The 2024 NASCAR Cup Series season is almost halfway over 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 the negotiations either. There has been little progress 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 rental car receives a guaranteed entry to each race and a larger share of NASCAR prize money. In exchange, teams can sell the charter if they downsize or go out of business. Before the charter agreement, a closing NASCAR team had no value to potential buyers other than its team and real estate.
An extension announced in 2020 meant the current deal ended at the same time as NASCAR’s media rights deal after the 2024 season. NASCAR already announced its broadcast partners for 2025 and beyond, but that deal didn’t drive forward negotiations. The statutes. Rather, it may end up being a sticking point.
The teams would like the bylaws to become permanent and have no expiration date. Furthermore, they want a greater share of the income. NASCAR tracks (many of them owned by NASCAR itself) receive just over half of the media rights revenue, while NASCAR gets 10% and the teams the rest.
Teams have borne the brunt of rising costs in recent years as NASCAR introduced a new car in 2022 that included specific parts from NASCAR-approved suppliers. That car has already been modified several times and each adaptation of the rules generates more costs. Add to this a sponsorship environment that is increasingly difficult for teams to navigate, and you can understand why teams would like to be self-sustaining and rely less on sponsorship money to cover their budgets.
NASCAR, as you can imagine, isn’t too interested in cutting the share of money it and its tracks receive.
Among the complaints: The France family, which owns NASCAR as a private company, still won’t budge on making the charters permanent, the series backtracked on previous bids and the proposal now includes a provision that would allow the France/NASCAR family to buy out charters, which are the heart of 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 from 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 president Jim France.
While it can be understood that NASCAR is trying to use all its influence in its negotiations with teams, citing media rights agreements as a sticking point seems to be a pessimistic business view. NASCAR viewership has stabilized in recent seasons, but is still significantly lower than a decade ago.
NASCAR will surely have a market, however 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 a decade from now is probably telling you, too. lying.
Denny Hamlin, meanwhile, noted that permanent charters would cost NASCAR nothing. There was no implementation fee for the sanctioning body when the bylaws were introduced, nor is there a significant cost to NASCAR when a team’s contract is sold.
NASCAR’s proposed arrangement for French family ownership of a team is also fascinating. Yes, Jim France owns an IMSA team, but the charter system does not 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 Indianapolis Motor Speedway since the fall of 2019.
If NASCAR and its teams can’t come to an agreement, there is a scenario in which teams could boycott races, even if this might seem unreasonable at this point. And if that happens, 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 refused to participate in the first race at Talladega due to concerns about tire durability. Then-NASCAR president Bill France Sr. organized the race anyway and worked to find other drivers to fill the field.
Would NASCAR go out of its way in 2025 to fill fields if there was a boycott due to the lack of a charter agreement? It would certainly be much more difficult given the much stricter motorsport rules and regulations that govern the Cup today. But the fact that there may be a slim chance shows how much disagreement there is between NASCAR and its teams over the expiring franchise model.
