The current Cup Series business model is ‘broken’ and future sustainability ‘could be a real challenge’

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NASCAR Cup Series teams say the current business model for American stock car racing needs to be changed, and the teams and NASCAR are far apart on how revenue should be split.

23XI Racing’s Curtis Polk even went so far as to say that NASCAR’s business model is “broken”. The teams that make up the Race Team Alliance spoke in Charlotte on Friday and said they wanted a bigger share of TV revenue to help their bottom line. Teams say they receive less than 10% of NASCAR’s total revenue.

From the Associated Press:

“The business model is really broken for teams,” said Curtis Polk, who as longtime business manager for Michael Jordan now owns a stake in the Charlotte Hornets and two-car team 23XI Racing Jordan and Denny Hamlin in NASCAR.

“We’ve gotten to the point where teams are realizing that sustainability in sports isn’t very long term,” Polk said. “It’s not a fair system.

The Race Team Alliance was formed nearly a decade ago among most of NASCAR’s top-tier teams to have better bargaining power for trade deals and other bargaining efforts. NASCAR’s current multibillion-dollar television deal is up at the end of the 2024 season, and the RTA said it recently submitted a proposal to NASCAR regarding a different split for 2025. The RTA said Friday that NASCAR was unwilling to move much on the current revenue split.

NASCAR teams want more money because they think the current economic situation is unsustainable. NASCAR introduced a new Cup Series car in 2022 in hopes of reducing long-term costs for teams. But the teams spent a lot of money initially building new cars from scratch and will likely spend more than they imagined in the future to improve car safety. The 2022 Cup car proved to be less safe than its predecessor due to its stiffness; three full-time drivers are expected to miss Sunday’s race at the Charlotte Roval due to crash injuries.

Four-time Cup Series champion Jeff Gordon is now an executive at Hendrick Motorsports and was one of four team representatives who spoke to the media on Friday. Gordon said he had “a lot of fears that sustainability will be a real challenge” for NASCAR teams in the future.

Teams fear they will have to make significant job cuts if the current revenue-sharing system does not change.

Sponsorship is currently the revenue base for the majority of team budgets. And sponsorship has been increasingly difficult to come by as television ratings and interest in NASCAR have steadily declined over the past decade. Sponsor heavyweights like Lowe’s, M&Ms, Target and Miller Coors have either cut their sponsorship of teams sharply or left NASCAR altogether in recent years.

Diminishing fan interest could also lead to an upcoming television deal that’s less onerous than the current one. While live sports programming is even more of a centerpiece of television network programming, NASCAR is a far cry from the ratings it once was in the early 2000s or even five seasons ago.

Ryan Blaney (12) leads the field through the tri-oval during a NASCAR Cup Series auto race on Sunday, Oct. 2, 2022 in Talladega, Ala. (AP Photo/Butch Dill)

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