‘This is not a fair system’ claims the NASCAR revenue team

CHARLOTTE, NC (AP) — NASCAR’s most powerful teams warned Friday that the venerable motor racing series has an unfair “broken” economic model and has little or no chance of long-term stability, a startling announcement that added to a growing list of problems.

The Cup series heads into Sunday’s Charlotte Motor Speedway track qualifying race with three full-time drivers sidelined by injuries to NASCAR’s new car and no clear answer on how to fix the safety concerns.

It got worse as the teams announced their year-long battle with NASCAR over the fair distribution of revenue.

“The economic model is really disruptive to the teams,” said Curtis Polk, who as Michael Jordan’s longtime business manager now owns an ownership stake in both the Charlotte Hornets, Jordan’s 23XI Racing team and Denny Hamlin’s field at NASCAR.

“We have reached the point where the team realizes that sustainability in the sport is not long-term. This is not a fair system,” Polk said.

The Race Team Alliance was formed in 2014 to give teams a unified voice in negotiations with the sanctioning body. The four-member subcommittee identified their concerns at a Charlotte hotel, with Polk joined by four-time NASCAR champion Jeff Gordon and vice president of Hendrick Motorsports, RFK Racing president Steve Newmark, and Dave Alpern, president of Joe Gibbs Racing.

Hendrik and Gibbs have won six of the last seven Cup Series championships dating back to 2015, but Gordon said Hendrick’s four-car lineup, the strongest in the industry, hasn’t had a lucrative season in years. You’ll lose money again this season despite the cost-cutting of NASCAR’s Next Generation car.

“I have a lot of concerns that sustainability is going to be a real challenge,” Gordon said.

Led by Polk, whose role with the Hornets brings familiarity with the NBA franchise model, the RTA introduced NASCAR in June with a seven-point plan on a new revenue-sharing model. “He sat there for several months and told NASCAR we’d like a counteroffer,” Polk said.

He did not reveal the seven points except to note that the team’s sustainability and longevity are priorities. The commission said on Friday it was open to all ideas, including spending limits like that in Formula 1.

“We are capable of whatever leads us to a new conceptual architecture,” Newmark said.

NASCAR responded to the RTA last week with a counter offer of “a minimal increase in revenue and a focus on cost reduction,” Polk said.

The team alliance was unanimous that the only place left to cut costs was layoffs.

We’ve already made big discounts. “We’re doing more with less than we’ve ever had in 30 years,” Alpern said.

NASCAR did not immediately respond to a request for comment from the Associated Press.

The battle over costs has been announced with five races remaining to crown the 2022 NASCAR Champion.

The issue has been simmering for years, and in 2016, NASCAR adopted a 36-car rental system as close to a franchise model in a sport that was founded and independently owned by the France family. The charters at least gave the teams something of value to keep – or sell – and protect their investment in the sport.

The team’s business model is still highly dependent on sponsorship, which teams must secure individually. Newmark said sponsorship covers 60% to 80% of budgets for all 16 accredited organizations.

Because sponsorship is so vital, teams are in desperate need of financial relief elsewhere and asked NASCAR to “distribute from the league to cover our baseline costs,” Newmark said.

The current charter agreement expires at the end of the 2024 season, which is the same time that NASCAR’s current television deals expire.

Although TV money is split between NASCAR, teams, and tracks, the panel found the difference’s value to be only 7% while the tracks and NASCAR had 93% of the value. Polk noted that in Formula One, all profits are split 50-50 between teams and chain ownership.

Mars Inc. NASCAR, who first entered NASCAR in 1990, decided late last year that this season would be his last and JGR has spent the past nine months trying to find a new sponsor to keep Kyle Busch, the only winner of many cup-level tournaments. Busch has since signed with Richard Childress Racing and will leave JGR after 15 seasons as Toyota’s winning NASCAR driver.

“We became full-time fundraisers,” Alpern said. “Instead of working in our business, we raise money just to survive.”

Polk said teams will honor charter agreements through 2024. But while negotiating a new charter agreement, teams are demanding more.

“NASCAR is the money printing machine,” Polk said. “But it’s the teams and the drivers who are making the show.”

NASCAR is now under fire from almost every angle as drivers remain furious over some of the latest penalties and the toughness of a new next-generation car that has been blamed for causing unprecedented injuries. What was supposed to be a routine wall crash left Alex Bowman and Kurt Busch sidelined with a concussion, and Cody Shane Weir pulled out of Sunday’s race with a broken foot.

NASCAR has tested potential modifications to the car and will present the results to the drivers Saturday morning ahead of practice in Charlotte.

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