Charter – Syndication Server

NASCAR “made several concessions” in charter negotiations

NASCAR president Steve Phelps has told 23XI Racing that “NASCAR has made several concessions and compromises” while negotiating the 2025 Charter Agreement, in a letter signed by Phelps to the organization last month. The letter was part of the …

The letter was part of the exhibits released Wednesday when a preliminary injunction was filed by 23XI Racing and Front Row Motorsports. 23XI and FRM are seeking to race as charter teams in 2025 as the legal process plays out, but without giving up their antitrust claims.

Steve Phelps / Image: Harold Hinson / Getty Images for NASCAR

Phelps wrote that:

–       NASCAR agreed to meet well in advance of the timeline outlined in the existing charter agreement to begin good faith renewal obligations
–       NASCAR agreed to extend the term length beyond the current media rights agreement
–       NASCAR agreed to renewal right protections
–       NASCAR created a team advisory committee to solicit additional input from the teams on major strategic decisions for the industry
–       NASCAR absorbed all costs of hosting and maintaining the team website on NASCAR’s platform
–       NASCAR lowered the transfer fee from the initial proposal
–       NASCAR waived the debt limits, increased the amount of private equity participation, and worked with teams around the transfer language
–       NASCAR agreed to increase the financial position of the teams, making them the largest beneficiary of the media revenues to the financial detriment of other industry stakeholders.

The correspondence is the only insight into NASCAR’s approach to the matter as they have not issued a public statement on the lawsuit. 23XI and Front Row are represented by Jeffrey Kessler of Winston & Strawn while NASCAR is represented by Chris Yates of Latham & Yates.

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Phelps went on to address 23XI Racing’s claim that NASCAR did not negotiate in good faith with the team negotiation committee (TNC). He said NASCAR, through comments from team owners, “became concerned” that all teams were not being accurately informed by the TNC and therefore began negotiating with teams individually. NASCAR and the TNC had been negotiating for two years on a new charter agreement.

“We feel this approach yielded a more balanced document reflecting the concerns and positions of all the charter owners,” wrote Phelps.

Phelps then went on to address specific concerns raised by 23XI Racing. The organization sent NASCAR a letter dated Sept. 6, signed by co-owners Denny Hamlin and Michael Jordan, about its concerns over the new charter agreement. Among them was that “we will not provide team IP rights to NASCAR unless there is a negotiation that results in a meaningful share of revenue generated by those IP rights.”

Phelps responded that NASCAR will not use team IP rights outside of the rights traditionally granted for participation in the event (e.g., live and re-air rights and licensing works, etc.). If NASCAR wanted to use them beyond those rights, they would work through the new business process.

However, Phelps said the two sides cannot agree on 23XI wanting “reasonable protection rights regarding unilateral decisions by NASCAR that increase fees and costs to compete in the Cup Series by a material dollar amount.”

Said Phelps, “NASCAR has established the team advisory committee so that teams can provide input to NASCAR regarding costs and other changes; however, NASCAR needs to have the ability to govern the sport.”

23XI gave NASCAR eight points it wanted changed in the charter agreement. Phelps believes seven of them may have been resolved and “we appreciate your acknowledgement that failing to agree on all points Is not a failure to negotiate in good faith.”

To end the letter, Phelps wrote at length, “Michael and Denny, we sincerely hope that you renew your Charter Agreement as we feel that is a valuable asset for your Team(s). NASCAR needs to finalize the Charter and Open team ownership structure ratio for planning purposes for both NASCAR and other industry stakeholders for the 2025 seasons as this information is required for NASCAR to prepare its documentation…

“As you may have heard, the other Charter Teams are already in the process of planning with NASCAR regarding how we move forward and grow together in 2025. Therefore, we will need to have an executed Charter Agreement(s) no later than close of business (5pm ET) on Friday, September 20, 2024. Obviously, if you choose not to execute your Charter Agreement(s) then you’re welcome to race in the 2025 NASCAR Cup Series as an open team and we will be happy to forward you that documentation. Whether you renew or not, NASCAR looks forward to working with you in 2025 and beyond.”

