NASCAR boss addresses charter talks amid team calls for higher revenue share

NASCAR president Steve Phelps recently discussed the ongoing talks about charters that give teams the right to compete in NASCAR. Teams have been asking for a bigger share of the revenue and Phelps responded to the demands on a recent podcast appearance.

NASCAR hoped to have a new charter deal done by now, but talks are still ongoing. With Stewart-Haas Racing shutting down, there are four charters up for sale. The charter prices are rising steeply and Front Row Motorsports recently bought one for about $20-25 million.

In the latest episode of Kevin Harvick's Happy Hour podcast, Steve Phelps said that the current financial system has worked well, but changes might be needed to keep the sport healthy. He added that the governing body has offered more money to teams in recent proposals and controlling costs is important for the long-term sustainability of the sport.

"Something needs to change because if it doesn’t change in my opinion in seven years when we’re re-negotiating the financials of these charters, it’ll come back to we’re not making any money or we’re losing...typically what happens is race teams want to take every dollar and then some and spend it to go fast. Which I get because it’s a vicious cycle that exists. If you don’t go fast, you can’t get sponsorship, if you’re not winning, you can’t get sponsorship,” Phelps said (37:30).

Phelps also touched on the differences between NASCAR’s charter system and franchise models in other sports, like the NBA or NFL. He explained that other sports operate as franchise systems. Teams buy a franchise and share collective revenue but the charter system is different.

"What a charter is not a franchise... You are buying a guaranteed starting spot, you are buying some known revenue, that's fixed, and then you compete for the rest of the revenue," Phelps said (41:05).

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"Healthy race teams put on better racing": Phelps on why NASCAR charters matter to the sport

NASCAR charters started in 2016 and they guarantee teams a spot in each race and a share of the prize money. There are 36 charters in total, each with performance standards. Teams can have up to four charters. If a team finishes in the bottom three for three years, they might lose their charter.

Phelps also stated in the podcast that he wants the race fans to care about the business side of racing. He added that he believes the charters will be extended.

"I know that race fans, typically, they really don't care about charters. They don't care about team costs; they don't care about what I would call the business side of NASCAR. They just want great racing, right? They want their favorite driver to win, and they want storylines. They want guys to hate, whatever it is, the drama of the sport. What I would say is they should care because healthy race teams put on better racing," said Phelps (34:20).