Hamlin explains how a new NASCAR TV deal could fundamentally change the sport; Conversational charter system
Denny Hamlin is heavily invested in the sport of NASCAR as the No. 11 race driver for Joe Gibbs. As of last year, he was also the owner of his own team, 23XI Racing which now has two full-time cars.
For years, Hamlin has discussed the need for a change in NASCAR’s business model. Specifically, in connection with the division of television money.
NASCAR TV Money: It has been hinted that NASCAR takes 10%, tracks take 60% while teams are left with only 30%.
The current TV deal is set to expire at the end of the 2024 season. The old way of distributing the money could look very different.
NASCAR has switched to the spec structure for 2022. The idea was to save teams money and also level the playing field. The playing field is more than ever, evidenced by the sheer number of parities when looking at the winners so far. However, the teams found that the next-generation car had a lot of parts thrown away during the race weekend, making it more expensive than expected.
Television revenue is not enough, the difference is funded care. Meanwhile, teams are struggling to find sponsorship as the cost of 200-mph billboards has skyrocketed.
Denny Hamlin hopes the new TV contract will bring a major change in the sport…
Denny Hamlin talks about NASCAR TV money
Denny Hamlin Monument via Del Junior Download.
“Ultimately, we are in a sport where we have to rely on sponsorship. In a world where sponsorship money has many different places to go.”
“I mean, you could put your name on the front of the MLS team for what we do, half a season. We scratch and cheat to get that sponsorship.”
“In 1995, you were watching the same car, every week. That was a known. Now, I took a picture of the Talladega, they wouldn’t know which car they had. We have to split it up, Bubba Wallace’s car has 9 sponsors this year.”
“It can’t be based on care. We shouldn’t be watering based on a CMO’s decision. The average lifespan of a CMO in a fortune 500 company, is 13 months. We just hope and pray that the next CMO will love racing.”
“That’s what holds our sport back so much. Everyone has their own rights. Tracks, NASCAR, teams. As sponsors, the playbook to become a part of this sport is very complex.”
“For example, we had a sponsor for Kurt Bush in Richmond. But, they couldn’t go in there and activate it because NASCAR had a sponsor there. They’re like, ‘You can’t get into our track and activate it.’”
“There are a lot of things we can do better. But, there are a lot of long-term contracts that have to expire in order to get there.”
There are 36 charters in the NASCAR Cup Series. Those were introduced years ago, NASCAR’s version of the franchises. In recent races, only 36 cars appeared on the track, which is no accident.
“The guaranteed rental money is for those 36,” Denny Hamlin says.
“They actually took more money from the open spaces (non-rental cars). They took more money from these guys that just showed up and funneled it more towards charter money. To give more of these teams a foolproof base.”
“They can win the race and not make money, by the way,” Hamlin says of non-rental cars.
“Why aren’t the F1 owners happy about Andretti’s coming? Because it’s weakening. There you have to take that billion in revenue from F1, and now they’re splitting it up between 10 teams. 100 million each.”
“If we can get the TV deal in a better place, we should open up more charter positions.”
How can NASCAR add more charters?
There are many teams interested in joining this sport. JR Motorsports is at the top of that list. But, could NASCAR add four charters to fill the field? How might this work for the other 36 charter owners?
“You have to pay the value. And whatever you dilute the pie, you have to pay that difference as well. It’s just a new shareholder coming in,” Hamlin said.
JR Motorsports has floated the idea of joining the Trophy series for years. This year, those discussions became more serious as the next generation car added interest.
Hamlin added: “We have a legend in our sport, we want to be involved. He has the potential. He can do it. But, financially, it doesn’t make sense. That’s a problem.”
“With healthy owners, you have more Josh Berry. We are looking through the ranks of the short track, to find, ‘Who is going to be that guy who is going to take us to the Promised Land?’”
Currently, many teams are signing up sponsorship drivers. Instead of searching the ladder system for talent, they look for drivers with financing attached, even if that means hiring less talented drivers.
“There are a lot of talented drivers who don’t have the funding. Teams have to stay in the business. Sometimes the best talent sits on the sidelines because teams can’t get out of business.”
Dale Jr confirms his desire for JR Motorsports to join the Cup Series
Dale Earnhardt Jr. emphasized, “We’ve talked to everyone in the industry about this. What are the options? What are the ways to go?”
“This initial purchase of charters isn’t the scary part. They deserve what they are. You’re buying something that you hope will continue to gain value.”
“But, not knowing how much the race will cost and how much that will be. You don’t know how much care you will need to get to make up for that cost. And I don’t know what the new (TV) agreement will be.”
Dale Jr. added: “The owners deserve a bigger piece of the pie. This is the only way it will attract people like me to participate.”