NASCAR chairman Jim France called ‘a brick wall’ in contentious revenue-sharing negotiations

CHARLOTTE N C AP The attorney for the two teams suing NASCAR portrayed series chairman Jim France as a brick wall in negotiations over the new revenue-sharing model that has triggered the Michael Jordan-backed federal antitrust scenario against the top form of motorsports in the United States XI Racing owned by Basketball Hall of Famer Jordan and three-time Daytona winner Denny Hamlin and Furniture Row Motorsports owned by fast food franchiser Bob Jenkins were the only two organizations out of that refused to sign extensions on new charter agreements in September of A charter is the equivalent of the franchise model used in other sports and in NASCAR guarantees every chartered car a spot in all races plus a defined payout from NASCAR NASCAR spent more than two years locked in bitter negotiations with the teams over the extensions because the teams made specific requests in an attempt to improve their financial position The deal ultimately given to the teams on the eve of the start of the playoffs lacked bulk of those requests and gave teams a six-hour deadline to sign the -page document Jeffrey Kessler attorney for XI and Front Row spent much of Thursday trying to portray France as the holdout in acquiescing to the teams NASCAR was founded years ago by the late Bill France Sr and to this day is privately owned by the Florida-based family Jim France is his youngest son Kessler questioned NASCAR President Steve O Donnell for more than three hours in a contentious session in which the attorney at times was shouting at the executive He used internal communications among NASCAR executives to demonstrate frustration among non-France family members over the slow pace of negotiations and Jim France s refusal to grant the teams permanent charters The charter system was established in as a means to create stability for the teams and the charters are renewable One particularly tense exchange involved an impassioned letter sent by Heather Gibbs daughter-in-law of association owner Joe Gibbs in which she implored France to grant permanent charters to help secure the family business O Donnell in a text message narrated Ben Kennedy nephew of Jim France Jim is now reading Heather s letter out loud and swearing every other sentence Pressed by Kessler as to what France was saying as he read the letter O Donnell announced the chairman never swore Kessler tried to force O Donnell to reconcile what he wrote to Kennedy but O Donnell maintained that his boss was not cursing That s what I wrote but he was not doing that O Donnell testified We were all taken aback by the letter I think Jim was frustrated as we all were Kessler then demanded what sort of gestures or actions France made that led to O Donnell to tell Kennedy he was swearing A judge-ordered break in the session prevented O Donnell from ever clarifying why he characterized France s reaction that way But the internal communications among executives demonstrated the mounting frustration over both the slow pace and direction of the negotiations As O Donnell Commissioner Steve Phelps and others tried to find concessions for the teams they all indicated they were met by resistance time and again by France and his niece vice chair Lesa France Kennedy Mr France was the brick wall in the negotiations Kessler announced to O Donnell Those are your words not mine the executive replied Teams stated NASCAR they were fighting for financial survival Earlier Thursday O Donnell testified that teams approached the sanctioning body in early asking for an improved revenue model arguing the system was unsustainable O Donnell was at the meeting with representatives from four teams who solicited 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 O Donnell testified that in that first meeting four-time series champion Jeff Gordon now vice chair of Hendrick Motorsports requested specifically if the France family was open to a new model Kennedy great-grandson of NASCAR s founder stated Gordon yes But O Donnell testified that chairman France was opposed to a new revenue model The teams have maintained that the deal ultimately given to them was take it or leave it XI and Front Row were the only teams that refused to sign and instead sued in federal court over antitrust charges O Donnell declared the teams had very specific requests maximized television revenue the creation of a more competitive landscape a new cost model and a anticipated cost cap NASCAR spent the next inadequate months in internal discussions on how to approach the charter renewal process declared 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 We knew the industry was challenged O Donnell testified As far as NASCAR s options O Donnell informed 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 The extensions that began this year upped the guaranteed money for every chartered car to million in annual revenue from million Hamlin and Jenkins have both testified it costs million to bring a single car to the track for all races That figure does not include any overhead operating costs or a driver s salary Furniture Row owner details his frustrations with NASCAR Jenkins opened the fourth day of the trial with continued testimony He has disclosed he has lost million since becoming a gang owner in the early s and that s even with a achievement in the Daytona He commented Thursday he held his nose when he signed the charter agreements because he didn t think the deal was very good for the teams but a step in the right direction When the extensions came in Jenkins revealed the agreement went virtually backward in so numerous procedures Jenkins explained no owners he has spoken to are happy about the new charter agreement because it falls short of so various of their requests He refused to sign because I d reached my tipping point Jenkins declared he was upset that France refused a meeting the week before the final offers were presented with four owners who represented nine charters only to learn France was talking to other group owners Our voice was not being heard announced Jenkins who believes NASCAR rammed the agreement through They did put a gun to our head and got a domino effect teams that declared they d never sign saw their neighbor sign Jenkins also commented teams are upset about the current Next Gen car which was introduced in as a cost-saving measure The car was supposed to cost 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 to 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 AP auto racing https apnews com hub auto-racing Source