NASCAR facing the future in State of the Sport press conference

NASCAR is in a season of change.

Some of it is the result of self-reflection and the changing tides of sport and entertainment, and some of it will eventually be the results of the lawsuit brought against the Sanctioning Body, but things are changing in the Cup Series and around it.

That is a broad summary of the annual state of the sport press conference held every year before championship weekend by league commissioner Steve Phelps and president Steve O’Donnell.

Just like last year, when the 23XI and Front Row Motorsports lawsuit was still fresh and there has been an entire year of developments — NASCAR still would not take questions on the matter.

However, Phelps did prepare a six minute statement over all the latest developments, including the public release of the charter agreement, and a dismissal of its countersuit against the teams.

Phelps’ lawsuit prepared statement

In each of the past two years, I’ve sat here and told you the same thing: healthy race teams are critical to our sport. We’ve been true to our word. From the outset, we’ve been clear, this is not an anti-trust case.

The 2025 charter agreement is an improvement on the 2016 framework with enhancements that reflect real progress for teams and the sport, including over $3 billion in guaranteed payments to the teams, enterprise value that is roughly $1.5 billion now to the race teams, guaranteed starting positions each week that allow teams to sell sponsorship on the best billboards in sports, the Next Gen car, and charters guaranteed for 14 years until at least 2039, plus an obligation to negotiate in good faith beyond that.

The bottom line here is NASCAR is committed to charters. I also want to be clear: the France family started NASCAR in 1948 using their own resources, grit and ingenuity. They have taken countless personal and financial risks, investing billions of dollars and untold hours into growing this sport to create opportunity for teams to race in front of fans for nearly eight decades.

We are proud of what we built for fans together with the race teams, especially since the charters were introduced. As you saw in the race team declarations, the charter system is a critical part of the sport, something we created with and for the teams. We’ll continue to defend and preserve it. Make no mistake, the lawsuit puts this at risk.

We remain committed to doing what is best for the sport of stockcar racing, for the race teams we partner with, the many stakeholders who engage with it, the people throughout the garage that depend on it, and of course the millions of fans that love it like we do, and just want to see more of the best racing in our history.

Although we’d prefer this lawsuit was never brought to us, we remain confident in our case before a jury and, if necessary the Fourth Circuit. We remain optimistic that we can continue to work towards a resolution to this litigation that allows us to return our focus to racing, which is what we all want.

The financials of this sport have been unsealed and made available to the court. It may sound counterintuitive, but that’s not something we at NASCAR are hiding from. In fact, I encourage you to really think about what you’re seeing and how it comes to life each weekend for fans, partners and race teams.

Our goal has always been to create the best fan and partner experience in sports. We invest in that every year through our people, our tracks, the racing product and how we run the business. It’s been a guiding principle for almost 80 years and four generations of France family stewardship.

With that in mind, I’d like to highlight a few fundamental points about this litigation, the business of NASCAR.

NASCAR is more than just the Cup Series. Our business includes other national series, and we support both regional and international series.

Our sport is built on families, relationships, and trust that we earn every day. We depend on each other as partners, promoters and fan ambassadors for motorsports. Some of them accepted less to accommodate the new charter agreement, families like the Smith family, who run Speedway Motorsports, the Mattioli family at Pocono, and Roger Penske at Indianapolis Motor Speedway.

NASCAR’s balance sheet has more than $1.2 billion in invested capital, meaning the vast majority of what we make is invested back into the sport, our race teams and our people. It’s the core principle of how we operate and a recognition of our importance in motorsports broadly.

Between track operations, new races, safety administration of the sport, charter payments and taxes across our multi-state operations, our role as the sanctioning body requires tremendous and often unpredictable expenses. Ensuring we have adequate funds to cover unforeseen circumstances or opportunity for expansion is critical and responsible business.

We have significant debt payments from the IC merger that transformed our business and our schedule, as well as other business-critical liabilities that ensure we can operate the sport year to year.

We aren’t like other sports in this regard. We have unique commitments.

Teams receive about $1.1 billion per year from their sponsors and from NASCAR combined. In the charter negotiation, we hope to better align our collective futures around a model that facilitates mutual growth through three main ideas: increase revenue for the teams, which has happened. Agreed-upon cost structure. Costs of materials for building the cars is down about 40%, and we work with teams on a cost structure, but haven’t yet come up with a formula that we agree upon. And then the Driver Ambassador Program and sending driver participation to join us in growing the sport.

We believe our charters are fair and equitable. We did our best to support the race teams without destabilizing our sport and compromising our ability to deliver for fans well into the future.

