NASCAR President Steve Phelps touts sport’s growth, work to do
AVONDALE, Ariz. — NASCAR President Steve Phelps touted the sport’s growth in his state of the sport Friday at Phoenix Raceway before addressing questions about the racing at short tracks and road courses, officiating, team ownership model, the 2024 schedule and more.
Phelps noted the record-tying 19 different winners, including the first three playoff races won by non-playoff drivers, the reaction to Ross Chastain’s video game move at Martinsville, how Sunday’s Cup race at Phoenix will be the season’s ninth sellout, up from five last year, and that ticket sales were up this year from last year by more than 20%.
Here is what Phelps and Steve O’Donnell, chief operating officer, had to say on a variety of subjects:
On the 2024 schedule:
Phelps: Do we believe there’s interest north and south of the border specifically? Yeah, there’s interest. You talk about the Chicago street course. Ben Kennedy and Steve O’Donnell, their phones are ringing from cities across the country that are like, We would love to host a NASCAR race at our city. We do have calls coming, as I said, north and south of the border.
Whether that happens in 2024 or not, I don’t know. What I do know is we’re going to have continued schedule variation in 2024.
On improving the racing at short tracks and road courses
O’Donnell: For sure looking at some aero changes for both short tracks and road courses. We have a lot of dialogue going on with the drivers in terms of potentially looking at some power things. I think that’s a little more complicated. There are some things we’ve looked at even through Garage 56 (the modified Cup car NASCAR will run at next year’s 24 Hours of Le Mans) that we found from an aero standpoint that could be put in place as early as next year for both short tracks and road courses.
The good news is continuing to dial in on the intermediates which we believe we’re in a really good spot, but then really focus on the short tracks and road courses.
On how teams can be more financially viable
Phelps: We fully believe that having profitable teams does lead to more competitive racing. If you look at it, there are two areas to do it: increasing revenue, which we have every intention of doing with our race teams, and controlling expenses, right?
The teams have asked us to control expenses. Where those come from, I don’t know. That will be up to the race teams to determine the best way to figure out how they would control those expenses.
I’m not suggesting that we have a specific discussion around what that would be or the mechanisms that we put in place. The teams, the idea of having caps, floors, ceilings, luxury taxes.
We’ll continue to have dialogue with our race teams. The charters go through the end of 2024. We will have meaningful dialogue with our teams next year, I’m sure. We’ll figure out what is going to be a fair opportunity for all stakeholders. Moving forward in 2025, what that looks like, I don’t know. It will absolutely have to be around both revenue increases as well as some type of expense restriction in some way.
On if NASCAR wants the charter system to continue after 2024 when current arrangement expires:
Phelps: I think the charter system has been very good for NASCAR. I think if you look at it, there are many positive things.
What do you get when you buy a charter? You get three things. You get guaranteed entry into the race, which helps the teams from a sponsorship standpoint. You get two pieces of revenue: fixed revenue and then revenue you compete for on the racetrack. The third piece is governance.
Steve (O’Donnell) and the top competition guys, they’ve got meetings all the time with the race teams to move the sport forward from a competitive standpoint.
So I would say the charter system, although not perfect, has worked really well. You look at the enterprise value, which I’m not going to get into what charters are going for, what they were at, but the number right now is a significant multiple of what it was three years ago.
We have people out there that want to get charters who are both in the sport and are outside of the sport that can’t get them right now because the teams are holding them. That’s their right. Whether we want that to happen or not, there’s nothing we can do about that.
To answer your question fully, do I think we’ll extend the charters? I do. Do I think it’s a good thing for the sport? I do.
On media rights deal, which expires after 2024 season
Phelps: With respect to where we go from a television standpoint, our relationship with FOX and NBC has never been better, ever. It is at a level that we haven’t seen from a television perspective since the early 2000s when kind of this whole new model came to be. That’s done through a lot of hard work. It’s done because the sport, its ratings have stabilized and grown.
You look at our share over the last just two years, share this year for NASCAR Cup races, plus 11%, share last year for NASCAR Cup races, plus 14. Our share has increased in two years by 25%, while our friends at FOX and NBC have sold out their inventory.
The sport is having a moment on television, but it’s also having a moment on our own digital and social channels, our own channels. On NASCAR digital, we haven’t seen numbers this high since 2005. There’s something that’s coming here.
I’m not sure where the future’s going to be with respect to our media partners. I do know that it will go through NBC and FOX. Whether there are additional folks that want to come bid and we get to that particular point, I have no idea.
I do know there is a significant amount of interest in NASCAR from those that are not our incumbents. That’s a good thing for our industry, right? Frankly, our media deal, it feeds a lot of mouths in this industry. It’s important to do that. It is the future of what healthier teams look like. It’s the future of continued investment in capital at our racetracks, continued investment in expenses around creating better fan experiences that we talked about before.
On NASCAR’s officiating this season
O’DONNELL: All in all I would say for the amount of races that we have, the number of calls we have to make or not make, pretty good success record.
Having said that, you can always do better. One of the biggest challenges in our sport is there’s no timeouts, we don’t send it back to New York or somewhere else. We have to make an instant call and we’ve got to live with that.
That’s really reliant for us on the technology in race control, we rely on our television partners who do a great job, but it’s not their job to officiate the race. If we are missing a camera angle, that’s on us to fix and make sure we are those things in place.
If you take Texas, for instance, one of the angles we should have had in race control, we didn’t. Next week we did. We have every single in-car where we were able to see it.
We’ll go back and make sure where do we make mistakes, what technology do we need to really make those decisions in a more timely fashion because we want to make those at the racetrack versus during the week.
The second part was around our drivers. We’ve been very vocal on we don’t want to see anyone using the car as a weapon on the track, right? That’s number one. The drivers have been vocal in saying, Let us handle our business ourselves.
With that comes a balance, though. I think you saw that balance last week. I would say that’s right at the line, if not crossing the line, in terms of the Xfinity Series.
If you look at how we have officiated those calls this year, we have not issued any penalties. So our job in the off-season will be to talk to the drivers, get their feedback on where should that line be. Still up to us to make the decision. But I think you’ll see some more consistency in terms of what we may do and react to what happened last week with a penalty of some kind for 2023.