The 2024 NASCAR Cup Series season is almost halfway through and there is no agreement to extend the charter agreement between NASCAR and its teams.
And the teams are not very optimistic about the state of negotiations either. Little progress has been made between the two sides in recent months, and a breakthrough does not appear imminent.
If you need a refresher, NASCAR and its teams announced the charter agreement in 2016. The charters are like franchises for 36 cars in the series. Each chartered car receives a guaranteed entry into every race and a larger share of NASCAR’s prize money. In return, the teams can sell the charters if they downsize or close. Before the charter agreement, a NASCAR team that closed its doors had no value to potential buyers other than their equipment and real estate.
An extension announced in 2020 meant the current agreement ended at the same time as NASCAR’s media rights deal after the 2024 season. NASCAR has already announced its broadcast partners for 2025 and beyond, but that agreement has not stimulated charter negotiations. Instead, it can eventually become a bottleneck.
The teams would like charters to become permanent and not have an expiration date. Moreover, they want a larger share of the turnover. NASCAR’s tracks – many of which are owned by NASCAR itself – receive just over half of media rights revenue, with NASCAR getting 10% and teams the rest.
Teams have borne the brunt of rising costs in recent years as NASCAR introduced a new car in 2022 with specialty parts from NASCAR-approved suppliers. That car has already been adjusted several times, and each adjustment of the rules leads to more costs. Add to this a sponsorship environment that is becoming increasingly difficult for teams to navigate, and you can understand why teams would like to be self-sufficient and less dependent on sponsorship dollars to cover their budgets.
NASCAR, as you can imagine, isn’t too keen on cutting the share of the money it and its tracks receive.
From the Associated Press:
Among the complaints: The French family, which owns NASCAR as a private company, still won’t budge on making the charters permanent, the series has been scaled back from previous offerings and the proposal now includes a provision that the French family /NASCAR would be able to purchase charters, which are core to the series’ business model.
When team owners pushed back against NASCAR owning and operating racing teams, they said they were sternly informed that it is no different than IndyCar, which is owned by Roger Penske, who also fields 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 chairman Jim France.
While you can understand that NASCAR is trying to use all its leverage in negotiations with the teams, citing the media rights deals as a sticking point seems like a pessimistic corporate view. NASCAR viewership has stabilized in recent seasons, but is still significantly lower than it was a decade ago.
NASCAR will certainly have a market – no matter how niche – when the new media rights deal comes up for renewal in the 2030s. But anyone who tells you what the sports rights landscape will look like in ten years is probably lying to you too.
Denny Hamlin, meanwhile, pointed out that permanent charters would cost NASCAR nothing. There were no implementation costs to the sanctioning body when charters were introduced, nor are there significant costs to NASCAR when a team’s charter is sold.
NASCAR’s proposed provision for the French family to own a team is also fascinating. Yes, Jim France owns an IMSA team, but the charter system doesn’t exist in the sports car series. And the Penske comparison isn’t exactly apples to apples. The IndyCar Series and major open-wheel racing have been around for a long time, and Penske has owned IndyCar teams for decades. He has owned the series and the Indianapolis Motor Speedway since the fall of 2019.
If NASCAR and its teams cannot reach an agreement, there is a scenario in which teams could boycott races, although that might be far-fetched at this point. And if it does happen, it wouldn’t be the first time in NASCAR history that teams have skipped races in protest of the sanctioning body’s decisions.
In 1969, Richard Petty and other drivers declined to compete in the first race at Talladega due to concerns about tire durability. Then-NASCAR Chairman Bill France Sr. continued with the race anyway and worked to find other drivers to fill the field.
Would NASCAR put as much effort into filling fields in 2025 if there was a boycott due to the lack of a charter agreement? It would certainly be a lot more difficult given the much stricter car rules and regulations that apply to the Cup Series today. But the fact that this remote possibility could even exist shows how much disagreement there is between NASCAR and its teams over the series’ expiring franchise model.
