Did You Notice? … NASCAR’s business model is the center of Speedweeks conversation? The sport enters 2018 with only 40 entries competing for 40 spots in its Super Bowl, Sunday’s Daytona 500 in the Monster Energy NASCAR Cup Series.
It’ll be the first time since 1969 that every car that showed up to make the 500 field will do so. As a result, it kills much of the excitement surrounding Thursday’s 150-mile qualifying races. The risk of a better starting spot just isn’t worth destroying primary equipment; we’ve seen people win plate races from fifth and 35th starting positions. That’s where NASCAR parity has its downside.
So instead of deciding who will make the grid, these small 20-car drafts will serve as glorified test sessions and practice for pit crews still adjusting to one person less over the wall. And while pit road might be a fascinating place, well, most fans don’t watch to see 16 seconds of whirring air guns and changing tires.
Why so few entries? A large part of the answer surrounds how the 500 field is set. 36 of the 40 spots are already secured through the charter system, which is also where most of the purse money goes for the race itself.
Take Danica Patrick. She secured a ride through Premium Motorsports in part because it gives her a guaranteed spot in the race. Instead of racing her way in, she could have run one qualifying lap, parked the car in her Thursday Duel and still made the starting lineup.
Compare that to a new team trying to fight for a spot. You’re spending six figures (at least) to bring a competitive car to one race with only 10 percent of the starting grid available to you. And if you place 10th, charter rules mean cars who run far worse than you will still earn more money.
It’s a business model that doesn’t work for the 500. It discourages new owners from making an attempt and pushes a top-down business model protecting the big teams from missing the field. A large part of the intrigue of NASCAR’s season opener, once a one-week affair, has now been whittled down to the day of the race.
Why has the Indianapolis 500, which also has struggled with entries in recent years, actually grown by comparison? Simple: it’s treated as an event. Not only does the typical IndyCar field grow significantly (from 20-22 cars to 33), there’s also a number of new faces making one-off attempts. Last season, it was Formula 1’s Fernando Alonso making a splash, and NASCAR drivers like AJ Allmendinger and Kurt Busch have also attempted the crossover. Add in the pageantry of Indiana, giving the track a Kentucky Derby-like feel, and fans come in droves for the series’ big moment.
NASCAR, on the other hand, has gone in the other direction with Daytona. Gone are the days when Mario Andretti, AJ Foyt, Al Unser Jr. and other famous drivers from other series tried Daytona. Danica Patrick? Puh-lease. She raced here last year. DJ Kennington? David Gilliland? Mark Thompson? Half the fan base might confuse them with names on their company’s board of directors. It’s not exactly a Hall of Fame roster of part-time entrants this year.
Add in the same amount of points given to the race winner (no bonus) and the parity of plate racing, and suddenly the glamour of the race is reduced. Without knowing the past history and glory of this event, you might not know it as little more than the season opener. A guaranteed, stable starting field limits the way you can brand a major in racing. Making the rules just like any other event doesn’t make it unique either.
The issues here bring us straight to the charter system in the first place. One way to benefit the sport is to turn Daytona into a true Super Bowl once again, opening up some rules on speed and removing the automatic bid teams get to qualify for the event. You want the old provisional system, leaving a few spots in the back decided by owner points? That’s fine. But 36 of 40 cars for the Super Bowl? That seems to erase two of the greatest hallmarks in racing: risk and speed.
Instead, you’re charging into the field through a check, bringing us front and center back to the charter system. Some might say that encourages stability in a sport where teams went belly up in the late 1990s and early 2000s. But these charter medallions are only worth money if other owners are out looking to purchase them. When demand is down, there’s no need for supply; it’s why these guaranteed spots only earned former owners like Tommy Baldwin a few million dollars when they cashed out.
Compare that to the Miami Marlins, the MLB team that just sold for $1.2 billion last fall. It makes NASCAR look like a third-rate sport financially by comparison. And the few million you get from selling the darn thing won’t bail you out of debt. You think BK Racing’s charter is worth more than the $9.1 million it supposedly owes Union Bank?
