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Like any NASCAR team owner witnessing, in person, one of his cars win for the first time, 23XI Racing co-owner Michael Jordan basked in the aftermath of this month’s race at Talladega Superspeedway.
Stock car racing, he said afterward, scratched his competitive itch. He compared the thrill of NASCAR to an NBA playoff game. Images of Jordan celebrating on pit road and in victory lane immediately rocketed around the sports world, generating congratulatory social media posts from the likes of Magic Johnson and coverage on ESPN’s “Pardon the Interruption.”
But beneath the smiles and positive publicity, Jordan and other top NASCAR team owners have been increasingly disillusioned with the pace of negotiations to extend NASCAR’s system of “charters” — which are licenses akin to major sports league franchises that guarantee entry into, and money from, all 38 of NASCAR’s premier Cup Series events.
Though Jordan’s presence alone is a major boost for NASCAR, neither Jordan nor any other representative of 23XI has met with NASCAR chairman and CEO Jim France since last July to discuss the charter negotiations.
“We come from a different world of sports where, if you want to meet with the commissioner, the commissioner is going to meet with you,” said Curtis Polk, Jordan’s longtime financial and business manager. “Because at the end of the day, the commissioner basically works for the teams and the team owners.
“This is totally 180 degrees different. So you have to wrap your head around that and realize: The league doesn’t feel like they work for us. The league doesn’t necessarily feel they’re partners with us, and the league doesn’t necessarily feel like pulling in the same direction because that’s the best direction for all of us as a whole. We’re all not aligned, and that’s not good.”
But France has been meeting with other teams, those willing to accept an invitation to one-on-one sessions and thereby avoid the Race Team Alliance — a coalition of NASCAR teams, including 23XI — and its preferred “Team Negotiation Committee” (TNC). A meeting with 23XI, including Jordan, could happen in the coming weeks.
In the meantime, NASCAR COO Steve O’Donnell participated in a recent panel discussion in which he said a new charter agreement is “very close.”
“Everyone wants to sit down and argue over who’s going to split the money the right way, but ultimately we’ll get to a good place,” O’Donnell said, according to Sports Business Journal.
That assertion was immediately challenged and disputed by some teams — but not all. For this story, The Athletic spoke with owners and/or top executives from more than half of the 15 chartered organizations over the last week about the fraught topic of the current state of negotiations.
Teams have been asking NASCAR to address four “pillars” that are important to them: Increased revenue to help the teams support their operations, making the charters permanent, having a voice in NASCAR decisions to avoid unexpected cost increases, and a share of revenue from new business opportunities.
With NASCAR already committing to increase revenue significantly from a new TV rights agreement signed last November, a major sticking point for now is the length of the charter extension. France has told teams he can only commit to them for as long as someone commits to him — which is seven years, reflecting the new TV deal. But teams want the charters — which have sold for as much as $40 million — to be permanent so there’s no risk of being left with a worthless investment (which currently would be the case if a new agreement is not reached by the end of this year).
“We’re basically tenants in an apartment building,” Polk said. “We have these charters and they give us certain rights, and we have responsibilities because of the rights they give us. But at a date certain — which right now is Dec. 31, 2024 — we have no further rights to renew, and (the charters) could be taken away from us.”
Curtis Polk (left) and Michael Jordan celebrate Tyler Reddick and 23XI’s win at Talladega earlier this month. Their current charters, along with the rest of NASCAR’s, are set to expire Dec. 31. (Peter Casey / USA Today)
NASCAR has publicly said there’s no intent to take charters away, and executives like O’Donnell and NASCAR president Steve Phelps have repeatedly expressed optimism an extension will be reached.
Polk has heard those comments — though not directly — and takes their word for it. But teams are concerned about what happens 10 or 20 years from now, when different people are in charge.
“Could you imagine if Jerry Jones had to periodically renew his (Dallas) Cowboys franchise?” Polk said. “How would you want to invest long-term in a venture like that? Would you invest the kind of money that gets invested in these other sports if you were a tenant who didn’t have rights after a certain date?”
