Michael Jordan: NASCAR is 'going to die' without permanent charters
NASCAR and race teams remain embroiled in negotiations on a new charter agreement, with the current agreement coming to an end after the 2024 Cup Series season.
Both sides have been at a standstill of sorts for the past two years and appear to be far apart on a deal. At the root of the matter, race teams’ fight to secure permanent charters. Under the current model, charters are not permanent franchises like the setup in other professional sporting leagues. Team can lose their charters due to poor performance on the racetrack or failing to field their cars week in and week out. As a result, most race teams lose money on a yearly basis.
23XI Racing co-owner Michael Jordan told The New York Times that NASCAR will “die” if the sanctioning body doesn’t offer permanent chargers to race teams due to the negative economic impact.
“If you had permanent charters, then you could create a revenue stream, either with new investors or different types of sponsorships that would subsidize that type of variance between ownership and the league,” Jordan said. “That’s a big, big miss right there. If you don’t correct that, this sport’s going to die not because of the competition aspect, but because economically it doesn’t make sense for any business people.”
Among other issues at hand, the amount of revenue sharing taking place between the racetracks, race teams and NASCAR itself. Race teams currently get 25% of broadcast revenue, tracks 65% and NASCAR 10%. Race teams are hoping to secure at least half of the revenue TV brings in. NASCAR notably announced $7.7 billion in media rights deals with FOX Sports, NBC, Warner Bros. Discovery and Amazon for 2025-2031.
NASCAR revenue increasing, race teams want more of it
NASCAR has offered race teams more of a slice of the revenue from the new broadcast deal but is only willing to renew the charters for seven years. Race teams argue that by not having permanent charters, it makes it more difficult to attract outside investors and invest in their operations.
Jeffrey Kessler, a leading antitrust lawyer who has previously represented the NFLPA and other unions, said that the race teams “won’t take an unacceptable deal.” Kessler said that one option is teams forming their own race series. Should NASCAR attempt to restrict their access at racetracks across the country, Kessler says “they open themselves up to antitrust violations.”
One of the 15 Cup Series teams which has yet to make a return on their investment is 23XI. Formed in 2020, 23XI expected to incur losses initially, but make it back as NASCAR’s revenue increased. With NASCAR reluctant to share much of its growing revenue, Jordan said it’s been far from a healthy partnership.
“In all partnerships, if you grow the pie, that means your business is going to continue to grow,” Jordan said. “And to grow the pie, you’ve got to make sure everybody’s healthy within the partnership. If our ownership in NASCAR is losing money and NASCAR’s the only one making money, that’s not a good partnership.”