20 years ago, NASCAR didn’t care so much about the future of its private ownership. Teams like Bud Moore, Junie Donlavey and Junior Johnson were allowed to quietly fizzle as there were plenty of big-time corporate sponsors (and multi-car team owners) taking their place. But now that the tables have turned, the charter system is more about protection.
The few big-time owners left that have given a lifetime to the sport stand to lose a piece of the pie once new competition comes to the table. So with money dwindling to begin with, the charter system makes perfect sense. Wouldn’t you want to protect your profits when you see the walls closing in?
For the business model to change markedly, you need some injection of new blood. This offseason, my hope was for a new manufacturer, but the entrance of someone like Dodge won’t happen now until at least 2020. Some sort of major business story needs to jolt the sport and people with money into believing not only that can they come to play at big races like Daytona but that they can profit as well. As we all know, it’s not just about being competitive on the track; the people writing the checks need to make money off it.
That’s why a report by the Sports Business Journal raised eyebrows this week. The in-depth article touched on rumors that some aspect of the sport (or perhaps all of it) could be for sale sometime down the line. NASCAR, of course, vigorously denied such a claim.
Here’s what limited information we know.
- SMI Chairman O. Bruton Smith, his company and even NASCAR CEO Brian France have been linked repeatedly to a potential bid to buy the Carolina Panthers. (Longtime NASCAR owner Felix Sabates is also involved.) The NFL team in Charlotte is for sale after Jerry Richardson agreed to give up a controlling stake after claims of sexual harassment in the workplace.
- NASCAR, for all its excitement surrounding the charter system, has struggled to find new ownership. Its key stakeholders in the sport — four-car Joe Gibbs Racing (Toyota), three-car Team Penske (Ford) and four-car Hendrick Motorsports (Chevrolet) — have owners who are age 77, 80 and 68, respectively. Only Tony Stewart, whose interests are varied outside of the sport, has a major stake in a playoff-caliber team and is under age 50. And Stewart, while owning a stake in NASCAR has a first love involving dirt tracks and sprint cars. He’s not exactly next in line to be the sport’s CEO.
- Track consolidation in recent years (combined with a multi-year agreement keeping them on the schedule) means all but five races a year are run by two entities: International Speedway Corporation and Speedway Motorsports, Inc. That makes tracks easy to package in such a deal.
Now, I don’t think NASCAR is going to be sold tomorrow. But reviving the sport is a two-part process. Just as a new generation of young drivers are poised to invigorate competition, new businesspeople need to find a way to change the model. So far, the charter system has done little more than allow those in power to sit on what they have, cutting costs and trimming the budget to face financial realities.
Does that mean a sale is what’s needed for part two? I don’t know. But certainly, removing the France family from a leadership role in any type of major changeover would turn heads and cause an opportunity for radical adjustments at a business level.
- Speaking of young drivers, ratings from the Advanced Auto Parts Clash, NASCAR’s 2018 exhibition, were up 29 percent year over year. That’s impressive considering the small field (17 cars), no Dale Earnhardt Jr. or Patrick and limited advertising. Clearly, some people are giving Chase Elliott, Ryan Blaney, William Byron and others a chance to win them over.
- Ford fighting to the front in plate races is a decided advantage in a year where their speed will lag behind Chevy and Toyota elsewhere. Look how much Brad Keselowski has won at Daytona and Talladega Superspeedway the past two years. Couldn’t you see a scenario in which Fords use the fall Talladega race, the short track of Martinsville Speedway and a wild card, like the Charlotte Motor Speedway roval, to make the Final Four at Homestead-Miami Speedway? Don’t count out the Blue Oval Brigade juuust yet. It’s early, and there’s plenty of time to make up ground and plenty of smart drivers (like Keselowski) who can get it done even when a step behind.