Originally Published: July 16, 2014 6 a.m.
A group of nine team owners representing 25 cars in NASCAR's premier Sprint Cup series recently announced the formation of the Race Team Alliance (RTA), signaling a potentially seismic change in the sport of stock car racing.
The RTA could be the best thing to ever happen to the sport and the worst nightmare for the France family, owners of NASCAR since it was first organized in 1948. Unlike traditional sports where the governing body is run by team owners who elect a commissioner, when Bill France Sr. formed NASCAR he anointed himself as the benevolent dictator. Although the third generation of the France family now owns NASCAR, little has changed in how the sport operates. NASCAR sanctions races, negotiates national sponsorship and television contracts, disciplines teams and drivers, and makes up the rules of the sport as it goes along.
In addition to NASCAR, the France family controls International Speedway Corporation which owns or operates 13 tracks that host 19 of the 36 races that comprise the Sprint Cup schedule.
In announcing the new alliance, RTA's chairman, Rob Kauffman, co-owner of Michael Waltrip Racing, went out of his way to emphasize that the group is a "business alliance," not a union. Kauffman emphatically stated that the organization's primary goals, at least in the foreseeable future, were to pool resources and buying power to generate additional revenue and reduce costs. In an interview with USA Today, Kauffman mentioned car parts and hotel rooms as expense items the RTA would soon address. He frequently used the word "collaborative" in a calculated effort to avoid sounding confrontational.
Despite Kauffman's conciliatory tone, it's doubtful that the RTA expected NASCAR to welcome the group with open arms. The governing body's initial comments can best be described as a cautious non-response. In a prepared release the company stated that although it was aware of the RTA - Kauffman emphasized that team owners had kept NASCAR apprised of the RTA's intentions - it had "very few specifics on (the group's) structure or purpose. It is apparently still in development and we're still learning about the details so it would be inappropriate to comment right now."
Prior to the Sprint Cup race at New Hampshire Motor Speedway, NASCAR president Mike Helton said in an interview that the sanctioning body would "continue to operate the way we have for the past six decades." Helton went on to say, "Part of our method of operation over the last six decades is to make decisions, and we make those decisions by listening to a lot of individual stakeholders in the garage area. Every car owner in here has a voice, crew members, drivers, crew chiefs. And we take that input and we make what we think are the best decisions that are good for the whole sport. We will continue to operate that way." It doesn't take a code-talker to parse those words: NASCAR will listen to individuals, but don't expect it to negotiate with a collective body as other sports are required to do.
This isn't the first "alliance" in NASCAR history. In 1969, Richard Petty, the most famous and winningest driver in stock car racing history who's also one of the team owners in the RTA, along with a cadre of fellow drivers formed the Professional Drivers Association (PDA). The group led a boycott of Talladega Speedway's first race over concerns with the tires used at the track's high speeds. NASCAR ran the race with replacement drivers and the PDA quickly fizzled. But this is a different era and RTA members have more clout - and investment - in the sport than drivers. It takes a minimum of $15 million to run a Sprint Cup car for the entire season with some team budgets approaching $30 million.
These are critical times for NASCAR. The sport is emerging from a recession that cut sponsorship dollars, race attendance and television viewership. But brighter days appear to be on the horizon. A 10-year, $8.2 billion TV deal with Fox and NBC will kick in next year. NASCAR allocates approximately 65 percent of those revenues to the tracks, 25 percent to the teams and retains 10 percent for itself.
Will the RTA attempt to renegotiate those percentages? Only time will tell. But one thing is certain: More collaboration in the sport is on the horizon.
Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is a Professor in the Sport Management Department at SUNY Cortland and maintains the blog: http://sportsbeyondthelines.com Jordan can be reached at email@example.com.