NASCAR is fully aligned with our race team partners who have submitted declarations hoping to end this litigation. We are trying our hardest. I am trying my hardest both as a fan as well as the commissioner of this sport that I’ve loved since I was five years old.

While two of the teams of 15 teams may not share that view and seem set on an unfortunate court battle, I hope that we can all agree that our racing is as good as it has ever been and we care about how we serve our fans, especially as we look forward to capping off our season by celebrating new champions across all of our national series.

Nascar President, Steve O’Donnell

Photo by: Jared C. Tilton/Getty Images

Future championship format

Phelps and O’Donnell did not want to get into great deal about what NASCAR is thinking regarding the next iteration of a championship format, mostly because they felt doing so now would undermine the champions that will be crowned this weekend.

However, it’s no secret that NASCAR is exploring one of three different options.

An elimination format with a four race final round, instead of one
A return to the 10-race Chase for the Championship
A return to the 36-race full season format last used in 2023

Fans had largely rejected the one-race final to decide a champion due to the small sample size nature of the format, thus, NASCAR has conducted a series of meetings with industry representatives to volley numerous ideas.

O’Donnell praised the work that has come from that group.

“Tim Clark has led a committee that has included almost every stakeholder in the industry — OEMs, tracks, teams, former drivers, current drivers,” O’Donnell said. “We’ve kicked around a ton of ideas. While there’s nothing to announce today, I think all of us agreed that it would not be fair to come in here before we crown champions and say, ‘Hey, we’re thinking of this.’

“I can say that Steve (Phelps) and I have certainly heard the industry, understand the challenges that are out there. So the goal is to balance some of those moments that we’ve had with the great racing, but also deliver a little bit more of I think what the fans and the industry is asking for.”

O’Donnell said NASCAR has opened itself up to having conversations about the format due the argument that something that could be perceived as random actually hurts star power.

For example, Corey Heim has 11 wins in the Truck Series this year and Connor Zilisch has 10 in the Xfinity Series, and it’s possible that neither will win the championship and when they eventually make it to Cup, their lack of a championship undermines their success from a public facing standpoint.

“One of the concerns is future drivers coming up through the system, having multiple wins, and not necessarily winning a championship,” O’Donnell said. “I think that’s a challenge for a sport where I think the light really goes on is having that driver be deemed a potential superstar.

“We looked at this. I think we all did, looking at more moments, more drivers, more drivers having the ability to go out there and win. That maybe takes away from the one-driver story. “It’s probably harder to write just the one-driver story over and over again, but it does create a real star.

“I think that’s something that as you look at the future of the sport, making sure that a driver who has delivered all season long has the ability to be named a champion, and not have something maybe come down to one race, that’s really been the focal point, is we want to reward winning. We’re going to continue to do that. Whatever model we come up with, winning is very important.

“The one-race thing has been a factor of there’s a lot of circumstances that can happen. Our fans, right or wrong, are different than other stick-and-ball sports. That’s okay.”

O’Donnell says, as a New York Giants fan, that when his tea, beat the undefeated New England Patriots in 2007, no one questioned the legitimacy but NASCAR has learned that their fans don’t view their sport in this regard.

EV and Alternate Fuels?

At the start of the decade, NASCAR was looking to incorporate electrification into its racing product, but then as that market started to fade domestically, the Sanctioning Body looked around the world at alternative fuels.

The point being, NASCAR cares about sustainability but it has to be thoughtful about what direction its manufacturers want to lead it. To that point, NASCAR and ABB Group have built an electric show car that has turned laps at Los Angeles, Chicago and Wilkesboro but O’Donnell also said that project is a work in progress as Detroit figures out where it wants to go.

“I would say ABB has been an incredible partner when we’ve looked at the electronification model,” O’Donnell said. “We’ve learned a lot and showcased that I think we can do some things, show it to the fans, show what kind of might happen.

“From there you get into discussions about what could be from a hybrid. There’s hydrogen, all different kinds of things out there.

“I think what it’s done is allowed to us have the discussions with the OEMs about the future and get way ahead of this now, learn some of the things from IMSA on what they’ve done, what’s worked, what’s been really expensive.”

Again, O’Donnell says they are being ‘methodical’ and thoughtful about whatever will come alongside or after internal combustion engines. And keep in mind, that the NextGen car was specifically designed to handle a variety of different power plants.

“We don’t want get ourselves in a box if you make a hybrid call and it’s the wrong call, then you got to go back,” O’Donnell said.

