When teams took the fight to NASCAR, searching for concessions in the new charter agreement, it seemed like NASCAR remained bullish on the topic — at least from the outside looking in.
A week after 23XI Racing and Front Row Motorsports filed their antitrust lawsuit against the sanctioning body, the teams requested an injunction to continue racing as chartered teams during the course of the lawsuit.
During this filing is when a conversation between NASCAR and 23XI became public, sharing the differing perspectives following what 23XI called a “take-it-or-leave-it situation” in the final charter offer. In their Sept. 6 letter, 23XI listed eight points of displeasure with the negotiations.
However, NASCAR responded and specifically addressed the points, including concessions made to try and find a more favorable deal with the teams.
At the moment, NASCAR isn’t exactly seen favorably by very many fans. Over the past month, the sanctioning body has remained fairly tight-lipped as well, contrasting from the pungent quotes delivered by their legal adversaries.
Without sprinkling in negative thoughts or opinions, let’s try and view this from the eyes of NASCAR. After 23XI sent its initial letter, NASCAR responded Sept. 11, saying it “made concessions and in return negotiated for things that NASCAR felt were important.”
Well then, what exactly were the teams wanting, and what concessions did NASCAR claim to make?
In FOX Sports’ Bob Pockrass’ post below are a few of the points raised by 23XI on Sept. 6, followed by NASCAR’s response in a later letter not dated.
The exhibits in the filing today by 23XI and FRM include the letters 23XI and NASCAR sent to each other after the final charter agreement offer. Here is the 23XI letter: pic.twitter.com/LWfBsZvmPw
— Bob Pockrass (@bobpockrass) October 9, 2024
The third point raised in 23XI’s initial letter on Sept. 6 held that the team would “not agree to any noncompete at the end of the 7 years” proposed agreement, should 23XI decide then not to renew charters.
NASCAR responded, “The non-compete clause if you do not renew, was removed in the last draft.”
In point number five, 23XI announced willingness to accept the proposed Driver Incentive plan, but it did not want to “share in the cost of any increase to the plan” over the course of the 7-year deal.
In its response, NASCAR shared that “the Driver Ambassador growth rate is the same as the media rights growth rate,” and NASCAR would assume responsibility for any growth added to that.
The sixth point shared the resistance of 23XI to having “NASCAR paying Drivers any other direct payments during the term,” which surprised NASCAR. In its response, the sanctioning body offered drivers the chance to “waive the right to receive these additional funds.”
Intellectual property rights took up points seven and eight, where 23XI seems almost overprotective of its team IP rights. In order for NASCAR to use 23XI team IP rights, 23XI expected “negotiations that results in meaningful share of revenue generated by those IP rights,” adding that it would try its best to make team IP rights available so NASCAR could promote the sport.
From NASCAR’s perspective, it shared no immediate plans to use team intellectual property “outside of the rights traditionally granted for participation” in racing and events. NASCAR added that teams have to give NASCAR some sort of IP rights in order to simply compete in races and promote the sport just as it has done in years prior.
NASCAR even understood “concerns regarding use of Michael Jordan’s name and likeness in promotional materials,” adding that it was willing to talk about using MJ and what that might mean as far as IP goes.
Looking through the lens of NASCAR, the sanctioning body felt seven of the eight points of concern from 23XI had already been addressed or were simply a non-issue.
The only impasse came from 23XI’s point number four:
“We need to have reasonable protection rights regarding unilateral decisions by NASCAR that increase fees and costs to compete in the Cup Series by a material dollar amount.”
Rather than NASCAR making the decisions, as a sanctioning body, to go to a spec car with single-source parts, scheduling a race with an expensive trip to Mexico or even adjusting practice and qualifying procedures, 23XI wanted the teams to have some say in the matters that could cost money.
This is the one point NASCAR felt it could not concede. NASCAR included the creation of Team Advisory Council so that teams could offer their thoughts on costs and changes. But at the end of the day, NASCAR shared that it absolutely will not give up “the ability to govern the sport.”
