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12/09 17:13 CST NASCAR chairman refuses to budge on team charters in testimony
during Michael Jordan's lawsuit
NASCAR chairman refuses to budge on team charters in testimony during Michael
Jordan's lawsuit
By JENNA FRYER
AP Auto Racing Writer
CHARLOTTE, N.C. (AP) --- NASCAR Chairman Jim France testified Tuesday in
Michael Jordan's federal antitrust lawsuit against his family that he still has
not changed his mind on granting teams permanent charters, and evidence showed
he entered negotiations on a new revenue-sharing agreement determined to thwart
teams' efforts for a bigger piece of the stock car series' revenue.
France was the final witness called by attorneys for Jordan's 23XI Racing and
Front Row Motorsports on the seventh day of the trial. Those race teams have
accused NASCAR of being a monopolistic bully that engages in anticompetitive
business practices.
Also called Tuesday was Hall of Fame team owner Richard Childress, who
testified that he only signed a 2025 revenue-sharing agreement because refusing
to do so would have put Richard Childress Racing out of business.
NASCAR Commissioner Steve Phelps testified to the frustrating two-plus years of
negotiations between the top motorsports series in the United States and its
race teams. The plaintiffs introduced several documents detailing communication
between NASCAR executives that showed France was stubbornly opposed to granting
teams permanent charters throughout the process.
The charter system is equivalent to the franchise model used in other sports.
In NASCAR, a charter guarantees cars a spot in the 40-car field each week, as
well as specified financial terms.
Asked by plaintiffs' attorney Jeffrey Kessler if he has changed his stance on
making charters permanent, France said, "No, I have not."
Kessler later introduced a summary of notes from the first meeting of NASCAR
executives on how they would approach negotiations with the teams over the new
agreements. Steve O'Donnell, now the president of NASCAR, wrote in those notes,
"Jim's overarching comments --- we are in a competition. We are going to win."
France's position never changed, even though --- as evidence showed --- he
received pleas from Hall of Fame team owners Joe Gibbs, Rick Hendrick, Jack
Roush and Roger Penske. All four are close personal friends, France said on the
stand Tuesday.
Earlier Tuesday, Childress spoke to the pressure he felt to sign the charter
agreement.
"I would not have signed those charters if I was financially able to do what I
do," the six-time championship winning owner testified. "We are a blue-collar
operation."
Childress has participated in NASCAR for 60 years. NASCAR was founded in 1948
by the Florida-based France family and Childress has a longtime personal
relationship with the Frances.
Childress testified that he pleaded with Jim France for the charters to be made
permanent instead of renewable, and France refused.
Childress testified he supports the charter system that was implemented in 2016
when race teams "were worth 10 cents on the dollar at most. We didn't have
nothing."
He admitted that the charters added value to his team, but said the equity
falls short of its financial potential if the charters were permanent.
In a declaration of his dissatisfaction with the system, Childress insisted
NASCAR attorney Christopher Yates read sentences in which he explains the
charters needed to be permanent. He said he added those sentences to a
declaration that had been given to him to sign.
Childress was at times contentious with Yates, partly because he was determined
to show his displeasure over not receiving permanent charters.
He said he only accepted the offer in 2024 when Hendrick Motorsports said it
was signing and "all I know is financially we would be out of business" if he
did not follow suit.
Phelps details negotiations with Jordan's team Earlier Tuesday, NASCAR's commissioner noted that Jordan's financial advisor would not compromise on key issues. Phelps, who was president of NASCAR during the negotiations, said Jordan right-hand man Curtis Polk was the lead representative for the teams and held firm in their demand for increased revenue, permanent charters, a voice in governance and one-third of any new revenue streams. The deal finally presented to the teams in September 2024 did not include permanent charters or a voice in governance, but NASCAR gave the teams a firm deadline to accept its final offer or forfeit their charters. 23XI Racing, owned by Jordan, Polk and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins, were the only two teams out of 15 organizations that refused to sign. They sued instead. Phelps, promoted to become NASCAR's first commissioner earlier this year, testified that he worked hard to get the teams the best deal possible. But he said the teams' initial request for $720 million in revenue a year guaranteed to them would have put NASCAR out of business, and communications between NASCAR executives showed that the France family would not budge on permanent charters. At the same time, Polk would not budge, either. "It was one of the most challenging and longest negotiations I've ever been part of," said Phelps, who admitted he didn't particularly enjoy negotiating with Polk, who was at the time the representative for the "Team Negotiating Council." "The TNC never wavered off their four pillars. It was just the same thing, the same thing, and that was very frustrating," Phelps said. Phelps testified at one point that NASCAR believed it had landed on a new charter agreement that satisfied the teams but it was contingent on NASCAR finalizing its new media rights deal. "I thought we'd just plug in the numbers," said Phelps, who testified NASCAR was hoping to land a media deal worth $1.2 billion. When it became clear the media rights deal wouldn't net that much money, Phelps said the teams asked to set a floor in negotiations. NASCAR ultimately got a media deal worth $1.05 billion --- still an increase of $33 million a year from the previous deal --- and Phelps said "every dollar" went to the race teams when it began this year. However, the ultimate revenue payout to teams is $431 million annually, the charters are not permanent and the teams did not get a voice in rules and regulations. Even so, Phelps testified he believed the charter agreement was "a fair deal." ___ AP auto racing: https://apnews.com/hub/auto-racing |
