Gifts for NASCAR Fans
During his Tuesday morning cross-examination in the lawsuit between 23XI Racing/Front Row Motorsports and NASCAR, team owner Denny Hamlin expressed his frustration with one specific aspect of the new NASCAR Charter agreement, calling it a “death sentence.”
The long-awaited trial between NASCAR teams 23XI Racing and Front Row Motorsports and the sport itself started with fireworks late Monday afternoon.
To kick off trial testimony, 23XI co-owner, driver, and outspoken industry voice Denny Hamlin gave an emotionally charged testimony and response to questioning by NASCAR attorney Lawrence Buterman.
But one interesting aspect of this cross-examination was the talk about the potential seven-year extension of the 2025 NASCAR Charter Agreement, something reports claim Hamlin deems to be a death sentence.
According to those in the courtroom, Hamlin, who was outspoken throughout the negotiating period of the Charter Agreement in 2024, says that he did not want a seven-year extension to the Charter Agreement as, in 2031 (the year NASCAR would negotiate a new media rights package and theoretically a new Charter Agreement), NASCAR could get a better media rights deal, while not increasing the money sent to the teams.
As Jeff Gluck of The Athletic explained on Tuesday Night’s episode of The Teardown:
“NASCAR guaranteed the teams that the next media rights deal, their money would not go down, but they also would not say that they would increase it. Denny’s concern was when they get to the next charter deal, the next charter negotiation. . . they would have no leverage at all. They would have no negotiations. Because NASCAR could either say, ‘Well, this is what you agreed to seven years ago. We’re not increasing the money.” — Jeff Gluck
Essentially, this implies that even if NASCAR were to get a new, higher-valued Media Rights Deal at the conclusion of the current seven-year $7.7 billion deal, charter owning teams, instead of negotiating for a higher share of revenue from this deal, as they did in 2024, are not guaranteed higher payouts, and would instead, have the current deal extended another seven years.
This would technically mean the current Agreement is 14 years, rather than seven, something that you would think the teams would like; however, in the eyes of Hamlin and 23XI, who did not sign the deal, this traps them in a position where they could not renegotiate.
Thanks to the ongoing antitrust lawsuit, the 2025 Charter Agreement, once thought to be locked behind closed doors for the foreseeable future, is now public information. Talks about extending the Agreement after the seven years are found on pages five through seven, under the section titled “Term.”
The section initially explains how NASCAR will distribute money to the Pool Money (money available for charter teams) in the event of a new media rights deal and extension of the 2025 Charter Agreement. The distribution of money is dependent on the length of a new media rights deal, given that the gross annual average value of that media rights deal is “no less than gross AAV of the current Media Revenues for the corresponding period.”
Furthermore, this section also clarifies that if NASCAR elects for a media rights deal longer or shorter than seven years, the Extension Term “will be shortened or lengthened to correspond with such period.” Meaning that NASCAR can change the length of the extension in the event of a change in the length of its next media rights deal.
Team owners also have to send an “Extension Notice” to NASCAR between January 1, 2031, and March 1, 2031, which would clarify their interest in extending the Term of the Agreement until December 31, 2038. However, NASCAR has selected options not to extend to team owners.
As far as increased payouts go, the Agreement notes that if NASCAR is to offer a third party “terms more favorable” than those previously agreed upon, the sport must then notify other owners “promptly” of these terms, with the document then stating:
“Team Owner will then have thirty (30) days from receiving such notice to accept the extension of this Agreement for the duration of the Extension Term on such more favorable terms. Should the Team Owner exercise this right and extend this Agreement, NEM must extend this Agreement on such more favorable terms.”
Though 23XI and FRM did not sign the 2025 NASCAR Charter Agreement, 13 of the formerly 15 charter owning organizations did so. This means that as of press time, this extension is not applicable to the two teams suing NASCAR, but is applicable to those who signed in September 2024.
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