Among all the complaints filed against the NASCAR leadership this year, one stands out as ever-arching. Outside of missing pylons and underperforming Cup cars, the race teams’ future lies at stake. With discussions about the charter system and media rights deal taking center stage, teams have evidently been in a dilemma.

What’s more, the executives are denying the teams’ foremost demand to make the charters permanent. This would significantly attract sponsors, who contribute 60-70% of a team’s revenue. However, since Jim France and Co. are not budging from their stance, a Spire Motorsports owner predicted uncertainty over their financial future.

Team owner drops an omen amidst NASCAR’s ignorance

As NASCAR signed the $7.7 billion media rights deal with media bigwigs like Fox Sports, NBC, Warner Bros Discovery (WBD), and Amazon, it seems there’s not much for NASCAR teams to look forward to. While, currently, teams receive 25% of the total, with tracks getting 65% and NASCAR 10%, the organization has been at loggerheads with owners as the latter has been demanding a greater share of the profit. However, the talks have mostly reached a dead-end. 

Hence, with such a glaring gap in expenses, teams often rely on sponsors. But the load gets too heavy sometimes, as Kelley Earnhardt Miller recently stated in a ‘Dale Jr Download’ episode. “It gets disappointing when your sponsor can’t activate. They have the dollars to come into the sport, but then they can’t take their program on the road with you…Not saying that the tracks don’t need the money, but somehow we need to figure out what works for everybody.” Then she dropped an interesting insight: “Cause…I have seen the sponsorship graveyard through the years.”

Spire Motorsports co-owner Jeff Dickerson picked up from this cue. He outlined the need of the hour: “It’s really gotta be a combination of interest”. Then Dickerson offered possible solutions to this dilemma, highlighting the need to align monetary interests. “At the race tracks, it’s the team sponsors that are buying those seats, team sponsors are doing hospitality…we need to come up with something where they don’t feel so taxed…These relationships are so fragile, you know what I mean.” 

But achieving this seems to be a downright puzzle at the moment, as NASCAR’s stance is depriving teams of enough revenue. Even Hendrick Motorsports, the winningest team at present, has not made a profit in a while. Unless the higher-ups concede to the ongoing charter demands, Dickerson warned about another sponsor ‘graveyard’. “You just don’t know when they’re going to go crashing into that graveyard, right?”

This poignant issue has been highlighted by 23XI co-owner, Curtis Polk as well, who compared it with the NFL.

Race teams stand on brittle ground

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Other sports host permanent teams like the New York Yankees or the Los Angeles Lakers. However, it’s an entirely different ballgame in NASCAR. Race teams can lose charters and potential investors if they fail to put their cars on the tracks or perform poorly. Then the costs add up: hauling cars, flying the teams around the country, hospitality suites, etc. for which the sponsors come. So this vicious circle ultimately jeopardizes the future of teams.

Curtis Polk, Michael Jordan’s longtime financial and business manager, compared the NASCAR team’s misery with the NFL. “Could you imagine if Jerry Jones had to periodically renew his (Dallas) Cowboys franchise? How would you want to invest long-term in a venture like that? Would you invest the kind of money that gets invested in these other sports if you were a tenant who didn’t have rights after a certain date?”

Hopefully, the tenants of NASCAR charters are granted permanent status soon, as the clock is ticking for the current media rights deal.