23XI Racing has not signed a Charter Agreement. The antitrust lawsuit was filed Oct. 2 in North Carolina.

Coyne taking unique approach to IndyCar charters

Dale Coyne has been an IndyCar entrant since 1984. In the five decades since the Illinois native joined the CART IndyCar Series as an owner/driver, carried the outfit into the Champ Car World Series, and migrated to today’s NTT IndyCar Series, he’s …

The 70-year-old’s steadfast commitment to IndyCar is unwavering, and as a result, Coyne is receiving the upcoming introduction of Penske Entertainment’s new IndyCar charter membership structure in a different way. With no interest in relinquishing his team, Coyne finds no value in the ability to sell his two charters — his team’s two guaranteed entries on the grid — and cash out and leave. What piques Coyne’s interest is seeing how much money he can raise, and not on the back end, but now, by offering a stake in the charters to investors.

For those who might want to own a share of an IndyCar team’s entries without owning part of the team itself, and don’t mind waiting to reap the future profits whenever Coyne and his wife Gail decide to sell and retire, DCR is open for business and looking to frontload the financial benefits of having charters.

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“We’ve had a lot of interest, and people have talked to us about partnering up, so the charter is going to be very good for us,” Coyne told RACER. “We’re looking to get partners in here that help either bring sponsorship or some capital, so we’re open to how that looks and what type of partnerships they could be. That’s the way business should work.”

The looming rollout of Penske Entertainment’s 25 charter memberships across IndyCar’s 10 teams has Coyne busy on his usual hunt for next year’s drivers for the Nos. 18 and 51 Honda, and to find the best investment partners for each entry’s charter.

“It could look a lot of different ways because it depends on what the partner is looking for,” Coyne said. “If a partner just wants to come and be part of racing, that’s fine. If it’s somebody who has good marketing relationships and can bring them to the table, that’s another thing to consider. There’s ways it could work that I’m sure we haven’t thought of yet. But we see the charters as a way we can make things better for our team right away. It all helps.”

23XI, FRM both holding out on new NASCAR charter agreements

23XI Racing says it intentionally missed a deadline to sign NASCAR’s new charter agreement because it is still not satisfied with the terms laid out by the series. “23XI decided to not meet a NASCAR-imposed deadline last night to sign charter …

23XI Racing says it intentionally missed a deadline to sign NASCAR’s new charter agreement because it is still not satisfied with the terms laid out by the series.

“23XI decided to not meet a NASCAR-imposed deadline last night to sign charter agreements for its two cars for 2025-2031. 23XI’s position, as stated in a letter to NASCAR, is that we did not have an opportunity to fairly bargain for a new charter contract,” read a statement issued by the team on Saturday.

“We notified NASCAR what issues needed to be addressed, in writing, at the deadline. We are interested in engaging in constructive discussions with NASCAR to address these issues and move forward in a way that comes to a fair resolution, while strengthening the sport we all love.

“At 23XI Racing, we remain committed to competing at the highest level while also standing firm in our belief that NASCAR should be governed by fair and equitable practices.”

NASCAR imposed a midnight Friday deadline. 23XI Racing and Front Row Motorsports are reported to be the only two organizations, of 15 with charters, who have not signed the agreement.

The current charter agreement, which went through an extension in 2020, ends after this season. It was aligned with the same year NASCAR would work through its next media rights deal. NASCAR and its teams have been going and forth on a new seven-year proposal for a charter agreement that would go through the 2031 season.

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NASCAR introduced charters in 2016. All full-time teams, 36 (from 15 organizations), have a charter that guarantees them entry into each Cup Series race. The value of the charter is tied to a guaranteed base of the purse money from each event and its performance.

Denny Hamlin, co-owner of 23XI Racing, has been the most outspoken about a new agreement and the rejected proposals from NASCAR. Among the sticking points for the race teams is making the charters permanent and teams receiving more financially from the revenue within the industry.