NASCAR declined to comment for this story, but conversations with league sources say there’s high confidence a deal will be reached by the end of the year.
Much of that currently hinges on France. Though the 79-year-old generally does not speak to the media and has never held a press conference to discuss NASCAR since taking over as CEO in 2018, those who have met with France say he’s a traditionalist who is reluctant to stray too far from how his father (NASCAR founder Bill France Sr.) and brother (longtime NASCAR chief Bill France Jr.) would have done things.
That includes giving permanent charters, a request which France has told multiple people is an absolute non-starter. Some teams no longer believe there’s a chance France will budge and have begrudgingly accepted it, others are not ready to concede that point.
That has led to increasing frustration among some older team owners who view the current negotiations as a legacy-making moment where they can ensure some value gets passed down to their families.
Owners strongly believe having charters with no expiration dates would allow them to invest more into their teams — and thus the sport — because the charter values would continue to rise. Though the most recent sale of the least valuable charter was for $40 million, one of the most expensive charters went for just $6 million less than six years ago.
Jimmie Johnson, the seven-time NASCAR champion and now co-owner of the Legacy Motor Club team, cited a line from Hendrick Motorsports owner Rick Hendrick about negotiations: “It’s not about the money — until it’s about the money.”
“Ultimately, there are protections team owners are looking for, for longevity that would absolutely shore things up for them financially,” Johnson said.
Both NASCAR and the teams agree on that much. How they do it is a different conversation entirely.
The current Cup Series vehicle — the so-called “Next Gen” car — has changed how NASCAR teams compete. The Next Gen is a spec model, meaning all of the parts and pieces are purchased from a common, single-source supplier. Teams formerly built their own parts and would spend their way into finding speed, creating a large gap between organizations.
Even with the Next Gen, there are still some major differences in how those teams are run, specifically with team budgets. And for the teams with lesser spending capability, the new charter deal appears as though it could get them close to breaking even (currently, the large majority of Cup teams lose money on an annual basis).
If that’s the case, some of those teams indicated to The Athletic, they’d be closer to accepting a new agreement soon even without permanent charters.
Still, the higher-funded teams who attract big-dollar sponsors and have deep-pocketed owners have more resources. Hendrick Motorsports, for example, has approximately 500 employees and a sprawling, multi-building campus; 23XI just built a state-of-the-art shop called “Airspeed,” which has echoes of Silicon Valley tech company amenities for employees. Meanwhile, the mid-level teams typically operate out of a single building with fewer than 200 employees.
An example of where speed and spending differences can emerge: Although teams buy parts from the same supplier, many will buy more than necessary and scan them for small disparities. Then they will use the best ones in a race and sit on the rest.
Situations like that have prompted NASCAR to float a cost cap, which would help stop teams from spending themselves into the red. But teams collectively won’t even concede on that point, despite some individual owners telling The Athletic they favor it.
Hendrick Motorsports owner Rick Hendrick (left) talks with NASCAR CEO Jim France (right) at the 2023 24 Hours of Le Mans. Both sides remain optimistic a new charter deal will get done. (Chris Graythen / Getty Images)
Meanwhile, France’s divide-and-conquer approach seems to be having an impact. Though the top teams still want its TNC to negotiate on behalf of everyone, NASCAR has no longer shown a willingness to engage with that group. France also reportedly declined an invitation to attend a meeting of all team owners before the Daytona 500 in February, though he has been at the quarterly team owner meetings scheduled by NASCAR.
Instead of dealing with the TNC, France has met individually with many teams, with some smaller organizations feeling they are not in a position to decline. Those who have met with France say they have come away with the impression there could be a “take it or leave it” type of offer coming from NASCAR soon, and no one is sure what the outcome would be if not everyone agreed.
Plus, no one is quite sure what exactly will be offered, because NASCAR has not been communicating with the TNC — which had been sharing details with the teams — while France has told teams in the one-on-one meetings about what he’s willing to do and what he isn’t.
