MOORESVILLE, N.C. — Perhaps the biggest takeaway from Friday’s State of the Sport address from NASCAR President Steve Phelps and NASCAR Chief Operating Officer Steve O’Donnell involves the value of NASCAR Cup Series charters.
According to Phelps, NASCAR has had extensive talks with all charter owners in NASCAR and increased valuation in the charter system won’t happen until media rights fees are finalized.
“I think the first thing we need to do is get through our media rights,” Phelps said. “I think the race teams have seen that.
“With that said, we are currently having discussions with our race teams. We had a meeting last Wednesday with a team owner council where the entirety of the meeting was about charters, charter extensions.
“We’ve acknowledged that we want to change the paradigm for our race teams, and we need to make sure our race teams are profitable, competing on the race tracks. We are interested in having their enterprise value climb, as I said earlier.
“No timeline, but we are as we’re finalizing our media rights talking about other portions of what our charters would look like that are not financial.”
NASCAR was expected to announce a new television contract that would include FOX, NBC, and a new streaming partner during the latter portion of the season. But as NASCAR enters its Championship Weekend at Phoenix Raceway, the media rights package has not been announced.
“One thing I want to talk to right up front, I’m sure there may or may not be a question on this, is where we stand with our media rights,” Phelps said. “Our media rights, the amount of interest in attaining our media rights for ’25 and beyond exceeded our expectations.
“It is our expectation that not only having a great result with the CW with our Xfinity Series, and what’s going to be an incredible 33-race schedule on broadcast television, we believe that we’re going to have a very strong result with media partners that will look at a combination of broadcast, cable and streaming to some degree.
“What that looks like, I don’t know. Are we getting toward the end of this process? We are.
“Did I think we would have a result earlier? I did. But we haven’t. It’s an incredibly competitive marketplace.
“With that said, I want to assure all our race fans, anyone who is listening, certainly the media corps here, we have had tremendous interest in our sport from a media rights standpoint.”
NASCAR was expected to have a six-race summer series during the NASCAR Cup Series season that would have been exclusively to a streaming partner. That would be similar to the National Football League’s Thursday Night Football package that can only be streamed on Amazon Prime.
But another over-the-air broadcast partner, such as TNT or TBS, may be included in the new TV deal. Both of those have been involved with NASCAR in the past.
Because the media rights package is so important to NASCAR financially, any increase on the value of charters is directly tied to the amount of money that will come from the new television and streaming deal.
“I’m not going to get into the negotiations, but I will give you kind of where we are to the degree that I can without getting into too much specificity,” Phelps said. “If you would ask the race teams, do we think we’re making progress with NASCAR on where things stand in the extension of our charters, I think our race teams would say, yes.
“We understand that race teams want three things. I’ll talk about charters specifically or Cup specifically. Honestly, it’s the same thing for Xfinity and Trucks.
“If you think about race teams, what do they want? They want to be competitive on the racetrack, they want to make sure they’re break-even or profitable. As it relates to the charter specifically, they want to increase their enterprise value.
“I won’t get into numbers where we stand from an enterprise value standpoint, but when the charters change hands at the end of the year, we know at least one will, there will be a significant multiple that race teams will have from a charter enterprise value standpoint.
“Again, as I said, Xfinity and Trucks want the same thing, right? They want to make sure they are competitive on the racetrack and that there is an opportunity to seek profitability.”
A Good Year
According to Phelps and O’Donnell, NASCAR is coming off a pretty good year in 2023.
“I think everyone who goes to the race track can agree that not only do the crowds look better, and they do, but the energy level coming to a NASCAR race is as good as it’s been in a decade,” Phelps said. “It is our goal to continue to have growth in attendance at all of our race tracks.
“The other area would be consumption. If you look at digital and social consumption for NASCAR for this year, it’s up. Television has been a bit of a mixed bag with the Cup being down, low single digits, as well as our Craftsman Truck Series, low single digits, the Xfinity Series is up.
“I wouldn’t say we haven’t had great luck particularly in the first half with weather. Weather wasn’t our friend. But I’m super excited to get us back on a growth pattern from a television perspective next year because we’ll have lower comps than we did this year. Excited about that.
“NBC came back in a powerful way. Those metrics are up. If you consider back in March, we were down 15 percent, now we’re down mid-single digits, we’re happy with where that is.”
O’Donnell is particularly proud of the improvements in both safety and competition in the second year of the Next Gen car. Last year, drivers were sustaining injuries in medium-impact crashes. NASCAR made some improvements to the car during the offseason and those mid-impact injuries have dropped dramatically.
“The work by Dr. John Patalak and the teams together collectively talking about what we’ve learned, what we could do, and quickly reacting to new parts and pieces on that car, the front and rear clip,” O’Donnell explained. “We had two really, really severe incidents this year. That car held up. We were able to learn from that.
“As I’ve said, will repeatedly say, I think everyone on our team will say, it’s an endless journey for us. We want to be on the forefront of safety. We are going to continue to learn. When we find something, we’re going to implement it and react. Proud of the group and the effort.
“Clearly there was a focus on safety. We wanted to make improvements there.”
To achieve its goals in the future, and to return to an upward path of growth, Phelps stressed it will take all partners and stakeholders to work in unison.
“I think that goes into what will be my last area, which is industry collaboration,” Phelps said. “On a lot of different fronts, the collaboration with our industry has never been better, whether you’re talk about OEMs, race tracks, teams or you’re talking about drivers. There is an energy level and excitement level that we are moving together as one.
“If we’re going to optimize the growth of this sport, we need to continue to do that in ’24 and ’25 and beyond. We are putting plans in place to make sure that we do that.
“Charter extensions in addition to having fast race cars coming to the race track to be competitive, we need to make sure our race teams are helping to grow the sport. We need to do the same thing from a driver perspective.
“What things can we put in place that allow us to be most successful with the drivers, having the drivers help promote the sport to the degree that they’re not doing today.
“We think there is room there.”