During NASCAR playoff media day earlier this week, Hamlin said that the charter conversation between the teams and NASCAR had gone “stagnant,” and despite what others might be saying about a deal being close, was adamant things were continuing to go in the wrong direction.

“One side will have to wake up and be reasonable,” Hamlin said of a deal being finalized.

23XI Racing fields two full-time entries for Bubba Wallace and Tyler Reddick. There has been conversation around expanding to a third car next season. Front Row Motorsports already announced plans to expand to three charter entries next season.

“I believe I am [telling the truth] from our standpoint, but it depends on who you ask,” Hamlin said. “There’s probably a handful of teams that are just happy to take any deal that they can get and there’s others with some business sense that say this is unreasonable.”

Hamlin did not have anything to add about the matter Saturday at Atlanta Motor Speedway, referring to the statement released. NASCAR also had no comment on the matter.

IndyCar schedules charter presentation for next week

IndyCar Series team owners will have a new opportunity to review and possibly agree to move forward with a new charter system that series’ owner Penske Entertainment has been developing for the last six months. Although the first attempt to push …

Although the first attempt to push through charters late in 2023 was unsuccessful, an array of improvements to the program’s structure should provide better odds for Penske Entertainment to receive approval from its 10 full-time teams to move forward with the issuance of charters.

“We’ll have another discussion with all the owners before the 500,” Penske Entertainment CEO Mark Miles told RACER.

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Most of the major aspects of the charter program have been chronicled throughout the year, and the following are likely to be finalized and presented to the 10 independent team owners:

• Charters will be created for 25 of IndyCar’s 27 full-time entries.

• The selection of the 25 is based on the results of IndyCar’s 2023 entrants’ championship.

• The 25 charter entries will have guaranteed starting positions at every race on the calendar except for the Indianapolis 500.

• Only the 25 charter entries will be eligible to earn the 22 $1 million Leaders Circle contracts from Penske Entertainment, which are offered to the cars that place in the top 22 in the entrants’ championship.

• Teams will be limited to receiving no more than three charters; teams with four or more cars will not have their extra cars included in the charter system and won’t have the guarantees or perks made available.

• The charter program will also place a new limit of 27 cars per race outside of the Indy 500’s 33 starters.

• Each charter is expected to come at no up-front cost to the teams.

An important overarching fact about the charter program was also provided by Miles. Like NASCAR, which owns the charters it gave to its teams, Penske Entertainment will maintain ownership of its charters. IndyCar team owners will be allowed to monetize their charters by selling the rights that come with the charter, but Penske Entertainment is and will remain as the permanent owner, issuer, and recaller of each charter.

“They’re gonna have, by virtue of an agreement with the series, certain rights, which includes the ability for them, under certain circumstances, to sell those rights,” Miles explained. “The reality is that the series actually owns the car numbers. It’s not really complicated. If they get a charter, they could lose it if they don’t perform, if they don’t run every race, much like is the case with the Leaders Circle today.”

According to Miles, teams with charters cannot sell them without Penske Entertainment’s blessing, which speaks to the control the company will maintain over the charter program and the lack of independent decision-making charter teams will have in the process. The company is also expected to receive a percentage of any sale from the seller and the buyer. Nonetheless, Miles doesn’t view Penske Entertainment as owning the charters.

“They would have the right, with the series’ approval, to sell their rights, which we call their charter,” he said. “And they’ll have obligations. So that’s the way I would talk about it. I don’t see it as the series owning the charter; it’s really an agreement. What they’re really trying to do is have the ability to either sell it or assign it, which I think of as a sale.”

In order to maintain the benefits the program provides, IndyCar teams will need to renew their charters with Penske Entertainment at certain intervals.

“We’ll figure out how long they are and they’ll obviously have to be some prescribed period prior to their expiration of them to begin thinking with teams about what’s next,” Miles said.

