“No tv partner wants any interruption in service, whatsoever.”
NASCAR is near the end of a 10-year tv rights agreement. The current deals with FOX and NBC will expire after the 2024 season.
As of February 1st of this year, NASCAR began negotiations with Fox and NBC to renew tv rights agreements. During a narrow window, Fox and NBC have exclusive bidding rights. NASCAR will then have an option to take it outside of those two media partners if they feel like the deal offered isn’t to their liking.
At the same time, NASCAR has their ownership group unhappy with the current business model. Teams are dependent on sponsorship.
Teams are a part of their own negotiations with NASCAR to address the issue. They’re looking for a far bigger piece of the revenue pie.
Current NASCAR TV Revenue Pie
Denny Hamlin says NASCAR teams are asking for double
“We are asking them for roughly double of what we were getting because we’re not able to fill the gaps that we used to, with sponsorships,” Denny Hamlin stated via his Actions Detrimental podcast.
“That’s why you’ve seen championship teams go out of business. That should never happen.”
Furniture Row Racing won the championship with Martin Truex Jr in 2017. For 2018, they returned, finishing 2nd in the title run. For 2019, the team folded.
“We want to create a stable business. One that isn’t reliant on sponsorship. That’s what the team’s play is to NASCAR, ‘Invest in us.’ “
“We are the product. You will get your biggest return on value if your teams are healthy.”
“With us sharing in 25% of the TV ONLY revenue. There’s never really been any sort of reward for us going out and selling more tickets.”
“Teams went public last year, with how displeased they were with what NASCAR’s offer was to them. I’ll say, the latest developments, I believe that we will get a deal done. NASCAR and the teams are in a better spot then they were, two weeks ago. There’s still a ton to iron out.”
The charter system
Years ago, NASCAR introduced a charter system. It’s basically their own version of franchises. 36 of them are out there and each team that has one is guaranteed a spot in the 40-car field, at every points paying race.
Hamlin added, “Every fan that I see on twitter hates the charter system. People, the charters have to be permanent. Why would anybody spend any money on a franchise if they know that franchise could be taken away?”
“The charters give us some sort of security that we’re going to be racing. Yes, it does hamper teams from expanding. But, that’s a good thing. We want it to cost money to enter the sport.”
23XI Racing, co-owned by Hamlin is currently interested in expanding to a three-car operation. However, the lack of a third charter hinders those efforts.
“There is no more cutting that the teams can do, to save money. We know what it costs to run a competitive car, we just need more revenue share to do that.”
“The teams and NASCAR were miles apart. Steve Phelps, he has a story to tell, to the France family of why investing in the teams, is the right play. And, I think he’s doing a good job of sending the message.”
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What do the tracks argue?
“Let’s let their side speak now. I’m going to speak for them because I have the mic.”
“They’ll say, ‘We own race tracks. Those race tracks cost a lot of money to run.’ “
“What we’re starting to see though is places like the LA Coliseum. Do we really need to race at fixed race tracks?”
“Now, NASCAR took out a big loan to make these tracks private. SMI did as well. That took an investment to take these tracks private so we could have flexibility in the schedules.”
“But, their franchise profits are high. We just feel like there’s a fair share, a balance there.”
“All other forms of sports, share on all of the revenue. We only share on a small piece of the pie, from one source.”
Tracks have revenue beyond the tv rights via ticket sales, concessions, parking and merchandise. NASCAR teams don’t get a piece of any of that, unlike NBA, NFL and NHL stadiums.
“I think NASCAR has to make a tv deal with us first. I don’t see how you go out and get the most money from a tv partner, if you don’t have your house in order. That’s kind of a weird way to say it. No tv partner wants any interruption in service, whatsoever. Describe that with a definition, however you will.”
“With the teams publicly saying they weren’t happy with the deal. That could throw up red flags for TV.”
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