CHARLOTTE, N.C. (AP) — NASCAR teams went to the sanctioning body in early 2022 asking for an improved revenue model and argued the system at the time was unsustainable, the president of the series testified Thursday in the antitrust case lodged against the top motorsports series in the United States.
Steve O’Donnell, named president of NASCAR earlier this year, was at that March meeting when representatives of four teams asked that the negotiating window on a new charter agreement open early because they were fighting for their financial survival. The negotiating window was not supposed to open until July 2023.
O’Donnell testified that in that first meeting, four-time series champion Jeff Gordon, now vice chair of Hendrick Motorsports, asked specifically if the Florida-based France family was “open to a new model?”
Ben Kennedy, the great-grandson of NASCAR founder Bill France Sr., told Gordon yes.
But O’Donnell testified that NASCAR chairman Jim France was opposed to a new revenue model.
Thus began more than two years of bitter negotiations on a new charter agreement that was finalized in September 2024. The teams had asked in that first meeting for a deal to be reached by July 2022.
When the final deal was presented to the teams on the eve of the 2024 playoff opener, they were given a six-hour deadline to sign the charter agreements. All but two of 15 organizations signed; Front Row Motorsports and Michael Jordan-owned 23XI Racing refused to sign and instead sued, bringing the case to federal court for what is expected to be a two-week trial.
O’Donnell testified that the team representatives had very specific requests: maximized television revenue, the creation of a more competitive landscape, a new cost model and a potential cost cap.
NASCAR spent the next few months in internal discussions on how to approach the charter renewal process, said O’Donnell, who was called as an adverse witness for the plaintiffs. NASCAR acknowledged the teams were financially struggling, and worried they might create a breakaway series similar to the LIV golf league.
In a presentation made to the board, O’Donnell listed various options that both the teams and NASCAR could take. O’Donnell noted the teams could boycott races, build their cars internally, and race at non-NASCAR owned tracks, or potentially sell their charters to Liberty Media, the commercial rights holder for Formula 1.
“We knew the industry was challenged,” O’Donnell testified.
As far as NASCAR’s options, O’Donnell told the board it could lock down an exclusivity agreement with tracks not owned by NASCAR, dissolve the charter system, or partner directly with the drivers.
A charter is the equivalent of the franchise model used by other sports leagues, but in NASCAR it guarantees a team a spot in the field for all 38 races plus a designated percentage of revenue. The extensions that began this year upped the guaranteed money for every chartered car to $12.5 million in annual revenue, from $9 million.
Denny Hamlin, co-owner of 23XI, and Front Row owner Bob Jenkins have both testified it costs $20 million to bring a single car to the track for all 38 races. That figure does not include any overhead, operating costs or a driver’s salary.
Jenkins opened the fourth day of the trial with continued testimony. On Wednesday the fast-food franchiser said he was a passionate NASCAR fan who fulfilled a longtime dream when he was finally able to own a car in the top racing series in the United States.
But he said he has lost $100 million since becoming a team owner in the early 2000s — and that’s even with a 2021 victory in the Daytona 500. He said Thursday he “held his nose” when he signed the 2016 charter agreements because he didn’t think the deal was very good for the teams.
When the extensions came in 2024 the weekend the playoffs opened at Atlanta Motor Speedway, he said the 112-page document went “virtually backward in so many ways.” He refused to sign and joined 23XI in filing a lawsuit.
Jenkins said no owners he has spoken to are happy about the new charter agreement because it falls short of so many of their asks. He refused to sign because “I’d reached my tipping point.”
Jenkins said he was upset that Jim France refused a meeting the week before the final 2025 offers were presented with four owners who represented nine charters, only to learn France was talking to other team owners.
“Our voice was not being heard,” said Jenkins, who believes NASCAR rammed the 2025 agreement through. “They did put a gun to our head and got a domino effect — teams that said they’d never sign saw their neighbor sign.”
Jenkins also said teams are upset about the current Next Gen car, which was introduced in 2022 as a cost-saving measure. The car was supposed to cost $205,000 but parts must be purchased from specified NASCAR vendors and teams cannot make any repairs themselves so the actual cost is now closer to double the price.
“To add $150,000 to $200,000 to the cost of the car — I don’t think any of the teams anticipated that,” Jenkins testified. “What’s anti-competitive is I don’t own that car. I can’t use that car anywhere else.”
