By Bob Pockrass
FOX Sports activities NASCAR Author
CHARLOTTE, N.C. — Representatives of groups negotiating with NASCAR to attempt to get a rise in revenues distributed by the sanctioning physique say their proposal was rejected final week, and the perimeters are far aside.
The 4 members of the Groups Negotiating Committee — Hendrick Motorsports co-owner and vice chairman Jeff Gordon, 23XI Racing co-owner and Michael Jordan enterprise associate Curtis Polk, Roush Fenway Keselowski president Steve Newmark and Joe Gibbs Racing president Dave Alpern — met with the media Friday morning to air their issues.
They mentioned their seven-point revenue-sharing proposal despatched to NASCAR executives in June didn’t obtain a response till final week. Their hope is to have a deal accomplished to extend revenues efficient in 2025, which is when the still-to-be-negotiated tv deal would go into impact together with a still-to-be-negotiated constitution settlement between NASCAR and the groups, which might decide income allocations primarily based on components similar to taking part in each race, ending positions in races and the ultimate standings.
“We introduced a proposal that we labored with them on in find out how to give you that seven-point proposal,” Gordon mentioned. “We waited. We lastly did get a response from them. And we’re very far aside.”
The committee wouldn’t give specifics on the proposal or the response. The groups say they’re prepared to surrender some rights with regards to social and digital to permit for sports activities betting and content material licensing.
“After ready three months and constantly asking them to please reply as a result of our house owners have been shedding their endurance, we acquired a proposal with a minimal enhance in income, and the emphasis was on chopping prices dramatically,” Polk mentioned.
“The price of the automobile is considerably fastened. What would that result in? That might result in large layoffs at our groups.”
NASCAR launched an announcement indicating that it’s going to proceed to work with the groups to discover a resolution.
“NASCAR acknowledges the challenges at the moment going through race groups. A key focus transferring ahead is an extension to the constitution settlement, one that can additional enhance income and assist decrease staff bills. Collectively, the aim is a robust, wholesome sport, and we’ll accomplish that collectively.”
Workforce house owners and executives have typically complained concerning the economics of the game, and the constitution system has given them some worth after they need to promote their groups. What they mentioned they’re searching for is a income mannequin during which the distributions from NASCAR cowl the prices of constructing automobiles and paying labor aside from the motive force.
Gordon mentioned Hendrick Motorsports gained’t become profitable this yr, and “it’s been some time” because it has.
“We’re pleased with not making a large revenue. We might go together with that,” Gordon mentioned. “However proper now, it simply goes again to all it takes is one sponsor to step away, and we went from possibly getting near breaking even to not even shut.”
The groups obtain 25% of the tv income — 2022 is the eighth yr of a 10-year, $8.2 billion deal — whereas the tracks get 65% and NASCAR will get 10%. NASCAR, owned by the France household, owns nearly all of the tracks.
Groups depend on sponsorship for almost all of their income. The committee mentioned groups at the moment are producing 60-80% of their income from sponsorship, in comparison with 8-12% for MLB groups and 17-18% for NHL groups.
When M&M’s introduced final yr that it might not return as a sponsor for JGR and the automobile pushed by Kyle Busch, the group noticed negotiations with Busch for a brand new deal collapse. Busch introduced final month that he would transfer to Richard Childress Racing subsequent yr.
“It had a huge impact on the end result of that state of affairs, for certain,” Alpern mentioned of shedding a sponsor. “I believe we have all been keenly conscious of this for a very long time. That is simply most likely one instance.”
Within the sport, 16 organizations personal the 36 charters. A constitution is NASCAR’s model of a franchise, because it ensures a spot in each Cup race however doesn’t include any possession within the league. The committee mentioned the groups’ total worth is simply 7% of the whole worth of the trade.
“The game is a sleeping big,” Polk mentioned. “However all of us should get the pursuits aligned as a result of we have to develop it collectively. We have to create extra income. We have to create a larger sharing association the place each greenback that is created advantages drivers, advantages groups, advantages tracks, advantages NASCAR.
“That’s not the way it’s arrange proper now. So when you’ve got this misalignment of curiosity, how may you get everyone transferring in the identical path?”
Polk is the relative newcomer of the group, as he has been concerned within the sport for under two years. Alpern has been with JGR since its inception 30 yr in the past. Gordon is a four-time Cup champion driver whose first profession begin got here 30 years in the past. Newmark has been concerned within the sport for many years and assumed the president function at Roush in 2010.
Having Polk concerned seems to be key, as he can deliver a little bit of an out of doors voice in negotiations whereas lots of the others have sturdy relationships with NASCAR management.
“There are a number of long-term relationships which have made it difficult to have all these formal discussions or this stage of discussions,” Gordon mentioned. “This isn’t a brand new dialogue. House owners have had this dialogue at excessive ranges for a lot of, a few years.
“And so they simply have not actually materialized or gone anyplace. And I believe that … the timing is true for us to get collectively and make the most of a brand new relationship like Curtis to get us to that place the place we’ve bought to place our foot down of what’s proper.”
Bob Pockrass covers NASCAR for FOX Sports activities. He has spent a long time masking motorsports, together with the previous 30 Daytona 500s, with stints at ESPN, Sporting Information, NASCAR Scene journal and The (Daytona Seaside) Information-Journal. Comply with him on Twitter @bobpockrass, and join the FOX Sports NASCAR Newsletter with Bob Pockrass.
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