Additionally, NASCAR felt it had already made a few other major concessions, the first of which included starting charter negotiations early to try and reach an agreement.
Though NASCAR wanted to make the new agreement last the same duration as the new media deal, NASCAR shared the TNC (team negotiating committee) “insisted on perpetuity,” meaning it wanted to negotiate for something permanent. This provided a second impasse.
The largest concession, NASCAR claimed, is that it did agree to give the teams more money. In fact, NASCAR said the teams would become “the largest beneficiary of the Media Revenues to the financial detriment of other industry stakeholders.”
While NASCAR did not share any numbers on what its final offer was, the TNC still asked for 33% of new revenue and 45% of media revenue.
As meetings with the TNC continued, NASCAR received criticism for ending these meetings and seeking sessions with individual teams. However, from NASCAR’s perspective, “comments NASCAR received from team owners” seemed to suggest that smaller TNC was inaccurately relaying information to the rest of the teams about the ongoing negotiations.
Simply put, NASCAR felt it had conceded enough to adequately meet the concerns of most of the teams, but the representation of the TNC may not have sufficiently shared the points NASCAR hoped to get across. That’s why it moved to individual meetings. In doing so, NASCAR felt it was able to better communicate with the race teams with the one-on-one format, rather than sending a group of representatives.
Toward the end of their second response letter, NASCAR again pointed that it felt seven of 23XI’s eight points had been addressed. NASCAR disputed 23XI’s claim that the sanctioning body “did not negotiate in good faith,” arguing that 23XI expected agreement on all eight points for the negotiations to fall into the “good faith” category.
Reading through the back-and-forth letters, this is NASCAR’s position: one side cannot get everything it wants in a negotiation. NASCAR feels it conceded enough, and it expected the teams to have to make concessions in a few points as well.
In NASCAR’s Oct. 23 response to have 23XI Racing’s and Front Row Motorsports’ injunction denied, it stated that it feels that an injunction is in itself is a contradiction. Citing a previous ruling, NASCAR claimed that the teams want the charter contracts dissolved. However, it’s asking for temporary charters while still seeking “to dissolve the very contractual relationship.” NASCAR also feels an injunction would “force” the body into an “unwanted” relationship with the teams.
Sure, teams and fans are frustrated with a boatload of issues that seemingly lead directly to NASCAR, and too many may have already written off NASCAR as the ‘bad guys’ in the courtroom. I mean, it is hard to compete when the plaintiffs roll up like this.
#NASCAR … 23XI Racing co-owners Michael Jordan and Denny Hamlin and Front Row owner Bob Jenkins arrive at federal courthouse in Charlotte for preliminary injunction hearing. pic.twitter.com/grLhlcfHic
— Dustin Long (@dustinlong) November 4, 2024
While NASCAR continues to hold its cards close to its chest, the released letters, court filings and statements so far do show that NASCAR has done more work than people might have realized to try and advance the charter discussions.
About the author
Caleb began sports writing in 2023 with The Liberty Champion, where he officially covered his first NASCAR race at Richmond in the spring. While there, Caleb met some of the guys from Frontstretch, and he joined the video editing team after graduating from Liberty University with degrees in Strategic Communications and Sports Journalism. Caleb currently work full-time as a Multi-Media Journalist with LEX 18 News in Lexington, Kentucky and contributes to Frontstretch with writing and video editing. He's also behind-the-scenes or on camera for the Happy Hour Podcast, live every Tuesday night at 7:30!
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.
Do you still have to wear the NASCAR knee pads or are the callouses thick enough you don’t have to?
The height difference between MJ and the mere mortals is really evident.
“I mean, it is hard to compete when the plaintiffs roll up like this.” Wow! Just wow!
If there were no Charters this wouldn’t be a problem. Just another example of NA$CAR greed.
Nascar got no money from the charters. The teams have monetized them over the years.
Who got the money for the charters?