A final clarification of note was offered by Miles on whether teams who receive charters will be granted ownership stakes in the series or its parent company, which would give them the ability to sway Penske Entertainment’s decisions in the future.

“That’s correct,” Miles said. “The teams will have no ownership rights in the entity of Penske Entertainment or IndyCar.”

PREMA including charter prospects in its IndyCar plans

PREMA Racing has yet to enter an IndyCar Series race, but that hasn’t stopped the Italian team from trying to secure its future in the American open-wheel series. RACER has learned the Formula 2 and European junior series organization owned by Rene …

PREMA Racing has yet to enter an IndyCar Series race, but that hasn’t stopped the Italian team from trying to secure its future in the American open-wheel series.

RACER has learned the Formula 2 and European junior series organization owned by Rene Roisin and managed by Angelina Ertsou has made outreaches to multiple teams to inquire if they would be willing to sell their future charters to PREMA.

Expected to be launched later this month, IndyCar plans to issue 25 charters to its existing teams that would, among the perks, provide guaranteed starting positions at most races, barring the Indianapolis 500, and grant those 25 entries — the 25 charter cars invited into the club — the exclusive ability to earn a $1 million annual stipend from Penske Entertainment if they place inside the top 22 in the entrants’ championship.

Penske Entertainment also intends to place a 27-car cap on its starting grid at the majority of its races, which would thrust PREMA’s new two-car Chevrolet-powered team into a fight to qualify for and take part in those events. At 27 full-time cars in 2024, and a strong likelihood of that number carrying over into 2025, PREMA would be the 28th and 29th entries, leaving its pair and Chip Ganassi Racing’s two newest entries to vie for the 26th and 27th starting spots on a regular basis.

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Without charters, PREMA will face an uphill battle to out-qualify the reigning, 11-time IndyCar champions at Ganassi, and as such, PREMA IndyCar CEO Piers Phillips has been busy trying to find a seller once charters are issued.

“Well, that’s certainly not untrue,” Phillips told RACER. “As you would imagine, since the announcement, myself and Rene have just been assessing those situations. It would be remiss of us to not turn over every stone and just see what the opportunities are. But those conversations have been short. At the moment, we’re just literally evaluating to see where everybody sits.

“I think there’s a window of change coming over the next few years in a positive way with what Roger [Penske] has done through Penske Entertainment, how they’ve stabilized the championship and how the championship’s grown. I can see a significant change in the level of IndyCar both off track and on track. And it’s my job to make sure that where we’re on the engine leaving the station, not trying to jump on the last carriage once it’s gone.”

PREMA is rumored to have offered $1 million per charter, which would serve as the first known attempt to place a transactional value on the memberships to the club. One team owner who received an inquiry and offer, and asked not to be identified, felt the number needed to be 10 times what was proposed, at a minimum.

Phillips says PREMA’s IndyCar announcement has led to an overwhelming response from those in the industry who want to be part of the program.

“I think in the first 10 days, I had over 5000 messages, whether it was emails, text messages, LinkedIn; it was ridiculous,” he added.

Some IndyCar teams have privately expressed frustration at PREMA’s efforts to recruit within the paddock, but Phillips pushed back at those allegations.

“I can tell you categorically, my moral compass points north and I wouldn’t do that to anybody else,” he said. “We’ve had interest globally, not just from IndyCar, but from F1, F2, from NASCAR, from LMDH, from all sorts of engineering companies. We don’t need to be reaching out to people. As you can imagine a lot of the contacts we’ve received, you swipe left because they’re not going to bring the energy that I want to the organization. But we haven’t reached out to any personnel at any team, I can assure you that, 100 percent.

“And quite honestly, I think if you look at the teams currently, and you look at the insecurity and the panic of organizations, making people sign non-compete [clauses] and giving people bonuses to keep them within the organization, I think that shows a massive insecurity. You should make your team and your culture a place where people want to walk through the door on a Monday morning and go and be part of that organization. That’s how we’re going to do things at PREMA. We’re going to do it differently from what I would consider the norm in IndyCar.”

