MOORESVILLE, N.C. — NASCAR President Steve Phelps discussed NASCAR’s charter system, its pending media rights contracts, scheduling and other items during an appearance Monday morning during Race Industry Week.
Appearing by Zoom before a gathering of industry professionals, Phelps addressed many of the key items confronting the sanctioning body this offseason, including ongoing discussions with its race teams regarding the charter system.
“We are all-in on the charter system,” Phelps said. “We think that the charters have been valuable to the sport overall.
“The race teams want three things — or so they have told us. They want to be competitive on the race track, which right now that’s a check. They want to increase the enterprise value of the charters and that has been a check, and they want to have a path to profitability. That’s not a check right now.”
Phelps understands the teams that hold the 36 NASCAR charters are not profitable.
“Our race teams by and large are losing money at the Cup level and that is something we need to solve for them,” Phelps explained. “We can solve that with two key pillars. One is to make sure that they are getting additional revenue. They are interested in getting more money from the sanctioning body and the tracks through the purse and that is something that we need to do.
“The only way we can do that is to have increases in your media rights, which is what we doing today,” Phelps said referring to ongoing rights negotiations. “We are unsure what that is. When there is more clarity, we’ll understand what those financials will look like.
“Secondly, and not small, honestly, is some type of cost containment, whether that is in the form of a cap or whether that is in the form of the parts and pieces that make up the Next Gen car, trying to limit those pieces,” Phelps continued. “I’m not sure where we are going to net out on that. I’m not saying our race teams can cut their way to success.
“I am not suggesting that because I have been accused of that in the past. There needs to be a mixture of those two things but both are important if profitability or breaking even is important to our race teams, then you have to do both. That’s something we need to focus on.”
As well, Phelps would like to see teams more committed to promoting NASCAR racing.
“The other part is around the promotion of the sport. We need to do our job as the sanctioning body and the tracks that we don’t own and that we do own, need to do their part in promoting NASCAR and the races themselves to get more and more sellouts,” Phelps said. “The race teams need to do their part in helping to promote the sport in addition to what they do today. If you look at the makeup up of the race teams, it’s primarily to make sure they are building fast race cars and having the right crews at the race track in order to win.
“That is what their goal is and that’s what it should be. The significant makeup of teams on percentage wise is on the competition side. They are not on what I would call marketing and promotion sides of the business,” Phelps noted. “I’m not suggesting that they need to do that, but what can we do collectively with our race teams that drives the growth of this sport?
“More importantly, what can we do with our drivers that will do the same thing? The drivers are the show.”
Phelps also said NASCAR’s schedule of events will continue to evolve.
“Schedule variation is going to continue. Are we going to continue to race in Atlanta and Richmond and Charlotte and other places that are fixtures on our schedule? We are,” Phelps said. “I think that the question is as we are thinking about alternate locations, our schedule is not going to expand. We are at 36 points paying races and two special events. We have 38 races on our calendar and for the foreseeable future we are going to have 38 races on the calendar.
“While I don’t see that expanding, I do think there are some places where we race twice that honestly if we race once, and I won’t get into any specifics, but if one of our race tracks is not selling out two races, what we have shown is that if you go to one race like Michigan or Pocono, Dover, all three of those races are sellouts and that’s what we need to do.”
Phelps stressed the importance of sellouts to the sanctioning body and its partners.
“We had 12 or 13 sellouts this year. That’s not enough,” he said. “It is five more than we had last year and we are really working hard to make sure we have more sellouts. Iowa (Speedway) will be a sellout and it will be a sellout relatively quickly because there is demand there.”
Finally, Phelps said NASCAR will continue to change with the times, citing the Chicago Street Race as an example.
“When we talk to our employees, it’s having them think differently about the business. It doesn’t mean that we are going to make changes for change sake, that doesn’t make any sense,” Phelps said. “But having a calculated risk like having the Chicago Street Race was a risk that I felt we should take.
“We lost a ton of money on that race, but that was the best money we spent because what I do know is that FOX and NBC, the Chicago Street Race was in the NBC part of the season. It was the second highest rated race we had all year,” Phelps continued. “People were interested in tuning in to see what was going to happen, particularly the casual fans. Our hardcore fans are going to tune in anyway. They are the best fans in the world, but the casual fan that drives those numbers.
“I’m not suggesting that we are going to have five street races. We are not. We may not have two street races a year, but do I foresee in the future that we are going to have one street race, maybe two? Yes,” Phelps continued. “But when you create something special and you replicate it again and again it is going to stop being special.”
Other speakers during Race Industry Week will include Chip Ganassi, Rick Hendrick, John Doonan, John Force, Richard Petty and World of Outlaws President Brian Carter.
There is no charge to attend — click here to register. Or, click here for the full schedule.