This week, there was a big reveal by Sports Business Journal of some big changes in the inner workings of NASCAR.
I won’t bore you with too many details. Layoffs are happening, because it’s a company whose only goal is to make more profit. The only France family member who is mentioned in the memo is Ben Kennedy, who is now an EVP. It’s not a surprise to see the young France ascending through the company after a number of scheduling successes in recent years, most notably in Chicago and Los Angeles.
There was a sentence in the article, however, that induced a massive groan on my end.
“NASCAR is showing teams it’s making changes at a time when it’s asking them to tighten their spending.”
What changes?
The teams have been making the point for years now that the current sponsorship-based business model is failing and that there needs to be a big increase in the amount of the television contract they will be receiving from NASCAR.
This has been a problem for many years now. To illustrate this, let’s go all the way back to right before the 2013 season. Then defending Cup champion — and now team owner — Brad Keselowski gave a long interview with USA Today.
Keselowski has always been opinionated, and reading the article now is an interesting time capsule. There are some things he’s completely off on, most notably that Instagram did not end up being a fad. But he was right then and is still right 11 years later on the current sponsorship model.
Keselowski introduces his various opinions on NASCAR with the following:
“The problem I see in the sport is that there are multiple entities that have to work together for us to be successful.
“We have sponsors — partners, or whatever the hell you want to call them — tracks, the sanctioning body and the teams. Those are our four groups, and how well they cooperate dictates what we have as a product for our fans.”
In the years since, this has changed somewhat. NASCAR purchased International Speedway Corporation in 2019, followed up by Speedway Motorsports, LLC going private a year later.
What this means is that there are essentially only three groups now: sponsors, tracks and teams. With the sanctioning body now directly owning or promoting tracks that host 20 of the 38 Cup races, that firmly puts it in the track group. Although there is a race hosted by a team (this weekend’s race at Indianapolis Motor Speedway, owned by Penske), this is nothing compared to NASCAR’s stake on the track side.
Keselowski continued on later in the article:
“We have to change the business model to move away from team sponsors because the way it’s set up now encourages us to harm each other. And by doing that, we’re hurting the sport.
“I feel bad for NASCAR because it’s not their fault. But what NASCAR needs to do is somehow wean ourselves off our sponsors and make the sport more affordable to where you can basically race off the purse.
“For example, now you have NASCAR, who can approach Miller Lite and say, ‘Hey, why don’t you take $5 million of that funding off the No. 2 car and put it on to be the official NASCAR partner?’ Whoever works at NASCAR who signs that deal gets a 10% cut and says, ‘Yes. Nailed it.”
It should be noted that, in the years since this article came out, Miller Coors has shrunk its sponsorship of the No. 2 car from a full season to just one race with brand Keystone Light.
Keselowski is absolutely correct even if it’s not the exact way it happens, and there are plenty of exact examples of that scenario playing out. Maybe the best comes from GEICO.
After 2019, NASCAR elected not to renew the Cup title sponsorship program with Monster Energy, instead moving to a new partnership system that remains in place today.
The original four partners of the system have remained in place in the years since. Coca-Cola, which owns a part of Monster and holds bottling rights, is one of them. Xfinity, the title sponsor of the secondary NASCAR Xfinity Series and the sister company of NBC, was one as well. They were joined by longtime NASCAR sponsors Busch and GEICO.
In addition to 2020 being the first year under this new format, it was also GEICO’s 13th season as the full-time sponsor of Germain Racing. It was also GEICO’s last season with Germain, a partnership that started in the 2008 Xfinity Series. After losing GEICO, Germain sold its charter and shut down.
It was the end of the road for a team that had been in NASCAR since 2004. Although most of its success came in the NASCAR Craftsman Truck Series, in which it won 22 races and two championships with Todd Bodine, it had spent a decade in Cup at that point.
Who knows why GEICO ended its sponsorship of the team. But one thing we know for certain is that GEICO chose to remain as a title sponsor in NASCAR’s partnership program.
How much sleep did NASCAR and its executives lose over that? How much did they lose when Stewart-Haas Racing announced it was shutting down earlier this year? If NASCAR is supposed to be a serious sport, an organization shutting down like that should be sounding alarm bells instead of changing chairs around. Teams do not just shut down in other sports, especially when a finger can indirectly be pointed at the governing body.
