Behind the fast-paced and entertaining sport that NASCAR is, there is a lot of finance that is managed to keep the show running. NASCAR recently signed a $7.7 billion deal to distribute the media rights to FOX, NBC, Amazon, and Warner Bros. Discovery, and now, teams are trying to understand if they are going to get a bigger chunk of the funds.

NASCAR sends funds to teams based on many factors, and the number of charters that a team runs is one of the biggest among them. Having more sponsors means a team can build better cars and hire better crew and drivers and the more charters, the more sponsorship money teams receive. In a recent conversation with Kevin Harvick, NASCAR president Steve Phelps broke down his views on charters as teams like 23XI Racing and Spire Motorsports made their point about having a permanent revenue stream.

Steve Phelps is ready to listen to the teams about charters

On the latest episode of Kevin Havick’s Happy Hour, Steve Phelps was asked about where NASCAR will be going with the teams and charters in the future. Phelps obviously has thoughts over this issue, as he explained, “Do I believe the charters will be extended? I do. Do I think it’s important that they’re extended? I do. I think it’s in the best interest of the sport that the charters are extended.”

The president then explained how “healthy race teams put on better racing” before explaining the three things that NASCAR is interested in. The three things being, “able to compete on the racetrack in a stronger sense, so more opportunities for those in the middle or the back of the grid to be more successful as part of what an extension would look like.”

Currently, NASCAR teams are struggling to be profitable, while some are not even breaking even. This is the main concern that Phelps is looking to tackle, and he explained his stance by saying, “Our proposals for a while now have all had a significant increase in revenue that would go to the race teams.” In the end, it will be the decision of Jim France and the team to find a conclusion to teams feeling underfunded.

After acknowledging that controlling costs at this point will be vital for the sport, he spoke of what the teams want at this point. As of now, according to Phelps, the teams want a seat at the table, and rightfully so. Ultimately leaving it up to the sanctioning body to make the decision, he stated, “I think there’s been movement on both sides and then I think you’re in a position right now where both sides don’t want to move a lot further. So what’s the middle ground where those two intersect and overlap? That’s where the deal happens.”

The main problem with the charter system

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Teams are feeling the squeeze from a system that was only introduced in 2016 but has quickly become a significant point of contention. The idea behind charters was to offer teams guaranteed spots in all 36 races of the season, but it’s created a financial crunch that’s particularly tough on newer teams like 23XI Racing and Spire Motorsports.

With the sport’s massive $7.7 billion media rights deal, teams are clamoring for a larger share to help cover the soaring costs of maintaining their guaranteed starting spots. Even seasoned veterans like Jeff Gordon have chimed in, stating that Rick Hendrick’s team hasn’t seen significant profits in years, which only explains how dire the situation must be for new teams.

Amid this dissatisfaction, Spire Motorsports’ Jeff Dickerson has advocated for making charters permanent, aligning his views with Michael Jordan’s critique of NASCAR’s economic model. With permanent charters, team owners might be more willing to invest in their businesses and nurture young talent, as it would make their financial commitments more stable and attractive to outside investors.

With the upcoming broadcast deal expected to boost earnings significantly, there’s hope that the charter system might evolve into a more beneficial arrangement. With that said, do you think that teams will get to reap the benefits of the new media rights deal? Share your thoughts in the comments below.