“Steve talked about Ram coming in, potential for new OEMs coming in. All that conversation is happening now to make sure that whatever model we put in place is something that our GM folks there in the back, they can go out and sell more vehicles based on what’s happening on track. That’s the ultimate goal for us.”

Super Bowl conflicts

NASCAR has already moved the 2027 Daytona 500 off President’s Day weekend in advance of avoiding the Super Bowl and as the NFL moves towards adding another game to its slate, it will force NASCAR to have to move again and O’Donnell is prepared for that reality.

“We want to avoid the Super Bowl, for sure,” O”Donnell said, and then, before laughing, “A fairly large event with some viewers. Listen, they are an amazing product, they’re an amazing league. The Daytona 500 is our Super Bowl. Again, creating some distance and not overlap is something that we’ll continue to make sure that we do.”

TV ratings

NASCAR has had a bit of a brutal ratings stretch for events that were on USA Network and not on NBC.

Many of the races on USA were struggling to get over a million viewers. On the other hand, races on NBC still cleared two million. Meanwhile, the races on Amazon Prime were around 2 million too.

Phelps says he is not concerned.

“When the season started, because of the distribution changes to be less broadcast heavy and more cable heavy and streaming, we knew we were going to have a reset,” Phelps said. “We had projected that that reset and told everyone in our industry that reset would be between 14 percent and 15 percent in Cup.

“We also told them we probably have a double-digit increase in Xfinity. Then Trucks would be where Trucks are because the distribution stayed the same primarily on FS1 and some FOX.

Right now as we sit, our ratings in Cup are down 14 percent, exactly what we predicted. I think the FOX portion of the season was really strong in terms of how they did from a ratings perspective.”

Overall, races on broadcast TV have averaged just over 3 million viewers for the entire season and cable races have averaged just above 2 million overall, a lot of both being lifted by the early season FOX boom.

Meanwhile, the Xfinity Series has averaged over a million viewers on the CW Network.

“I think that Xfinity exceeded a lot of kind of experts’ opinions about what their audience would be,” Phelps said. “We surmised that the audience makeup of Amazon would be younger, and it was by about six years. Then the production value that FOX and NBC have had traditionally, amazing.

“Everyone just raised their game. Amazon’s production was tremendous. Turner Sports was tremendous. NBC already had a high bar, right? The Turner numbers were slightly softer than we thought they would be, slightly, but in line with the projections.

“I would say the cable portion of the NBC package has been a little softer than we had expected. Bounce back on the NBC races, I think we’ll have a decent rating here on Sunday.

“Again, the expectation moving forward, now that we have had the reset, is that we are going to grow. We’re going to grow because we have the best racing in the world, our stars are going to be more out there, we’re creating better content, all the things that make fandom.

“Again, are we concerned about where the ratings are? No, it’s exactly where we thought they’d be.”

Creating stars

Phelps praised the industry for all the ways they have changed its approach for building mainstream star power.

The most notable thing Phelps says is working is the ‘Driver Ambassador Program’ which pays drivers per terms laid out in the charter agreement, to do mainstream or popular media appearances promoting the sport.

“The more opportunities we give to them, the more opportunities they step up and take, the better it is for the growth of this sport,” Phelps said of the DAP.

“We are only going to be as good as what we can provide to the drivers and the access that we provide the drivers to get in front of. Whether that’s early morning shows, late night shows, Sesame Street — I know Bubba did that earlier this year — all these things are opportunities to meet a fan or a potential fan where they are. That’s what we need to do.

“Another example of that are some of the things that we’ve done with platforms like Roblox or Fortnite or Substack. We have to meet folks where they are.”

Phelps says the new NASCAR 25 video game created by iRacing Studios is doing really well.

“Overall, meeting fans where they are is critical,” Phelps said. “Another thing that I think is really important in addition to all of that, again, meeting where they are, is the use of data. So data doesn’t sound super sexy, but understanding who our fans are, a data warehouse that’s over 20 million strong, is an opportunity for us to use the production facility that we have, that we built, world class, that is producing better content and more content, which is why our digital and social numbers are the highest they’ve ever been. Never been higher. That’s because of great content.

“The ability for us to do both short-form and long form-opportunities. When you think about long form, the Netflix show, or on Amazon the Earnhardt documentary, or “American Thunder,” or the series that’s coming out in a couple weeks on YouTube, “RISING.” These are all opportunities to showcase our drivers, showcase our sport, take the helmets off of our drivers and have people understand what an amazing sport this is.”