Hamlin explains how the new NASCAR tv deal could drastically change the sport; Talks charter system
Denny Hamlin is highly invested in the sport of NASCAR as the driver of the No. 11 for Joe Gibbs Racing. And as of last year, he’s also the owner of his own team, 23XI Racing which now fields two full time cars.
For years, Hamlin has discussed the need for a change in the NASCAR business model. Specifically, in regards to the division of the tv money.
NASCAR TV Money: It’s been hinted that NASCAR takes a 10% cut, the tracks take 60% while the teams are left with just 30%.
The current tv deal is set to expire at the end of the 2024 season. And the old way of spreading out the funds might look very different.
NASCAR made the switch to a spec chassis for 2022. The idea was to save the teams money and also level the playing field. The playing field is more level than it’s ever been, shown by the sheer number of parity when looking at the winners so far. However, teams have found there the Next Gen car has a lot of throw away parts that get used up during a race weekend, making it more expensive than expected.
The tv revenue isn’t enough, sponsorship funds the teams. At the same time, teams are struggling to find sponsorship as the cost of the 200mph billboards has gone up significantly.
Denny Hamlin hopes the new tv contract brings major change to the sport…
Denny Hamlin talks NASCAR tv money
“The pie is big enough, you just gotta divide it differently,” Denny Hamlin stated via the Dale Jr Download.
“Ultimately, we are in a sport where we have to rely on sponsorships. In a world where sponsorship dollars has so many different places it can go.”
“I mean, you can go have your name on the front of an MLS team for what we charge, half a season for. We’re scratching and clawing to get those sponsorships.”
“In 1995, you saw the same car, every single week. It was so recognizable. Now, you take a picture of Talladega, they won’t know whose car is what. We have to split it up, Bubba Wallace’s car has 9 sponsors this year.”
“It can’t be sponsorship based. We shouldn’t have to tread water based off a CMO’s decision. The average CMO’s lifespan at a fortune 500 company, is 13 months. We’re just hoping and praying that the next CMO loves racing.”
“That is what holds our sport back so much. Everyone has their own rights. The tracks, NASCAR and teams. As a sponsor, they playbook to become part of this sport is so complicated.”
“For instance, we had a sponsor for Kurt Busch at Richmond. But, they couldn’t go there and activate it because NASCAR had a sponsor there. They’re like, ‘You can’t come to our track and activate.’ “
“There’s a lot of things we could do better. But, there’s a lot of long term contracts that got to expire for us to get there.”
There are 36 charters in the NASCAR Cup Series. Those were introduced years ago, NASCAR’s version of franchises. In recent races, only 36 cars have been showing up to the track, that’s not a fluke.
“The guaranteed charter money is for those 36,” Denny Hamlin says.
“They actually took more money from the Open spots (non-charter cars). They took more money away from those guys that just show up and shifted it more toward the Charter money. To give more of these teams a guaranteed base.”
“They could go win the race and not make money by the way,” Hamlin says of non-charter cars.
“Why aren’t F1 owners overjoyed with Andretti coming in? Because they get diluted. There having to take that 1 billion in revenue from F1, right now they’re splitting it among 10 teams. 100 million each.”
“If we can get the TV deal in a better place, we should open up more charter positions.”
How could NASCAR add more charters?
There’s many teams interested in joining the sport. JR Motorsports sits at the top of that list. But, could NASCAR add four charters to fill the field? How would that work for the other 36 charter owners?
“You would have to pay the value. And whatever you dilute the pie, you have to pay that difference as well. It’s just a new shareholder coming in,” Hamlin said.
JR Motorsports has floated the idea of joined the Cup Series, for years. This year, those discussions have become more serious as the Next Gen car has added interest.
Hamlin added, “We have a legend of our sport, wanting to come in. He has the facilities. He’s able to do it. But, it financially, does not make sense. That is a problem.”
“With healthy owners, you have more Josh Berry’s. We’re looking at the short track ranks, to find, ‘who is going to be that guy to take us to the promised land?’ “
Currently, many teams sign with drivers that bring sponsorship. Instead of searching the ladder system for talent, they search for drivers with funding attached, even if that means taking a less talented drivers.
“There’s so many talented drivers, who just don’t have the funding. The teams have to stay in business. Sometimes, the best talent sits on the sidelines because the teams can’t go out of business.”
Dale Jr confirms his interest in JR Motorsports joining the cup series
Dale Earnhardt Jr confirmed, “We have talked to every single person that is in the industry about this. What is the options? What routes are there to take?”
“That initial purchase of the charters isn’t the scary part. They are worth what they are. You’re buying something that you hope is going to continue to gain value.
“But, not knowing the cost of racing and how much that’s going to be. Not knowing how much sponsorship you’re going to need to acquire to offset that cost. And, not knowing what the new (tv) agreement’s going to be.”
Dale Jr added, “The owners deserve a bigger piece of the pie. That’s the only way it’s going to entice people like me to get involved.”