Only a few weeks after celebrating his first in-person win as a NASCAR Cup Series car owner, Michael Jordan took a public stance on the ongoing charter and revenue sharing negotiations between NASCAR and its teams, stressing the need for a better business model in stock car racing. Jordan, an NBA legend and international basketball icon, has been the co-owner of 23XI Racing since 2021.
Presently, NASCAR and its teams have been in a standoff on renewing the sport's charter system, a franchise-style model that was introduced in 2016 to provide team owners a tangible asset and ensure all 36 chartered teams a guaranteed spot in each Cup Series race. As reported by The Athletic, the team owners are seeking for charters to be made permanent -- the current agreement is set to expire at the end of the 2024 season -- as to not risk being left with a worthless investment.
However, NASCAR has reserved the right to revoke a charter in the event that a team is not operating to its competitive or professional standards, and NASCAR CEO Jim France has reportedly sought to not stray too far from how his grandfather Bill France or father Bill France Jr. would have operated. NASCAR teams were independent contractors for many years, and many have operated at a loss even with the introduction of the charter system.
That's an enormous difference from stick-and-ball sports like the NBA, where Jordan and business partner Curtis Polk come from. Speaking to the New York Times, Jordan stumped for permanent charters as a means of ensuring NASCAR's long-term survival.
"If you had permanent charters, then you could create a revenue stream, either with new investors or different types of sponsorships that would subsidize that type of variance between ownership and the league," Jordan said. "That's a big, big miss right there. If you don't correct that, this sport's going to die not because of the competition aspect, but because economically it doesn't make sense for any businesspeople.
"In all partnerships, if you grow the pie, that means your business is going to continue to grow. And to grow the pie, you've got to make sure everybody's healthy within the partnership. If our ownership in NASCAR is losing money and NASCAR's the only one making money, that's not a good partnership."
With NASCAR having struck a new $7.7 billion media rights deal last fall, revenue sharing has become a major point of contention between the sanctioning body and its teams. Per the media rights deal that began in 2015 and runs through the end of this year, teams currently only receive 25 percent of revenue compared to 65 percent that goes to racetracks and 10 percent that goes to NASCAR itself. Prior to the Daytona 500 in February, the teams armed themselves in negotiations by hiring antitrust lawyer Jeffrey Kessler, who famously represented Division I college athletes in a case that led to financial stipends for NCAA athletes, in an advisory role.
Despite the team owners' contentions, NASCAR itself has maintained optimism that they will be able to reach a deal. Several weeks ago at the CAA World Congress of Sports in Los Angeles, NASCAR COO Steve O'Donnell stated that the sanctioning body was "very close" to reaching an agreement on charter renewals.