Phillips closed on drivers, with the newly-available David Malukas joining other high-profile IndyCar free agents like Alexander Rossi from Arrow McLaren — a team Phillips once led — to Rahal Letterman Lanigan Racing’s Christian Lundgaard — a driver he brought over from F2 — to Ed Carpenter Racing’s Rinus VeeKay all sitting among the options for PREMA to consider.

“I think maybe half the IndyCar field has reached out to us, whether it’s about next year or future years, which is flattering,” he said. “But since the launch until yesterday, Rene and I hadn’t really discussed anything further regarding drivers. We’re looking at the market to see who’s available. Like with team personnel, is it the right fit or isn’t it?

“You’ve got to look at if you’re bringing in experience, and is it the right experience, because we’ve all seen it before with drivers that come in and don’t necessarily have what’s required in terms of leadership to galvanize the engineering. Every day the list gets longer and longer and longer, and Rene is dealing with that currently, because I’ve got enough on my plate, putting the nuts and bolts of the team together.”

IndyCar restarts charter talks

With its second attempt to form a charter system having failed late in 2023, Penske Entertainment says a third engagement with its IndyCar entrants, which took place earlier this week, ended in an encouraging manner. At present, and in stark …

At present, and in stark contrast to NASCAR and Formula 1, IndyCar team owners have no commodity to own or sell with their individual entries since the series does not have a formal financial structure in place for entrants to gain access to or take part in its series.

Company CEO Mark Miles expressed high hopes for the newest charter structure to reach the finish line, which is aimed for presentation to its teams at some point prior to the Indianapolis 500 in May.

“We did talk quite a bit about and there’s been a lot of phone calls already since yesterday, with team owners about our commitment to developing a charter system,” Miles said. “The way we explained it to them is that we’ve put out a couple of different concepts for charters in previous team owner meetings, and frankly, not been very close to consensus on what it might look like.

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“So yesterday, we aired another high-level starting point for the concept of charters that maybe we’ll have more traction. And we’re going to work with a smaller group of team owners to get that developed — we’d like to see it fully developed and adopted before the 500 in coming weeks.”

As it was presented to the 11 teams represented on the call, no specific charter plans were laid out for the group, but Miles did provide some general thoughts on concepts for who might be included in the initial charter offering.

“Another element that we were talking about is we might start it [with] last year’s results, and the teams that we expect to be on the grid full-time this year, could be the initial charter members,” he said. “So if it’s going to be based on the composition of the grid at the beginning of this year for the IndyCar Series broadly, then the sooner we get we get it locked in, I think the more sense that will make.”

As RACER reported in August on the possibility of the Indy 500 having guaranteed starting spots for entries that have a charter, which drew the ire of many fans, and angered more in recent weeks when the same subject was raised, Penske Entertainment appears to have heard its fans and backed away from being as firm on the topic. IndyCar’s team owners, though, weren’t as keen on retreating from protected Indy 500 starting positions.

“So the discussion and our timing isn’t driven by trying to sort out exactly what happens on the grid for the Indy 500, although obviously, that’s going to be a point of discussion,” Miles said. “I’ll just tell you, in the proposal we put out yesterday, we said we want you to think about this without the assurance of charter members having automatic starting positions on the grid for the 500. That was what we aired. And of course, we immediately heard a lot of team owners saying, ‘Whoa, that’s really important [to us].’ So it’s a key discussion point for sure.”

RACER has independently confirmed other details of the newly-proposed charter structure, starting with car counts and how IndyCar’s decades-old Leaders Circle program, which pays guaranteed prize money to the top 22 finishers in the entrants’ championship, and would factor into the system.

Under the latest charter revision, the existing Leaders Circle program for the top 22 entrants from the previous season’s entrants’ standings would continue. In 2023, Penske Entertainment cut $150,000 from each Leaders Circle contract to increase its marketing budget, but that has been corrected for 2024 with each contract returning to its previous value of just over $1 million for each of the 22 entries.

