Since Next Gen, NASCAR retains ownership of racecar parts per lawsuit
Charters in NASCAR act similar to franchises in other sports. 36 were issued and those teams share the revenue generated from NASCAR events.
NASCAR and their teams have been debating on terms of a new agreement, for years. Recently, a new charter agreement was signed. Yet, only 13 of the 15 teams signed that agreement.
The disagreement between those two teams and NASCAR regarding the charter system has reached new heights. A lawsuit has officially been opened by Michael Jordan owned 23XI Racing as well as Front Row Motorsports.
NASCAR lawsuit opened by 23XI Racing and Front Row Motorsports
The lawsuit claims that NASCAR has a monopoly. In the lawsuit, a full list of reasons are given, defending that claim.
In the past, we’ve learned a lot about the inner workings of NASCAR through lawsuits. This one will be no different.
I think most of you are familiar with the fact that NASCAR teams are required to purchase parts from the single source supplier. What myself and perhaps you didn’t know is that even after purchase, the teams do not own the parts fitted to the Next Gen cars.
Why does that matter?
It adds an increased level of difficulty for any team to break away from NASCAR. Per the agreements, teams are not allowed to take parts of the Next Gen car and use them in another racing series, outside of NASCAR.
The parts remain property of NASCAR.
Additionally, the lawsuit states that teams pay $3M a season for parts. And that it costs a total of $18M per year to run a single chartered car, excluding the pay for the driver.
NASCAR teams comment on ultimatum to sign charter agreement
Here’s the section of the lawsuit mentioning the ownership of parts
Section 13 of the antitrust lawsuit:
“Following the 2018 season, NASCAR developed its ‘Next Gen’ car program to exercise additional control over the teams,” the section opened.
“NASCAR has unfettered power to require Cup Series teams to race cars that comply with whatever technical regulations and parameters NASCAR sets. This gives NASCAR the unilateral authority to increase teams’ costs and to force them to buy from NASCAR’s hand-picked single-source suppliers.”
“But with the Next Gen car, NASCAR made not only technical changes to the car’s parameters, it also changed the rules so that each Next Gen car’s parts remain the property of NASCAR. Teams are now required to shell out millions of dollars to purchase the car parts dictated by NASCAR, but they do not retain ownership of these parts and are forbidden from using the cars containing these parts in any other racing event.”
“It costs approximately $3 million in car parts for one chartered team for a full season of Cup Series races. Overall, it costs approximately $18 million per year to run one chartered team (including car costs, travel expenses, etc., but excluding driver salary) for a full season of Cup Series races.”
NASCAR teams sign new charter agreement; 23XI Racing excluded
