For a long time, the NASCAR Cup teams have been locked in negotiations with the governing body. This pertains to the charter system that has been in place since 2016, which guarantees a team a place on the grid and a piece of the race purse. Ahead of the 2024 Cup season, it appears that the talks between NASCAR and the teams have broken down.

Following the latest round of negotiations, the teams are reportedly unhappy with NASCAR’s terms. As a result, they have chosen to let the negotiation period expire and not extend it any further. According to a few reports, the chances of the two parties coming to an agreement and striking a deal could be months away. In essence, we will be right in the midst of the 2024 campaign before they come to an understanding.

What did the previous NASCAR charter deal entail?

The previous deal ensured that the Cup teams would earn 25% of revenue. In 2022, the cost of acquiring a charter was around $20 million and would have surely increased since then. With a new TV and media rights deal coming into effect in 2025, teams would naturally want a bigger slice of the pie. This new deal is worth $7.7 billion, so teams want more money to improve their business model.

The lion’s share of the team budget comes from sponsorship, and NASCAR agreed that teams deserve more funding. However, they were entertaining thoughts of imposing a budget cap to help teams curb spending.

Some of the demands include seeking permanent charters and additional revenue. NASCAR’s initial offer was to increase payouts from 35% to 42%, but the teams did not take the bait. It is interesting to note that teams are granted permission to peruse NASCAR’s books to find out the media income. For the 2024 season, projections suggest that teams could earn up to nearly $210M in media rights income. The good news is that the current system doesn’t expire until after the season ends, so time is on their side.

$7.7 Billion TV Deal Spells Good News for NASCAR Charter Teams, Here is Why

What is the new media rights deal that was struck last year?

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This was actually a landmark deal, not just because of the eye-watering $7.7 billion price for seven years. From 2025 onwards, the broadcast will be split between multiple media platforms. The beneficiaries include Fox Sports, Amazon Prime, TNT, Bleacher Report, and NBC/USA Network. This would be the first time that NASCAR is stepping into the streaming service arena, which has been on the rise.

Just recently, NASCAR partnered with Netflix to release a brand new docuseries, which has proven to be a big hit. Coming back to the charter negotiations, everything will most likely be in limbo for a while. That will last until both sides can assess the situation and come up with a solution that will be a win-win for everyone.

WATCH THIS STORY: Kyle Larson Believes NASCAR’s Multi-Billion Dollar Media Rights Deal Is a Step in the Right Direction