The 2024 NASCAR Cup Series season is nearly halfway over and there is no agreement in place to extend the charter agreement between NASCAR and its teams.
And teams aren’t very optimistic about the state of negotiations, either. There’s been little progress made between the two sides in recent months, and a breakthrough doesn’t 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 car with a charter receives a guaranteed entry into every race and a greater share of prize money from NASCAR. In return, the teams can sell the charters if they downsize or shut down. Before the charter agreement, a NASCAR team that shuttered had no value to prospective 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 following the 2024 season. NASCAR has already announced its broadcast partners for 2025 and beyond, but that agreement didn’t spur on the charter negotiations. Instead, it may end up being a sticking point.
The teams would like charters to become permanent and have no expiration date. Plus, they want a greater share of revenue. NASCAR’s tracks — many of them are owned by NASCAR itself — receive just over half of the media rights revenue, while NASCAR gets 10% and teams get the rest.
Teams have borne the brunt of increasing costs in recent years as NASCAR introduced a new car in 2022 that included spec parts from NASCAR-approved suppliers. That car has been tweaked multiple times already, and every rules adaptation results in more costs. Throw in a sponsor environment that that is tougher and tougher for teams to navigate, and you can understand why teams would like to be self-sustainable and rely less on sponsorship dollars to cover their budgets.
NASCAR, as you can imagine, isn’t too keen on cutting the share of the money that it and its tracks receives.
Among the complaints: The France family, which owns NASCAR as a private company, still won’t budge on making the charters permanent, the series made rollbacks from previous offers and the proposal now includes a provision that would allow the France family/NASCAR to purchase charters, which are at the heart of the series’ business model.
When team owners pushed back at NASCAR owning and operating race teams, they said they were sternly informed it is no different from IndyCar, which is owned by Roger Penske, who also fields three cars in that series. It also was noted that NASCAR owns the IMSA sports car series, and one of the teams is owned by chairman Jim France.
While you can understand NASCAR trying to use all its leverage in its negotiations with the teams, citing the media rights deals as a sticking point seems to be a pessimistic business view. NASCAR viewership has stabilized in recent seasons, but it’s still significantly lower than it was a decade ago.
NASCAR will assuredly have a market — however niche it may be — when the new media rights agreement needs to be renewed in the 2030s. But anyone who tells you what the sports rights landscape will look like a decade from now is also probably lying to you.
Denny Hamlin, meanwhile, pointed out that permanent charters wouldn’t cost NASCAR anything. There was no implementation fee for the sanctioning body when charters were introduced, nor is there a significant cost for NASCAR when a team’s charter is sold.
NASCAR’s proposed provision for the France family to own 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 existed for a long time and Penske has owned IndyCar teams for decades. He’s owned the series and the Indianapolis Motor Speedway since the fall of 2019.
If NASCAR and its teams can’t reach an agreement, there is a scenario where teams could boycott races, even if it could be farfetched at the moment. And if it does happen, it wouldn’t be the first time in NASCAR history that teams skipped races in protest of the sanctioning body’s decisions.
In 1969, Richard Petty and other drivers refused to race in the first race at Talladega because of concerns about the durability of the tires. Then-NASCAR chairman Bill France Sr. put the race on anyway and worked to find other drivers to fill the field.
Would NASCAR go to similar lengths in 2025 to fill fields if there was a boycott over the lack of a charter agreement? It’d certainly be a lot more difficult given the much stricter car rules and regulations that govern the Cup Series today. But the fact that the slight possibility could even exist shows just how much disagreement there is between NASCAR and its teams over the series’ expiring franchising model.
Source Agencies
