NASCAR, teams fail to reach charter extension agreement in negotiating window: Sources

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NASCAR and its race teams failed to come to a charter extension agreement before the exclusive negotiating window expired this week, according to sources briefed on the negotiations.

Charters, which are essentially NASCAR’s version of franchises, were instituted in 2016 to give race teams some equity and help owners build value in their investments. The value of charters has skyrocketed to more than $40 million, which was the most recent purchase price last year.

However the original charter agreement expires after 2024, meaning all those investments could vanish in 11 months. Five people briefed on the negotiations, but who were unauthorized to speak publicly, said teams already agreed to extend their exclusive negotiating window with NASCAR for one more month after it was set to end Dec. 31 — but declined to do so again at the end of January.

Teams are now free to speak with other parties about their rights, but it’s widely expected a deal will eventually be reached. NASCAR owns or controls most of the major racetracks in the United States, and teams ultimately won’t want to lose out on their collective billion-plus dollars in charter values.

Though the path forward is the subject of some disagreement among the teams, they largely believe NASCAR, at a minimum, should be more forthcoming on the specific details of the new $7.7 billion TV deal (which was signed in late November and takes effect next year).

“NASCAR could probably be a little more transparent here and diffuse a lot of this,” one person said. “It doesn’t cost NASCAR to be transparent about all of it.”

NASCAR declined to comment on this story. The teams also declined to comment.

Teams went public last spring with their frustration over the pace of negotiations, but NASCAR previously said the TV deal needed to be completed first before they could do the new charter agreements.

Now the TV landscape has been settled, but teams still feel they’re in the dark about where the money is going. Among owners, there’s even some concern some part of the TV deal could be funneled to things like NASCAR’s new $53 million production studio facility — and thus leave less funds available for the teams. (NASCAR has said the studio building will also be available for team usage.)

In a November interview with The Athletic, NASCAR president Steve Phelps predicted the new charter agreements would be completed early this year.

“We’re going to come to a very good result for the race teams and the industry as a whole,” he said. “I’ve said that to our race teams and, honestly, anyone who’s listened for the last year. I believe that to be true. Would it be a fair deal? It’ll be a deal that will help the teams with their enterprise value to be more competitive on the racetrack.

“It’s a negotiation, but we’ll end up in a good place. I’m very confident about that.”

Phelps then went from that November interview with The Athletic straight into a meeting with the teams to give them details of the new TV contract.

But speaking on his “Actions Detrimental” podcast this week, 23XI Racing co-owner Denny Hamlin said teams did not know what exactly was in the TV deal and alluded to the stalled negotiations by calling it “the 11th hour.”

“We tried to start these conversations two years ago and it’s just been delay, delay, delay,” Hamlin said. “So now here we are at the end of the rope.

“Do I believe we are closer to a deal now than 12 months ago? I don’t think so.”

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(Photo: Chris Graythen / Getty Images)

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