NASCAR Teams Warn of "Broken" Economic Model

Top NASCAR teams are unhappy with the series' current business model, calling it "broken" and warning that it has little long-term sustainability, according to an Associated Press report on Friday.

As the top NASCAR Cup series holds playoff races on Charlotte Motor Speedway's road course/oval hybrid "roval," the teams say they have disclosed a year-long dispute with NASCAR over unfair revenue sharing. [Curtis Polk, Michael Jordan's business manager and part owner of the 23XI racing team he started with NBA legend Denny Hamlin, will negotiate with NASCAR on behalf of the teams, the Associated Press reported In a presentation to the Race Team Alliance, he said, "The economic model is really broken for the team."

The presentation was made by a four-member subcommittee consisting of representatives from 23XI, Hendrick Motorsports, RFK Racing, and Joe Gibbs Racing (JGR). Jeff Gordon, vice president of Hendrick Motorsports and a four-time champion, said the team has not had a profitable season in years. That's despite Hendrick drivers Chase Elliott and Kyle Larson winning the 2020 and 2021 Cup Series championships, respectively.

"There is a lot of concern that sustainability is going to be a real challenge," Gordon said.

Unlike Formula 1, where teams actively negotiate with management for revenue sharing, NASCAR is essentially a private company controlled by the French family, which has the most influence. Television revenues are officially split between NASCAR, the teams, and the circuit, and NASCAR gets 93% of it, as opposed to Formula 1's 50/50 split, Polk said.

NASCAR introduced a "charter" system in 2016, essentially a limited quota of 36 cars that teams can buy and sell, but teams rely primarily on unpredictable sponsorship deals for funding. That unpredictability was highlighted by the withdrawal of Mars, NASCAR's sponsor since 1990. This left JGR scrambling to find a sponsor for two-time champion Kyle Busch, who subsequently signed with Richard Childress Racing and left JGR after 15 seasons.

NASCAR has also come under fire from drivers who blame the stiffness of the new Next Generation cars for the number of injuries in recent races and the current absence of three full-time drivers. The Next Generation cars, which are currently in their debut season, are the first new NASCAR racers since 2014 and bring the Cup Series closer to other racing series by introducing hardware such as sequential transaxles and center-locking wheels.

In addition to the next-generation cars, NASCAR is considering other changes to the traditional format, with the Cup Series' first Chicago street race scheduled for July 2023. Organizers are also reportedly considering a hybrid powertrain and an electric racing series alongside the Cup Series. However, underfunded teams and potential safety issues seem to be the first issues NASCAR must address if it is to survive.