Growing tension has emerged between NASCAR and its teams despite efforts to collaborate more in recent years.
NASCAR stakeholders have worked to improve the team owner model to make the sport more valuable to current investors and attractive to prospects. That included implementing the charter system in 2016 for team owners in the Monster Energy NASCAR Cup Series to form enterprise value. It’s also included working collaboratively on issues ranging from marketing, to rules changes, to controlling costs.
But several team owners and their top executives are frustrated by the slow pace of change, which has strained their relationship with NASCAR. This comes as this year’s season has seen a continued drop in attendance and ratings, which has ratcheted up the pressure for more dramatic change.
It also comes as the sport faces critical negotiations in the next couple of years.
NASCAR’s France family has been eyeing a sale of a stake of the company and has hired Goldman Sachs to assist. The first term of the charter agreement between NASCAR and teams ends in 2020, which could spur talks on how the sport distributes media revenue. And the five-year sanction agreements between NASCAR and tracks also end in 2020, opening up the possibility of major changes to the sport’s schedule.
“For a sport based on speed, it’s ironic that we are not nimble and fast enough to quickly make changes,” Andrew Murstein, majority owner of Richard Petty Motorsports, wrote in an email. “I believe we are moving forward and are on the right path … but I would like to see it happen sooner rather than later.”
The environment is so sensitive that most team executives and people close to them either declined comment or offered only to speak on background. NASCAR did not comment for this story.
The issues causing frustration include cost controls, the feeling from some that NASCAR needs to run fewer or shorter races and do so at different venues, questions about NASCAR’s long-term management plan, and a perceived lack of cohesiveness over new initiatives.
One team executive said that while the potential to renegotiate the sport’s revenue split is a sexy topic, it’s just one of three major pillars on which teams are focused.
The second is to slash expenses and do more joint marketing. NASCAR has started to implement some cost-cutting measures, such as moving to universal air wrenches. But even that has led to issues, with some teams accusing the new spec pit guns of malfunctioning. Team owner Joe Gibbs said he told NASCAR he wasn’t a fan of the new rule. Joe Gibbs Racing reportedly spent heavily to develop faster air guns for quicker pit stops.
Sources said multiple team owners have pushed NASCAR’s leadership, led primarily by President Brent Dewar and COO Steve Phelps, for greater change. Teams are working particularly hard to find ways to lower costs, and some even want to introduce a budget cap on how much teams can spend per car annually. A team source involved with meetings between the teams and NASCAR pegged the potential cap at between $15 million and $20 million per car, but questions remain about whether owners truly could agree on a cap and how NASCAR would govern it.
Meanwhile, while innovation, experimentation and disruption are buzzwords throughout sports, team executives are frustrated by the sport’s inability to change, such as trying midweek Monster Energy Series races. Some believe the series could have tested these as early as this year, but now, with the 2019 schedule already out, there won’t be any until 2020 at the earliest.
In NASCAR’s defense, sources say some senior executives at the sanctioning body are interested in trying midweek races; the opposition appears to mostly be coming from track owners fearful of losing ticket revenue. There also have been instances where NASCAR has appeared frustrated with the slow pace of change of other stakeholders, such as when NASCAR competition executive Steve O’Donnell tweeted two weeks ago that having no Monster Energy Series drivers race in the second-tier Xfinity Series “should be the norm.” Some Xfinity teams have resisted such an idea because they leverage appearances and name recognition by Monster Energy Series drivers to help sell sponsorships, even though that has diluted the series’ developmental mantra.
Team executives are more interested in experimenting with a midweek race to increase TV ratings than concerned about possibly lower attendance, the latter of which being tracks’ main opposition.
Some team executives are now turning their attention toward getting midweek dates on the 2020 schedule. The thought has been to try them at tracks that are closer to cities and thus less dependent on camping revenue than more rural tracks.
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