NASCAR’s “Cost Containment” Tactic Might Be the Best Route for Teams as Charter Negotiations See No End

NASCAR has been back and forth with its teams over the last several months about the state of the charter agreement when 2024 sees red. In the entire time that the promotion’s executives have negotiated with team owners, there hasn’t been any significant progress with the latter asking for permanent charters amongst other concerns.

Despite the slow pace of movement, things seemed to be turning upward when NASCAR President Steve Phelps gave his “State of the Sport” address earlier this month. Though he had underlined that teams were happy with the way discussions were going, weeks later he himself now seems to be in the blue about the exact moves that ought to be taken to find common ground.

NASCAR top man Steve Phelps proposes “Cost Containment” to meet strong demands

Talking during the Race Industry Week on Monday Steve Phelps gave an overview about where things stood on the table with his officials and team owners. Putting the teams’ demands open to the world, he mentioned there were three things that had been asked of him. He said, as reported by speedsport.com, “They want to be competitive on the race track, which right now is a check. They want to increase the enterprise value of charters and that has been a check, and they want a path to profitability. That’s not a check right now.”

Acknowledging that the final demand was a matter of concern, he also proposed solutions to tackle it. Putting forward two potential routes that could be taken, he spoke about increasing the revenue that they got from the promotion and media deals, and second, cost containment. While the former is something that is yet another matter of chaos in NASCAR’s HQ with the NBC and Fox deals ending in 2024, the latter can be controlled.

Phelps continued, “Whether that is in the form of a cap or whether that is in the form of the parts and pieces that make up the Next-Gen car, trying to limit those pieces.”

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How much could cost containment help the teams break even?

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Cost-cutting is something that has already been pretty aggressive in the past in NASCAR. Track times and race weekends themselves are much shorter than what they used to be as a measure to reduce running costs. The reduction in the horsepower of the Next-Gen car too was attributed in part to lower costs for teams. With many such moves already impacting the racing experience negatively, there aren’t many spaces for Phelps to point out for further cost containment.

However, with the chances of additional revenue being a grey cloud for now, juicing out areas for cutting costs might be the only way forward for NASCAR outfits. Despite proposing the only potentially viable solution for now, the President quickly tracked back in fear of criticism. Protecting himself, he said, “I am not saying our teams can cut their way to success. I am not suggesting that because I have been accused of that in the past. There needs to be a mixture of those two things [Cost Containment and Additional Revenue Generation], but both are important if breaking even is important to our teams.”

Though he spoke of the checked and unchecked boxes in his latest appearance, Phelps did not provide an update about making charters permanent. Considering that teams have put the idea forward strongly in the past, we are yet to see where things stand on that front. For now, the only thing that is in the control of teams is “cost containment”, and that could be the only way out until we get further clarity.

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