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NASCAR team calls revenue model ‘broken,’ warns of layoffs


CHARLOTTE, NC –

The strongest teams in NASCAR warned Friday that the venerable classic racing series has a “broken” economic model that is unfair and offers little or no chance of long-term stability, an announcement Great newspaper added to the growing list of woes.

The Cup Series will head into the Charlotte Motor Speedway knockout on Sunday with three full-time drivers sidelined with injuries in NASCAR’s new car and with no clear answers on how to fix those problems. safety concerns.

It got much worse when the teams made public their year-long battle with NASCAR over fair revenue distribution.

Curtis Polk, who is Michael Jordan’s longtime business manager, currently holds an ownership stake in both the Charlotte Hornets and Jordan and Denny Hamlin’s 23XI Racing team at NASCAR, said: “The economic model has really worked. broken for teams.

“We’ve come to a point where the team realizes the sport’s sustainability isn’t long-term,” Polk said. “This is not a fair system.”

The Racing Team Alliance was established in 2014 so that the teams have a unified voice in negotiating with the sanctioning authority. A four-member subcommittee presented their concerns at a Charlotte hotel, featuring Polk, Jeff Gordon, four-time NASCAR champion and Hendrick Motorsports vice president, RFK Racing President. Steve Newmark, and Dave Alpern, president of Joe Gibbs Racing.

Hendrick and Gibbs have won six of the last seven Cup Series championships since 2015, but Gordon said the four-car Hendrick lineup, the strongest in the industry, hasn’t had a profitable season in years. It will again lose money this season even though NASCAR has cut costs on the Next Gen car.

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

Led by Polk, whose role with the Hornets brought familiarity with the NBA’s franchise model, the RTA introduced NASCAR in June with a seven-point plan for a new revenue-sharing model. “The proposal has been there for months, and we’ve told NASCAR we’d like an opposing party,” Polk said.

He did not reveal seven points other than noting that sustainability and longevity of the team are priorities. The commission said on Friday that it was open to all ideas, including such spending limits in Formula One.

“We can accept anything that brings us to a new conceptual structure,” Newmark said.

NASCAR reacted to RTA last week with a counterpoint to “increasing minimum revenue and emphasizing cost-cutting,” Polk said.

The group union agrees that the only place left to cut costs is to lay off employees.

“We’ve had significant cuts,” Alpern said.

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

The cost battle has gone public with five races remaining to be crowned NASCAR champion in 2022.

This problem has been simmering for years, and in 2016 NASCAR adopted a subscription system for 36 cars as close to the franchise model as possible in a sport founded and owned by the French family. independent property. The regulations at least provided the teams with something of value to hold – or sell – and protect their investment in the sport.

The team business model is still heavily reliant on sponsorship, which teams must insure themselves. Newmark says funding covers between 60% and 80% of the budget for all 16 run organizations.

Because sponsorship is so important, teams are hungry for financial relief elsewhere and have asked NASCAR to “distribute from the league to cover our base costs,” Newmark said.

The current charter agreement expires at the end of the 2024 season, around the same time NASCAR’s current TV contracts expire.

Although the TV money was split between NASCAR, the teams, and the tracks, the committee found that the value of the teams was only 7% while the races and NASCAR had 93% of the value. Polk notes that in Formula One, all revenue is split 50-50 between teams and series ownership.

Mars Inc., the company that first joined NASCAR in 1990, late last year decided this season would be the last, and JGR has spent the past nine months trying to find a new sponsor to keep Kyle. Busch, the only man to have won multiple championships at the Cup level. Busch has since signed with Richard Childress Racing and will leave JGR after 15 seasons as Toyota’s NASCAR winning driver.

“We became full-time fundraisers,” says Alpern. “Instead of working with our business, we’re raising money just to survive.”

Polk said the teams will honor the charter agreements through 2024. But when negotiating a new charter agreement, the teams are asking for more.

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

NASCAR is currently under attack from all sides as drivers remain angry about some of the recent penalties and the stiffness of the new Next Gen vehicle is blamed for unprecedented injuries. What should have been the usual collisions with walls sent both Alex Bowman and Kurt Busch concussions, and Cody Shane Ware opted out of Sunday’s race because of a broken leg.

NASCAR has been testing potential tweaks to the car and will present the findings to drivers on Saturday morning ahead of the practice in Charlotte.

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