--- NASCAR Teams Take Control ---

[BeachBum]

RTA could mean an SOS for NASCAR

 

 

 

Nate Ryan, USA TODAY Sports 7:28 p.m. EDT July 7, 2014

(Photo: John David Mercer, USA TODAY Sports)

 

In the release announcing what potentially could trigger a paradigm shift in the NASCAR business model, a form of "collaborative" appears four times.

It's a rather overt attempt to defuse the perception that "contentious" would be a better way to describe the formation of the Race Team Alliance, the federation of nine Sprint Cup teams announced Monday that represents 25 cars and every significant star driver in stock-car racing.

 

Ostensibly, the formation of what could be construed as a de-facto owners union was framed by chairman Rob Kauffman as a "business alliance." Kauffman, the co-owner of Michael Waltrip Racing, said RTA's primary goal was as a cost-cutting vehicle by creating economies of scale that would save teams money through deals on hotel rooms, air travel and crew members' insurance.

 

 

 

NASCAR's most powerful teams form Race Team Alliance

 

But the ramifications could be far larger for NASCAR, which has been insulated from the market forces that have affected other sports with unionized players and franchised team owners.

 

Those powerful entities have been absent in NASCAR, which has operated since its 1948 inception as a "benevolent dictatorship" in which competitors are viewed as independent contractors who compete at the pleasure of the sanctioning body.

 

"This is the first time since the Professional Drivers Association disbanded in the early '70s that NASCAR will see an organized group of car competitors," former Charlotte Motor Speedway president H.A. Humpy Wheeler said in an email to USA TODAY Sports. "Call it what you may, this group together will represent a powerful force that must be reckoned with by sponsors, NASCAR and the tracks. On the surface, it appears like vanilla ice cream but underneath it could be loaded with salsa."

 

The Professional Drivers Association, which was formed by Richard Petty to boycott the 1969 opening of Talladega Superspeedway, is a cautionary tale that illustrates why Monday's news sent aftershocks through the NASCAR industry. Attempts at organizing against the powers that be in auto racing rarely have ended well. The PDA disintegrated shortly after NASCAR ran Talladega with replacement drivers, and any whisper of a union since then has been greeted with great trepidation.

 

Many of the woes that have afflicted the IndyCar Series over the past two decades can be traced to car owners' insistence on calling the shots. The now-defunct Championship Auto Racing Teams was formed after teams grew frustrated with the United States Auto Club. That planted the seeds for the Indy Racing League and the split that decimated the fan base and sponsorship in IndyCar.

 

NASCAR seems a long way from any sort of civil war. But the timing of the RTA – six months before the beginning of a new 10-year, $8.2 billion deal with Fox and NBC, smacks of a power play, and its release highlights building revenue as one of its objectives.

 

 

NASCAR Q&A: Rob Kauffman on new Race Team Alliance

 

Kauffman downplayed that in an interview with USA TODAY Sports, noting there are ways to generate cash without taking it.

 

The easiest way, though, would be for NASCAR to increase the owners' piece of a multibillion-dollar pie. Under the current network deal, NASCAR has used a complicated formula that doles out roughly 65% of money to tracks and promoters, 25% to teams and 10% to NASCAR.

 

While Sprint Cup sponsorship has rebounded slowly since the recession, the budget for fielding a championship-caliber car has remained in at least the $15 million-$20 million range, and that has left team owners privately grumbling for more help.

 

The dilemma is the solution might not be as simple as track promoters posting larger purses. Tracks operate on long-term plans with business commitments constructed over periods as long as 30 years and formulated on the current business model. If it's changed significantly, tracks might have trouble making ends meet on their end. Many already are hurting on attendance and are more reliant on TV money than ever before.

 

"Pressure will be put upon the tracks to significantly increase purses, and that is where the big problem could erupt," Wheeler said. "When there were big sponsorships and low costs, the big car owners did fine. Not so now, so the only way they can significantly make it is to put pressure on the purses. That will be when the potential crash could come.

 

 

Brian France says 2015 schedule merits 'robust' talks

 

"Hopefully, this group will help bring this sport back. However, there will be severe roadblocks and we must hope that cooler heads will prevail in the definite moments of crisis that will follow this. This could be a good thing, or it could cause change like we haven't seen since 1969-70."

 

It could become a tug-of-war that is a gut check for NASCAR chairman Brian France, whose organization offered little comment Monday on the RTA.

The silence of other team owners on the issue also is telling. The eight teams other than MWR deferred all requests for comment to Kauffman, who could be viewed as the perfect face for playing hardball with NASCAR.

 

He is a relative outsider. As the founder of a hedge fund whose net worth once was estimated by Forbes at more than $1 billion, Kauffman, 50, is accustomed to playing high stakes and can get his hands dirty in a way that wouldn't work for moguls Roger Penske and Rick Hendrick, who have deep ties to the France family that have been cultivated over three decades competing in the sport.

 

Kauffman, though, also has major skin in the game, having saved MWR from implosion eight years ago. He is the most recent owner of a high-profile team to have entered NASCAR, which has been working incessantly to devise methods of decreasing the barrier to entry and creating fresh ownership blood.

 

Now the focus might shift to how to keep its current owners happy. That will require a collaborative effort.

 

And in racing, that usually means a contentious one.