CHARLOTTE, NC — The most powerful teams in NASCAR warned Friday that the venerable stock car series has a “broken” economic model that is unfair and has little or no chance for long-term stability, a stunning announcement that added to surging growth. list of miseries.
The Cup Series heads to the Charlotte Motor Speedway road course final elimination race on Sunday with three full-time drivers sidelined by injuries sustained in NASCAR’s new car and no clear answer how to fix the security concerns.
It got much worse when teams went public with their year-long battle with NASCAR over fair 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 interest in both the Charlotte Hornets and the two-car 23XI Racing team Jordan and Denny Hamlin field in NASCAR.
“We’ve reached the point where a team realizes that 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 in a Charlotte hotel, with Polk joined by Jeff Gordon, the four-time NASCAR champion and vice president of Hendrick Motorsports, RFK Racing president Steve Newmark, and Dave Alpern, the president of Joe Gibbs Racing.
Hendrick and Gibbs have won six of the last seven Cup Series championships dating back to 2015, but Gordon said the four-car Hendrick lineup, the most powerful in the industry, hasn’t had a profitable season in years. It will lose money again 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 for a new revenue-sharing model. The proposal “sat there for months and we told NASCAR we would like a counteroffer,” Polk said.
He did not reveal the seven points other than noting that team sustainability and longevity were priorities. The committee said on Friday that they were open to all ideas, including a spending limit like that in Formula 1.
“We are open to anything that leads 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 an emphasis on cost reduction,” Polk said.
The team alliance was unanimous in that the only place left to cut costs is layoffs.
“We’ve already had big cuts. We’re doing more with less than we’ve ever done in 30 years,” Alpern said.
NASCAR did not immediately respond to a request for comment from The Associated Press.
The battle over costs has gone public with five races remaining to crown the 2022 NASCAR champion.
The issue simmered for years and in 2016 NASCAR adopted a charter system for 36 cars, which is as close as possible to a franchise model in a sport that was founded by and independently owned by the French family. The charters at least gave the teams something of value to hold onto — or sell — and protect their investment in the sport.
The team business model is still very dependent 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 “a distribution from the league to cover our basic costs,” Newmark said.
The current charter agreement expires at the end of the 2024 season, the same time NASCAR’s current television agreements expire.
Although television money is split between NASCAR, teams and the tracks, Polk said in terms of actual revenue produced by the sport 93% goes to NASCAR and the teams receive only 7%. He noted that in Formula 1, all revenues are divided 50-50 between the teams and series ownership.
Mars Inc., which first entered NASCAR in 1990, decided late last year that this season would be its last and JGR has 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 later signed with Richard Childress Racing and will leave JGR after 15 seasons as Toyota’s winningest NASCAR driver.
“We became full-time fundraisers,” Alpern said. “Instead of working on our business, we raise 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 who put on the show.”
NASCAR is now under fire from almost every angle as drivers remain angry over a number of recent penalties and the stiffness of the new Next Gen car blamed for causing unprecedented injuries. What should have been routine crashes against the wall sidelined both Alex Bowman and Kurt Busch with concussions, and Cody Shane Ware opted out of Sunday’s race with a broken foot.
NASCAR tested possible adjustments for the car and will present the results to drivers Saturday morning before practice at Charlotte.