NASCAR teams hire top antitrust attorney over revenue dispute – Indianapolis

The NASCAR season is under way, with 38 races to determine another stock car racing champion in the 76th season of the top motorsports series in the United States.

There is a serious problem for NASCAR and its teams: Negotiations on a new revenue-sharing model have deteriorated. In mid-February, representatives from five teams told The Associated Press they have hired top antitrust sports attorney Jeffrey Kessler as an adviser.

The move was a power play by the 15 teams holding the 36 charters that guarantee entry into every race, a message that they won’t be bullied in the negotiations. Here’s what to know about this off-the-track brawl with millions at stake:

WHAT ARE CHARTERS?

The charters are the equivalent of having a franchise within NASCAR, but they aren’t permanent and can be revoked by the series. Their value is set by the current market rate, but the details are not disclosed. A charter purchased by Spire Motorsports last year was sold by Live Fast Motorsports reportedly for $40 million—an enormous jump from the $6 million Spire spent in 2018 when it became the first team to buy a charter from another team.

NASCAR determined which teams received charters in 2016. There are four charters that have not been offered for sale and are on hold by NASCAR for use if a fourth manufacturer enters the Cup Series.

The current agreement expires at the end of this season and teams have been trying for two years to get a better deal from NASCAR, including making the charters permanent.

NASCAR claimed it needed to first complete a new media rights package and a new $7.7 billion television rights deal was announced in December. NASCAR’s economic offer to the teams came shortly after.

The five-member negotiating committee for the race teams told AP that NASCAR was clear: “We’ve been told, ‘This is all there is; there is no flexibility.’ That’s not a negotiation,” said Curtis Polk, part owner of 23XI Racing with Michael Jordan and Denny Hamlin.

NASCAR’S FINANCIAL HEALTH

The stability of NASCAR has ebbed and flowed for years, with much made about empty seats in the stands or viewership numbers season to season. The series has weathered it all and the TV deal is considered substantial.

A recent S&P Global Ratings Report sees ongoing strength in live attendance, sponsorship and advertising-related revenue for NASCAR this year, and added that the new rights deal “provides good revenue visibility” through 2031.

The report also raised its rating on NASCAR’s credit, citing the series’ ability to pay down debt while still growing revenue. S&P expects NASCAR to see 6% to 8% growth this year in its earnings before interest, taxes, depreciation and amortization, a standard accounting measurement.

S&P also expects a positive cash flow of $135 million to $145 million—which could be reduced to $85 million after infrastructure upgrades—that could be used to further trim its debt.

Polk noted the…