The charter would keep paying the $1 million to the top 22 each season, and at least for the initial formation of the charter, between 25-26 entries could be accommodated. It’s here that having a charter and having a Leaders Circle contract can diverge.

In essence, only those teams with entries that are within the charter system would be eligible to earn one of the 22 annual Leaders Circle payouts. But with the payouts limited to the top 22 in entrants’ points, there would always be three or four cars with charters — whichever ones each year that place 23^rd or worse — that do not qualify for the $1 million stipend.

With 27 full-time entries last season and 27 again this year, the charter system would — in its present state — encompass most of the cars on its grid, but not all. If, for whatever reason, a team with a charter wanted to leave the series, downsize its team, or expand its team, IndyCar’s charters would hold a certain value in the same way NASCAR’s Cup Series charters hold value as an asset to buy or sell.

From Wednesday’s meeting, no forecasted value for an IndyCar charter was presented by Penske Entertainment. A change in tact was also mentioned, this coming after the owners were reportedly asked in the meeting from late in 2023 to pay an upfront price of $1 million per charter. That request was shot down by all owners. As a result, no buy-in price for charter membership was proposed in the new meeting.

Closing with a return to guaranteed entries, Penske Entertainment did speak to issuing charters that locked its members into the 25-26 slots on every grid outside of the Indy 500. It’s unclear whether non-charter entries would be welcome at those events, but the concerns about ongoing increases in car counts and accommodating them within the available pit and paddock spaces at every venue was brought forth in the meeting.

New TV deal needs to come before charter agreement – NASCAR’s Phelps

NASCAR president Steve Phelps says that the next television deal needs to be done before the industry can finalize a new charter agreement. “I think the race teams have seen that,” Phelps said during his annual season-ending state of the sport …

NASCAR president Steve Phelps says that the next television deal needs to be done before the industry can finalize a new charter agreement.

“I think the race teams have seen that,” Phelps said during his annual season-ending state of the sport address. “With that said, we’re currently having discussions with our race teams. We had a meeting last Wednesday with a team owner council where the entirety of the meeting was about charters and charter extensions.”

The business of charters and media rights are amongst the biggest matters NASCAR is navigating. Both the current charter agreement and media rights deal with Fox Sports and NBC Sports end after the 2024 season.

A charter not only guarantees a spot in each race but a portion of the television revenue. The value of a team’s charter is based on performance. The system was introduced in 2016.

“We’ve acknowledged that we want to change the paradigm for our race teams and we need to make sure our race teams are profitable, we need to make sure our race teams are competing on the racetracks,” Phelps continued. “We are interested in having their enterprise value climb. No timeline (on getting a deal done), but we are, as we’re finalizing our media rights, talking about other portions of what our charters would look like that are not financial.”

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On the television side, Phelps admitted the ratings have been a mixed bag this season. The viewership numbers for Cup Series races were down, as much as 15% in March, but it’s now mid-single digits since the second half of the season.

“We’re happy with where that is,” Phelps said.

Fox Sports has been a partner since 2001 and broadcasts the first half of the season. NBC Sports took over the second half in 2015, signing talent like Steve Letarte fresh out of the garage, and later, Dale Earnhardt Jr.

The next media rights deal would begin in 2025. NASCAR has not indicated which networks are in talks for the next rights deal.

“The amount of interest in attaining our media rights for ’25 and beyond exceeded our expectations,” Phelps said. “It is our expectation that not only having a great result with the CW with our Xfinity Series, and what’s going to be an incredible 33-race schedule on broadcast television that we’re going to have a very strong result with media partners that will look at a combination of broadcast, cable and streaming to some degree.

“What that looks like, I don’t know. Are we getting toward the end of this process? We are. Did I think we would have a result earlier? I did. But we haven’t. It’s an incredibly competitive marketplace. But with that said, I want to assure all our race fans, anyone who is listening, and certainly the media corps here, we have had tremendous interest in our sport from a media rights standpoint.”