NASCAR Insider Updates on Impending Charter Negotiation as Teams Forced to Pivot Strategy

NASCAR and race teams might be inching closer to a new charter agreement. But with one-half of the penultimate 2024 season of its existing 7-year deal safely in the rearview, the air surrounding an ‘agreement’ has been anything but contentious.

Back in May, NASCAR extended its latest proposal to the Team Negotiations Committee (TNC), which was not well received, to put it mildly. The main point of contention was that the governing body still did not want to issue permanent charters to race teams losing money rapidly in the background of rising inflation. As of last week, the TNC appears to have put their counteroffer up for NASCAR’s consideration.

And long-time NASCAR journalist Bob Pockrass suggests that the sanctioning body’s reply to this revised offer will determine the sport’s future with a definitive timeline.

Teams make a new counter to NASCAR’s offer, leaving many on tenterhooks

With Stewart-Haas Racing’s 2025 foreclosure sending charter discussions into an absolute frenzy, Gene Haas and Cole Custer have brought in tons of contemplation from the collective NASCAR community over the future of these said ‘charters’. Due to four brand-new starting spots emerging in the market, courtesy of departing Stewart-Haas, the price for one of these charters has declined from $40 million at the beginning of the year to roughly $20–25 million at the current moment. Front Row Motorsports recently claimed one of those four entries for an undisclosed price, reportedly in that ballpark.

Former SHR driver Noah Gragson was declared the driver for one of those three FRM cars in 2025. On the other hand, Haas will retain a single Stewart-Haas Racing charter when his former alliance with Tony Stewart finally dissolves. Global media outlets report that after an official announcement in Indianapolis this Saturday, Cole Custer will likely be the driver for Gene Haas’ factory team’s single charter entry. This leaves only two guaranteed spots up for grabs for all potential suitors. Pockrass suggests Trackhouse and 23XI Racing as possible destinations. That is only if a deal becomes permanent before the first race of the 2025 season.

Regardless, all this talk of charters led many fans to probe Pockrass for an update on the impending charter negotiations. According to the FOX journalist, as he shared on Twitter, “The teams just gave a counter proposal last week so will see when nascar responds. How and when likely will determine any timelines to getting a deal done.”

The last part of Pockrass’s update will bear positives for those eager to hear about a deadline for these charter discussions. These developments come days after Denny Hamlin told Kenny Wallace on the latter’s YouTube channel that “It costs us (23XI Racing) $18 million a year to put a car on the racetrack.”

Scaling it down a little bit, a race team spends around a million dollars only on tires for an entire year. Add to that the current revenue-sharing model, which has also been under scrutiny for its outdated 35–39% payout for NASCAR teams on media rights income and purse money over the season—these stats surely paint a picture of heavy losses.

Additionally, the NextGen car’s parts might be durable but rarely re-usable. RFK Racing co-owner Brad Keselowski recently outlined on Kevin Harvick’s ‘Happy Hour’ podcast how the Gen 7 “is a more expensive car.” Moreover, Bob Jenkins, owner of Front Row Motorsports, made a fantastic point to Sportsnaut when he said, “There were 19 teams when we started this system, and there’s seven of them left… “If there is a 50 percent chance of survival in your charter system, you probably need a new charter system.”

All these collective grievances from team owners and fans alike signal one thing. NASCAR must come to terms with the existing system’s “viability” to keep every player happy when they finally bring forth a ‘middle-ground’ desirable for everyone involved. Instead, NASCAR has been stringent and vocal about its motion to run the series without any present members who do not agree to the final agreement. But to keep the fans hooked, the sport requires all its teams and existing stakeholders to remain, not a specific group of participants selectively chosen by the sanctioning body.

Regardless, it also appears that said sanctioning body is making its due arrangements to prepare for what could potentially be a soon-to-come charter agreement with some radical changes.

The Sanctioning Body revamps its backroom staff for a new era

Trending

Despite 2023 Disaster, Chase Elliott Risks Angering Rick Hendrick by Choosing Alex Bowman’s HMS Banned Tactic

What Is Left of Denny Hamlin’s Depleting Core After Having to Deal With a Nearly $70 Billion Loss?

NASCAR Rumors: Corey LaJoie’s Cup Future Dependent on ‘$’ Amid Rick Ware’s Hopes of Tony Stewart’s SHR Replay

NASCAR Rumor: Handed $25,000 Fine, Xfinity Star Could Replace Chevy’s Rejected Prodigy

“To the Death”: Kyle Busch Offers Martin Truex Jr. a Rare Alliance to Survive ‘Hunger Games of NASCAR’

Before these most recent updates, NASCAR was willing to offer race teams another 7-year agreement on ‘permanent charters’. With an option to extend for another 7 years when the brand-new $7.7B media rights deal involving FOX, CBS, Amazon Prime, and Turner Sports expires at the end of 2032, NASCAR also wishes to be able to purchase a charter for themselves, hoping to field a team, similar to their IMSA ventures with Action Express Racing.

The proposition also wishes to put in place a spending cap to regulate race teams’ expenses with total transparency in front of NASCAR. And finally, the governing body has been open about not wanting to offer permanent charters.

Contrastingly, the TNC has asked for nearly half of NASCAR’s $7.7 billion in media revenue starting in 2025, with a 33% increase in all income combined. Plus, the race teams have also demanded a deciding voice in all decision-making policies mandated by the governing body. Yet, speculatively, their biggest request till now has been a permanent charter.

A permanent charter would guarantee that existing teams field their entries without having to pay their way into races every single year. It would help to follow the norm in spectator sports, where teams belong to a “league” and compete against each other for the collective benefit of themselves and the organization. NFL and NBA are some examples of this ‘franchise’ format.

But to keep up with the times, NASCAR Holdings has made a huge shuffle behind the doors. A new “venue and racing innovations” department has been conceptualized. It will be led by former SVP of racing development and strategy, Ben Kennedy, the great-grandson of Bill France Sr. himself.

According to Forbes, “The new division will be a combination of the scheduling and facility development groups, putting the two together with Nascar’s consumer strategy division.” The reports also mention that President Steve Phelps will have heightened roles of responsibility, with several promotions and layoffs taking place within their operating backroom staff.

Additionally, NASCAR has promoted Tim Clark to Executive Vice President and Chief Brand Officer from his previous role as Senior Vice President and Chief Digital Officer. And former SVP of Chief Communications and Social Responsibility Officer Eric Nyquist has become their new senior vice president and chief impact officer. All three men will be reporting to NASCAR COO Steve O’Donnell.

This move has been primarily brought about by the sanctioning body being better equipped and staffed to handle their shift from two media partners to five next year, as per Jayski. But will these changes soon result in some more for the very race teams that bring all the action that viewers witness for NASCAR’s broadcast profits? As Bob Pockrass hints that significant changes are on the horizon. Whether these changes will be positive or negative remains to be seen, keeping everyone on edge and eagerly awaiting more updates