Jeff Gordon Says NASCAR Teams Are “Struggling”

What’s Happening?

Jeff Gordon joined the “Dale Jr Download” this week, and the conversation naturally turned towards the lack of a charter agreement. Gordon, a member of the Team Negotiating Committee, expanded on the race teams’ side of the negotiations, and admitted that many NASCAR teams are “Struggling”. Why is this happening, and what needs to change?

• In the full clip, Gordon opened up about many aspects of the charter negotiations that had been widely reported. This included admitting that the TV deal coming together late stalled negotiations, expressing frustration at the overall lack of progress, and saying that the teams want charters to become permanent, or, as Gordon calls it, “Evergreen”.
• The charter negotiations have been a hot topic of conversation since last season. Without a charter agreement, it opens the door for race teams to potentially split from NASCAR.
• Fans are anxious to see an agreement get done, because the consequences could be disastrous. However, fans also want to see a NASCAR that is both growing and thriving.

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The Current State of the Business Model of NASCAR

Jeff Gordon argues that the current business model in NASCAR is not “conducive” to allowing the sport to grow. He specifically cites the bottom line of Hendrick Motorsports to show where the current business model of the sport stands.

These discussions are not just about splitting revenues, right. It’s about, how do we look at the business value of a race team and build enterprise value, be more collaborative with NASCAR in how we come up with ideas that grow the sport, bring in new fans. We’re still very heavily reliant on sponsor income…We don’t make money. I don’t think Hendrick Motorsports has made a profit in 10 years.

Jeff Gordon

This is talking about one of the biggest race teams in the sport, Hendrick Motorsports. One of the most successful race teams that has been in the sport since the 1980s with massive backing from General Motors and Chevrolet has not been recently profitable. Gordon later credits the Business-2-Business relationship that Hendrick has to bring in some of these extra sponsors for the team.

If it’s this way for the big teams, then the smaller teams are likely facing even more dire straits. Gordon explains more about what other race teams are dealing with, and how conversations have been with NASCAR.

We’ve gotta look at all of the teams. It’s not just about Hendrick.It’s not just about he big teams, it’s about every team, and there’s a lot of teams struggling. NASCAR’s aware of it, and [the teams have] shared our books and all the details we possibly can. NASCAR’s got to run the sport too, they have certain criterias they’ve gotta meet. There’s been good dialogue, it’s just been frustrating that we haven’t been able to move things.

Jeff Gordon

Gordon later went on to compliment the work that NASCAR has done on things like “NASCAR: Full Speed” on Netflix to help grow the sport and reach new audiences. However, he believes that NASCAR and the teams need to do “more”, but, doing that is a “challenge”.

He once again cites how the current business model holds teams back from doing some of those things. Their focus is forced into one place because of where the teams currently get their revenue.

The teams are focused on ‘What can we do for our sponsors’…That’s where the team’s focus is because that’s where the revenue comes in for us. I think that what we need to do is get into a place where were focused on not only taking care of our sponsors and winning races, but how do we collectively grow the sport and have a broader reach. Go more international, have more Netflix-type shows. Right now, I just don’t think that the way the business model is is conducive of us putting that kind of energy into those things as much as it is, go win races.

Jeff Gordon

This all boils down to finding other ways for teams to earn revenue. Gordon wants to see the sport in a place where it’s not only encouraged but beneficial for race teams to take some risks and do unique things to help grow the sport. However, as he said earlier, many teams are struggling, so, it’s tough for race teams to focus on those extra things.

When Will a Deal Get Done? Will a Deal Get Done?

Later on, Gordon was asked by Earnhardt Jr. about how owners can create leverage with NASCAR in negotiations. Gordon’s response was, “That’s what we’re going to find out over the next several months.”

From there, it seems a deal will not happen anytime soon. The current charter deal runs out on December 31, 2024, so, that is the hard deadline for a new deal. That gives NASCAR about 10 and a half months to get a deal done, and it seems the negotiations will take at least some of that window.

However, despite this, Gordon preached optimism when asked about a new TV deal.

I think we’re going to get a deal done. I think the dialogue and the conversations have been good, it’s just, what are we going to have to go through in order to get there.

Jeff Gordon

The hope continues to be that cooler heads will ultimately prevail. Adam Stern reported that those in the industry expect a deal to get done, and Denny Hamlin also said that he expects a deal to get done despite the hurdles to jump. However, as long as a deal remains undone, there’s always a bit of uneasiness in that sentiment.

Both NASCAR and the race teams seem to understand how much of a disaster it would be for the charter agreement to run out and a potential split to occur. Current NASCAR team owner, Roger Penske, was heavily involved in the CART/IRL split in the 1990s. The team owners and NASCAR both need each other to thrive.

It seems that if or when a charter deal gets done, there will be a major change in NASCAR. Will the deal get done, and will it have the impact the teams and owners hope it has?