My Thoughts On The Current NASCAR Cup Charter Situation
By David G. Firestone
Well, the NASCAR charter fiasco has reached its peak. On September 7, NASCAR presented its final charter offer. According to Jayski and Sports Business Journal:
“The term of the charter agreement is for seven years starting in 2025 and commensurate with NASCAR’s new media rights deals that begin next year, meaning teams who signed on did not get the permanency of the system they had been negotiating for in recent years. Teams are getting more revenue as part of the deal, which stems from NASCAR getting a 40% increase in its media rights agreements worth $7.7B. For example, the last-place charter got around $4-5M annually in the old charter agreement from 2016-24, while that will go up to around $8.5M in the new version from 2025-31, people familiar with the matter said.”
NASCAR then gave the teams an ultimatum to sign the new deal. Of the 15 teams, 13 signed the charter. Some were happier than others, but most realized, in the words of Justin Marks:
“It’s been kind of a living document that has changed a lot as these conversations have taken place. But for me, and I can only speak for me, in the back of my mind, if they don’t put a deadline on it — well, the deadline is when we go racing next year — if the day doesn’t come when finally someone goes ‘we’re done here and we’ve taken as long as we need,’ then it will never come and it will never end. So me, personally, as we’ve had these conversations, I was anticipating the day that NASCAR would come and say ‘this is it. We’re done. We’ve addressed all these issues and you know where we won’t move, we’ve agreed on 90 percent or 75 percent of it (so) it’s time to get this thing done and start building our future together.
I think everyone can interpret it in their own way,” Marks said. “For me, regardless of how you want to build a narrative around it. Ultimately, it’s NASCAR’s sport and they said, ‘We are done negotiating here, this is the deal, it’s not going to change.’
“Ultimately, we had to make a decision and I looked at that and I said, ‘I’m not going anywhere so we’re going to sign it.’ You can interpret that anyway you want. Every team and team owner has their own relationship with NASCAR and mine, the philosophy of mine is always coming from a place of partnership and collaboration so I don’t necessarily feel like it was that way.
Rick Hendrick had this to say:
“I think we worked really hard for two years and it got down to, you’re not going to make everybody happy. And I think it got down to, I was just tired,” Hendrick said. “Not everybody was happy. But in any negotiation, you’re not going to get everything you want, and so I felt it was a fair deal and we protected the charters, which was number one, we got the (revenue) increase, I feel a lot of things we didn’t like we got taken out, so I’m happy with where we were.”
The two holdouts who didn’t sign were 23XI Racing and Front Row Motorsports. For some reason, these two teams think they can hold out for better terms. Why? I have no idea. 23XI is owned, in part, by Michael Jordan. Say what you want about Jordan, but you can’t argue he doesn’t know how to negotiate. He also has the star power of Bubba Wallace, Tyler Reddick, and co-owner Denny Hamlin. Them holding out could work, since they do have star power.
Front Row is a different story entirely. In the Cup Series, they have a total of four wins in their entire existence since 2005. To put that in perspective, Tyler Reddick has four wins for 23XI Racing in the last two years. Front Row is not a powerhouse team by any definition. What makes this strategy even more perplexing is that Front Row is trying to buy a charter from Stewart-Haas. I can’t see this working out to well for them.
Front Row has no leverage whatsoever. 23XI has some leverage, but with 13 teams signing the agreement, they don’t have as much as they think. The other teams realized that this had to end at some point, and signed the deal. NASCAR strong-armed their teams into signing. While this isn’t a great look, they really didn’t have any other options. It is what it is really.
Realistically, this was the only outcome. Everyone was tired, everyone was at the end of their rope, and the outcome was, well, meh. Sometimes the best outcome is just a stalemate.
If anything changes, I will talk about it next week. If not, I will probably discuss the Rahal Letterman Lanigan Racing situation. We’ll just wait and see.
Sources Cited:
Is a charter agreement imminent? UPDATES
Rick Hendrick, Justin Marks comment on charter agreement
https://en.wikipedia.org/wiki/23XI_Racing
https://en.wikipedia.org/wiki/Front_Row_Motorsports
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