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NASCAR Owners’ Alliance A Sign Of Discontent?

Jim Pedley | Managing Editor, RacinToday.com Thursday, July 10 2014

NASCAR chairman and CEO Brian France will soon be dealing with united team owners . (File photo courtesy of NASCAR)

By Jim Pedley | Managing Editor
RacinToday.com

Rob Kauffman is a businessman. The co-owner of Michael Waltrip Racing, he has reportedly made hundreds of millions of dollars managing hedge funds. That fact alone might be a clue to the motive and function of the new alliance of NASCAR team owners which Kauffman has been selected to lead.

NASCAR, it appears, is about to enter a new era in which the motorsports business will likely become more entrenched as the business of motorsports. Whether the new era will be malevolent or benevolent toward racing and its fans remains to be seen.

It was Kauffman’s MWR team that issued the original press release that announced the formation of Race Team Alliance on Monday. The release stated the nine largest NASCAR teams – teams that employ the biggest stars in the Sprint Cup Series – are members of the RTA.

It also announced the goal of the organization, which some are calling an owners union, is to include all teams.

In non-public forums, team owners have long discussed their satisfaction with their share of the multi-billion-dollar NASCAR pot. Especially that part of the pot where television revenues are located. Under the long-standing formula, team owners receive only 25 percent of the take while track operators get 65 percent and NASCAR 10 percent.

With the recession slowly winding down, and with sponsors trickling back into NASCAR, and with ownership costs at least holding steady, and with the post sweetened by the arrival of NBC Sports and an increase in rights fees paid by Fox, owners apparently think now is the time to strike.

In a telephone interview with RacinToday.com on Monday afternoon, Kauffman stressed that RTA is simply a “business association” that is more about cooperation – between the teams themselves and between the alliance and NASCAR – than competition.

“We just want to speak with a common voice,” Kauffman said. “We want to try to do some things for ourselves in order to get things done.”

He brought up the example of team travel.

“Every week we all go the same places. Wouldn’t it make sense consolidate things? To go to hotel chains and attempt to get a bulk rate?”

It just makes sense, Kauffman said, “To save teams money by combining purchasing power.”

Kauffman said the goal of the RTA is to “collaborate” with NASCAR. The result, he said, could be positive for all involved. He cited the collaboration between teams, manufacturers and NASCAR on the Gen 6 project.

Kauffman did not totally reject the term “union” in describing RTA, but preferred the name “industry association”.

Given NASCAR’s long history of opposition to unions – and the fact that working class fans might note that the group is comprised of multi millionaires – it would certainly be wise not to call the group a union.

But it is highly possible that the RTA may function as a union as it very probably will want a bigger say in financial and competitive issues in NASCAR.

NASCAR chairman and CEO Brian France is not his father or grandfather. He’s a 21st Century business man  and won’t be standing at the garage gates telling RTA members he has a pistol and knows how to use it.

But it is highly unlikely that he will hand over the keys to the castle to RTA. He won’t and he can’t as NASCAR and its track-owning/operation arm of International Speedway Corporation, have investors, stockholders and other “partners” to think of.

So far, NASCAR has not said much about the situation. It issued a one paragraph statement that said, basically, it is still studying the situation.

France, you can assume, has likely gathered his team around him Daytona Beach and Charlotte offices and are making plans on how to deal with an owners union or industry association or whatever the RTA is.

The two big questions today are:

1. How will the formation of RTA affect the sport of stock car racing in the coming months and years?

2. How will it affect fans?

The answer to No. 1 comes more in the form of a hope. The hope here is that both NASCAR and the RTA are good students of history: That they remember what happened in the 1990s when team owners took control of Indy car racing. NASCAR team owners Roger Penske and Chip Ganassi are well aware how all that ended up and hoping are serving as voices of reason at RTA. NASCAR right now is on wobbly legs as it attempts to restore all that was lost in 2008 and 2009. Shock therapy by either side could buckle those legs.

And the answer to No. 2 is, TBD. The results could ranger from no effect to big effect ( higher ticket prices to reduced race schedules). Looking back at the history of professional sports, it’s difficult to find examples of how big changes in structure by leagues or competitors have benefitted the people who buy the tickets and eat the hot dogs.

The certainties are these: The formation of RTA signals dissatisfaction with the status quo; the timing of the RTA on the eve of an influx of TV money is not co-incidental; there is a whiff of franchising accompanying this; there is plenty of money in NASCAR’s garages and front offices –enough money that it has financed everything from lavish wineries to huge homes on Lake Norman to fleets of private jets.

If the owners of the series and the teams go to war any time soon, it will be a fight between folks whom all have enormous bank accounts already.

And as is almost always the case, it could be people who have very small bank accounts who will be actual victims.

– Jim Pedley can be reached at jpedley@racintoday.com

Jim Pedley | Managing Editor, RacinToday.com Thursday, July 10 2014
3 Comments

3 Comments »

  • NativeOne says:

    This TV deal worth 8.2 billion and the track owners rake in 65% of it has something to do with it. Guess who was the one saying RTA is a problem? Ole Mr. Smith. I think 65% is more than one group should recieve. The track owners make a killing with that. Nascar recieves only 10%. The 3 should be more even.

  • kb says:

    I agree with Gina, but I have to ask what took so long? I have long wondered for a variety of reasons when owners going to tell BZF where to go. Hopefully, something good will be had for the fans that love the sport of Nascar despite BZF and his cronies in charge.

  • GinaV24 says:

    I’m sure that it is just a pipe dream for this fan to hope that this alliance might actually signal that the owners are going to do something that will, indeed, improve the racing and therefore help the fans.

    Let’s face it the current management of NASCAR sure hasn’t done the fans any favors. The sport was growing before Brian took over and although there has been some pickup now that things are a little better financially for fans, it still isn’t great. ISC and SMI are taking seats OUT of the stands, not because it will make for a better fan experience, even though that is what they say, but because they can’t sell tickets to fill those seats.

    Since the racing seemed to be a little better early in the season with the new rules package and Goodyear even bringing tires that wore out, I was lulled into a false sense of security thinking “well, maybe it is better”. Nah, we’re in the middle of the season, the tires are hard, back to lots of D-shaped ovals and the racing is back to being either a parade or a crapshoot. That doesn’t sell tickets.