five races remaining to crown
the 2022 NASCAR champion.
The issue has simmered for years and in 2016 NASCAR adopted a charter system
for 36 cars that is as close to a franchise model as possible in a sport that
was founded by and independently owned by the France family. The charters at
least gave the teams something of value to hold --- or sell --- and protect
their investment in the sport.
The team business model is still heavily dependant on sponsorship, which the
teams must individually secure. Newmark said sponsorship covers between 60% to
80% of the budgets for all 16 chartered organizations.
Because sponsorship is so vital, teams are desperate for financial relief
elsewhere and have asked NASCAR for "distribution from the league to cover our
baseline costs," Newmark said.
The current charter agreement expires at the end of the 2024 season, the same
time that NASCAR's current television deals expire.
Although TV money is split between NASCAR, teams and the tracks, the committee
found that the value of the teams is just 7% while the tracks and NASCAR have
93% of the value. Polk noted that in Formula One, all revenue is split 50-50
between the teams and series ownership.
Mars Inc., which first entered NASCAR in 1990, late last year decided this
season would be its last and JGR spent the last nine months trying to find a
new sponsor to keep Kyle Busch, the only winner of multiple championships at
the Cup level. Busch has since signed with Richard Childress Racing and will
leave JGR after 15 seasons as Toyota's winningest NASCAR driver.
"We have become full-time fundraisers," Alpern said. "Instead of working on our
business, we're raising money just to exist."
Polk said the teams will honor the charter agreements through 2024. But in
negotiating a new charter agreement, the teams are demanding more.
"NASCAR is a money-printing machine," Polk said. "But the teams and the drivers
are the ones putting on the show."
NASCAR is now under fire from nearly every angle as drivers remain angry over
some recent penalties and the stiffness of the new Next Gen car blamed for
causing unprecedented injuries. What should have been routine crashes into the
wall have sidelined both Alex Bowman and Kurt Busch with concussions, and Cody
Shane Ware opted out of Sunday's race because of a broken foot.
NASCAR has tested potential adjustments for the car and will present the
findings to drivers Saturday morning ahead of practice at Charlotte.
___
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