After criticism of Michael Jordan adviser’s ‘broken’ business model, NASCAR aims for record media deal after NFL secures $100 billion deal

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The NASCAR season ended Nov. 6 in Phoenix, with Joey Logano winning the Cup Series. But if one were to analyze the last 4 before this race, it showed a big change – the changing of the guard.

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The 4 drivers in Championship 4 were quite young. Chase Elliott was the youngest at 26, while Joey Logano was the oldest at 32. These drivers, in the eyes of a neutral onlooker, are the future of NASCAR.

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Not just in sporting terms, but also in terms of fans. Elliott and Logano are among the fan favorites while Ross Chastain made his own fame with the bold move he pulled off in Martinsville to secure a grid spot in Phoenix.

And that partly explains the trend that NASCAR has also seen in recent years. Just taking 2022 as an example, Fox and NBC’s viewership grew 4% year-over-year.

Additionally, Brian Herbst, NASCAR Senior Vice President for Media, explained “Fox had its third straight year of ad revenue growth in 2022. NBC had its second straight year of ad revenue growth in 2022. So it’s working for them, both from a viewership perspective and advertising revenue.”

NASCAR has never been bigger and has never been better. These numbers put Herbst and NASCAR in a very strong position to negotiate the next round of sports media rights.

Currently, Fox and NBC are paying a total of $820 million, but that deal expires in 2024. As the offseason approaches, sources believe NASCAR will try to seek a 10-15% higher price, which equates to $900-950 million a year from broadcasters.

There are a lot of things going in NASCAR’s favor to demand this bounty, however, the biggest thorn in their side will be the current business environment.

NASCAR’s plans have ruffled some feathers among teams and owners

The current business model for teams is all about sponsorship money. Sponsorship funds make up to 60-80% of what teams earn in revenue. But that model is flawed for several reasons, and teams want it to change.

November 6, 2022; Avondale, Arizona, USA; NASCAR Cup Series driver Ross Chastain (1) leads a group during the Cup Championship race at Phoenix Raceway. Mandatory Credit: Gary A. Vasquez-USA TODAY Sports

If Fox and NBC make an offer to NASCAR’s satisfaction, there will be a lot more money in the sport. But even if they don’t, there are others waiting on the flanks to bid. The ball is in NASCAR’s court. They are aware of the demand, given that the NFL just generated over $100 billion in their rights deal.

But the teams believe that the money should be distributed so that everyone gets their fair share. It wasn’t until recently that Joe Gibbs Racing had to let Kyle Busch go when Mars and Wrigley ended their sponsorship. If the cake had been split between the teams, this would not have happened.

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Curtis Polk, advisor to Michael Jordan at 23XI Racing, said “There is a total misalignment of interests. Suddenly, the economic model is broken for the teams… The sustainability of the teams in this sport is not very long term unless there is a fundamental change of model.

He further added, “It’s a wonderful sport. People are in love with it and it makes a lot of money. Let’s be fair about this. Let’s be fair and just. That’s all we ask.

Progress on the front was not positive; Jeff Gordon said after receiving an offer from NASCAR, “We finally got a response from them – and we are very far apart.”

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Watch this story: Billionaire Michael Jordan’s massive $150 million investment was unknowingly influenced by NASCAR’s most successful driver: Here’s how

Other sports have shown the success of a revenue sharing model. If NASCAR has the ability to raise big money, it needs to use it to make the sport more competitive and that can only happen through a pattern along these lines.

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