Polk said 23XI and the other teams involved in the TNC (Hendrick, JGR and RFK Racing) have told the other teams they will not sign a charter agreement that isn’t offered to all 15 owners on the same basis. In the current charter agreement, there is nothing that prevents NASCAR from giving various teams different terms instead of the same deal for everyone.
“I would hope that will give all the teams comfort in knowing whether they feel they’re big or small, important or minor in the scheme of Cup racing, their fellow teams are really fighting it out here and have all said they will not sign a charter agreement unless everybody is treated the same way,” Polk said.
But what if they don’t?
Until the late 1990s, NASCAR was not the dominant form of racing in the United States. That title belonged to what is now known as IndyCar (then CART), which drew massive crowds to far more races than just the Indianapolis 500.
But American open-wheel racing went through an infamous split in 1996, when the Indy Racing League was formed to rival CART. The top teams and drivers raced in CART, which kept them out of the Indy 500 (which was part of the IRL). By the time the series ultimately reunified in 2008, irreversible damage had been done, and NASCAR had become far and away the country’s top form of motorsport.
That is highly unlikely to occur in this case. NASCAR and Speedway Motorsports own the majority of major racetracks in the United States, seemingly leaving few options for a place to race if the current charter teams opted to go elsewhere. Meanwhile, no one who spoke to The Athletic expressed panic over a deal being done, and Johnson said in a news conference this month it’s still about “posturing.”
“The clock is ticking, but if you look and see how much time is left, we are just getting into the eighth, maybe ninth inning of what really needs to happen in negotiating for all parties,” Johnson said.
Still, there are fewer than 250 days to strike a new deal, and many say significant hurdles remain, despite the teams’ attempt to jumpstart the process in March 2022.
“I do think at some point, a deal will probably be made because it’s in both sides’ interest,” Polk said. “But there needs to be some compromise.”
23XI driver and co-owner Denny Hamlin celebrates his win Sunday at Dover International Speedway. As the season rolls on, NASCAR’s future beyond 2024 still sparks more questions than answers. (Logan Riely / Getty Images)
Others, though, are more resigned to a lack of compromise. With multiple teams below the top-tier organizations indicating to The Athletic an agreement may not be far off, that could create a mess if some teams are willing to sign a new deal while others hold out. And then what?
Charters require teams to show up for all 38 Cup Series events, but there’s also guaranteed money for doing so. If teams don’t have charters, they do not have to race everywhere (teams took losses on running the Clash exhibition race at the Los Angeles Memorial Coliseum, for example).
“What happens if the 36 cars people are familiar with seeing all of the sudden don’t go every week, and they pick and choose where they go?” Polk said. “And therefore, their favorite driver is not there every week or there’s only 18 cars on the grid? How do the TV partners feel about that? Those are some of the things people have to think about. … That could be the world next year.”
Still, the consensus is — at least for now — a deal will eventually be reached with all parties somewhat dissatisfied with the outcome, a sign of a fair deal.
When will it happen? That may depend on what teams are willing to accept. Without any significant movement on some of the key asks from the teams, NASCAR has continued its one-on-one meetings outside of the negotiating committee and ultimately will present a new — and possibly final — offer.
It’s frustrating for the teams, but there’s also an acknowledgment the stick-to-his-guns CEO isn’t going to see their viewpoint very easily.
“I could have the greatest point I’m debating, with logic behind it,” Polk said. “But if I don’t have any leverage, I’m not going to get very far if the other side doesn’t want to agree with my position. I think that’s where we find ourselves.”
GO DEEPER
How Spire’s ‘Charter Guys’ turned a $6M piece of paper no one wanted into a NASCAR team
(Top illustration of Hendrick Motorsports owner Rick Hendrick, 23XI owner Michael Jordan, 23XI driver and co-owner Denny Hamlin and NASCAR CEO Jim France: Dan Goldfarb / The Athletic; photos: James Gilbert, Sean Gardner, George Walker / Getty Images and Sam Greenwood / Icon Sportswire)
