NASCAR News: NASCAR’s $7.7 Billion Media Deals Consequences on the Charter Negotiations

Last year, NASCAR announced a landmark media rights deal, worth $7.7 billion. A media rights deal always has a direct implication on NASCAR team charter negotiations, and this was no different. The current deal runs until the end of the 2024 season, and the new one kicks off in 2025. Before that, all of the teams have to renew their charters. Earlier, it was very difficult for the smaller and less funded teams to stick around in the sport for more than a year. If they were lucky, the teams could last the entire season without folding.

Previously, the deadline for negotiations was at the end of December. However, all teams have agreed to extend it even further. This is being done so that everyone can figure out where circumstances put them. One of the biggest points of discussion is the amount of money that NASCAR is offering. This money will be split between all teams, and there will be talks on whether teams can permanently own certain charters. It is also interesting to note that teams can swap charters, and the idea is to encourage performance and allow teams to partake in the revenue.

In essence, NASCAR has eliminated race purses and installed a system where teams are paid based on performance. According to some in the know, the negotiating window has been extended to run through January. Although the new deal is not coming into effect until 12 months from now, NASCAR wants to wrap things up quickly. They are worried that extending negotiations further could distract teams when the upcoming season kicks off.

What is the NASCAR charter system and what does the new deal entail?

The charter system was put into place in 2016 and it provides benefits to several smaller teams. Admittedly, when the system was introduced in 2016, it impacted the driver contracts and forced them to re-negotiate. Before this system was in place, the top 35 in owner points were locked into each race, but that left other teams high and dry. It meant that some teams could turn up for the races, but were not guaranteed to start those races. So with the charter system, not only does it help bulk up the grid, but it can also allow the more competitive teams to stick around. This in turn could help attract more sponsors and the series becomes less of a fight for survival.

Luckily, the new system includes guaranteed annual payment from NASCAR, some governance on sporting matters, and guaranteed starting spots. The negotiating period has already been delayed a lot, from the original July 1st through December 31st of 2023. Unfortunately, the delays were largely due to NASCAR’s talks with networks taking a long time. The new media rights deal is expected to last for seven years and includes Fox Sports, NBC Sports, Amazon Prime Video, Warner Bros. Discovery, and The CW. So far, the amount of money that NASCAR has offered to teams is still up in the air. However, it is believed that the offer will be 42% of the league’s media revenue, up from the current 39%.

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

How much do NASCAR teams earn during a typical season?

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As it happens, teams are normally privy to 25% of the revenue. However, if one factors in elements like prize money, that percentage shoots up to 39%, as per the current deal. Apparently, some teams are arguing about the percentage split of profits, where they are lobbying for close to 45%. For the 2024 NASCAR Cup season alone, teams are expecting nearly $210 million in terms of media rights income.

Once the new deal is in effect, NASCAR will earn $1.1 billion annually. In essence, teams should ideally be granted around $462 million. The charter negotiation is supremely important, otherwise NASCAR has the power to seize charters. So the key to everything working out, is, figuring out how to split #462 million among the 36 chartered cars.

WATCH THIS STORY: NASCAR Might Have Just Saved Themselves With the $7.7 Billion Media Rights Deal