The reason why I couldn’t take anything NASCAR did this week seriously is because SBJ also reported NASCAR is looking for a new fifth partner in its program.
Who’s it going to be this time? Blind prediction time: NASCAR could make a strong partnership with FedEx, a sponsor that has started cutting back on its sponsorship of Joe Gibbs Racing in recent years. Sponsor the series and potentially take over shipping rights of the industry like UPS used to hold in the 2000s.
I don’t know about you, but that sounds like some strong B2B to me! The only loser, of course, being the race teams. Suck it up, buttercups. Take the cut of the new contract NASCAR wants you to have and submit yourself to yearly audits to ensure you don’t spend too much.
It’s startlingly obvious with every detail that comes out about charter negotiations that NASCAR does not want to have serious conversations simply because it means less money for itself right now.
Hopefully, for their sake, the teams do not call its bluff. Because if nobody shows up for the 2025 Daytona 500, all of NASCAR’s partners will know the truth: At its heart, NASCAR is not a sports governing body. It is a real estate marketing company with a very valuable brand name that would mean nothing without the teams and drivers that have helped build it over the last 75 years and continue to do so.
It’s time for NASCAR to treat its actual partners — those teams and drivers — with respect.
About the author
Michael has watched NASCAR for 20 years and regularly covered the sport from 2013-2021, and also formerly covered the SRX series from 2021-2023. He now covers the FIA Formula 1 World Championship, the NASCAR Xfinity Series, and road course events in the NASCAR Cup Series.
A daily email update (Monday through Friday) providing racing news, commentary, features, and information from Frontstretch.com
We hate spam. Your email address will not be sold or shared with anyone else.
Why be surprised about Ben Kennedy being mentioned. Look whose son he is. I think he’s definitely in the Brian mold. Poor Hamlin, did he enter into ownership with his eyes closed or is he just not smart enough in the first place. The France family is about more money to them period. Anyone who really thought that big increase in tv money was going anywhere except in their pockets was completely oblivious to history.
It’s not often you see a 32 year old EVP at any major company. Even by NASCAR standards he’s beating Brian by six years (he was 38 when he moved into that role in 2000).
Kennedy’s focus by all accounts has been the schedule and developing both the LA Coliseum and the Chicago Street Course. Both of those races have been big successes and the schedule itself is so much more dynamic and interesting then it was for the 20 years prior to Ben entering the picture.
Jeff Gordon said Rick actually loses money every year and I believe him. Rick has deep pockets. Hamlin is going to have to continue getting a big drivers salary into his 60s and I’m lololol at him
Larson is apparently running without a sponsor since it’s Rick’s dealership. Is it a tax write-off?
Part of it is, I am sure.
Rick’s dealerships and their group is completely different entity. Read up how it’s structured. Larson is fully sponsored and no way can Rick use it as a tax write up. It’s not his tax wise.
NASCAR is a monopoly. The teams know that but they continue to negotiate as if they have some say in how it operates. Where are they going to go if NASCAR, and it will, makes a take it or leave it offer? Tracks are owned by two major entities. The cars are provided by NASCAR.
This isn’t like other sports where the franchise owners hire the commissioner and have meaningful committees that set policy. No, policy comes from one place — NASCAR offices.
This Charter thing will be dictated by NASCAR. Should one of the major owners balk, fine, someone else will buy those charters, The sanctioning body sets the rules, pays the money, and dictates what happens.
Don’t want the Charter agreement offered, move along. Someone else will buy it.
Remember the boycott at Talledega in 1969? France ran a scab race that Richard Childress entered. NASCAR will win, the teams will accept NASCAR’S terms. Haven’t boycotted since. Cars could explode if NASCAR dictates and drivers would go out or be replaced.
Nowhere to go. No alternate league.
Business courses are taught on how to deal with a monopoly. Rick Hendrick, Jack Roush, Joe Gibbs, Roger Penske, didn’t get rich being stupid. MIchael Jordan, how did he do with the Wizzards and the Hornets, both propped up by the league. Posturing for the scraps that fall from the table and fight over them like starving coyotes.
The France family will pull the trigger, and the owners (they are not true stakeholders in the classic sense) will declare, to paraphrase Animal House, thank you sir, may I have another.