NASCAR President Steve O’Donnell Testifies

NASCAR President Steve O’Donnell, one of the top executives of the organization, took the stand on Thursday, December 4 in the NASCAR Trial over anti-trust practices in Federal Court in Charlotte, North Carolina.

O’Donnell revealed during his testimony that the France Family that owns NASCAR were against any changes to a new revenue model that was sought by the teams, Jenna Fryer of the Associated Press reported.

A charter is the equivalent of the franchise model used by other sports leagues, but in NASCAR it guarantees a team a spot in the field for all 38 races plus a designated percentage of revenue.

NASCAR is being sued by 23XI Racing and Front Row Motorsports for anti-trust violations claiming it operates as a monopoly. Basketball Hall of Famer Michael Jordan and three-time Daytona 500 winner and NASCAR star Denny Hamlin co-owns 23XI Racing. Bob Jenkins is the owner of Front Row Motorsports. Those were the only two organizations of the 15 in NASCAR that did not sign agreements in 2024 on new charters.

NASCAR Triall Details On Day 4

According to the AP report, NASCAR teams went to the sanctioning body in early 2022 asking for an improved revenue model and argued the system at the time was unsustainable, the president of the series testified Thursday.

O’Donnell, who was named president of NASCAR earlier this year, was at that March meeting when representatives of four teams asked that the negotiating window on a new charter agreement open early because they were fighting for their financial survival, according to AP. The negotiating window was not supposed to open until July 2023.

O’Donnell revealed the first meeting included Hendrick Motorsports Vice Chairman Jeff Gordon, a four-time NASCAR Cup Series Champion. Gordon asked if the France family would consider a new business model.

According to O’Donnell, Ben Kennedy, the great grandson of NASCAR founder Bill France told Gordon they were open to a new model.

O’Donnell, an adverse witness by the plaintiffs of the lawsuit, testified on Thursday that NASCAR chairman Jim France was opposed to a new revenue model, according to the AP.

That began a bitter negotiation period for a new charter agreement that was final in September 2024. The teams wanted a deal to be concluded by July 2022. NASCAR presented the new charter agreement on the weekend when the NASCAR Cup Series Playoffs began in 2024 and had a six-hour deadline to sign the agreement.

Thirteen of 15 organizations signed with Front Row Motorsports and Michael Jordan-owned 23XI Racing refusing to the deal. That has led to the lawsuit that is being here in the first week of what could be a two-week trial.

O’Donnell Gives Additional Details On Team Requests In Current Charter Negotiations

During testimony, O’Donnell said team representatives had very specific requests: maximized television revenue, the creation of a more competitive landscape, a new cost model and a potential cost cap, the AP reported.

That began an internal discussion at NASCAR on the approach to the charter renewal, O’Donnell said.

Although NASCAR acknowledged the teams were financially struggling, the main concern was the possibility of breakaway series similar to the LIV golf league. O’Donnell had various options that he told the board at NASCAR including possible race boycotts by teams, building their own race cars instead of the customer-based Next Gen model and competed at tracks that are not owned by NASCAR. He also believed teams could potentially sell their charters to Liberty Media, which owns the commercial rights to Formula 1.

O’Donnell advised the board to 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 $12.5 million in annual revenue, from $9 million, according to AP from documents revealed in the trial.

NASCAR Trial Plaintiffs Reveal Financial Details Of Competition

Earlier this week, Denny Hamlin, co-owner of 23XI, and Front Row owner Bob Jenkins said it costs $20 million to bring a single car to the track for all 38 races, no including overhead, operating costs and driver’s salary.

Jenkins continued his testimony when the trial reconvened on December 4. He revealed he has lost $100 million since becoming a NASCAR team owner in 2004 and “held his nose” when he signed the original charter agreement in 2016, according to The AP.

He stated in court that the current charter agreement was “virtually backward in so many ways.” He refused to sign and joined 23XI in filing a lawsuit.

“I’d reached my tipping point,” Jenkins said in court. “Our voice was not being heard. They did put a gun to our head and got a domino effect — teams that said they would never sign saw their neighbor sign.”

Later, Jenkins said, “To add $150,000 to $200,000 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.”

The current Next Gen car was introduced in 2022 and was supposed to cost $205,000 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, according to AP.

NASCAR Trial Has Other Interesting Financial Findings

Bob Pockrass of FOX Sports reported that O’Donnell’s testing revealed his salary of $1.2 million plus bonuses, that NASCAR lost $6 million on the Mexico City race and lost $55 million in three years in the spectacular, but troubled race in downtown Chicago.

NASCAR stuck with the Chicago races because O’Donnell said Amazon would not have agreed to sign as a media right partner without those events.

NASCAR Trial Response From NASCAR

NASCAR Communications issued the following response to the day’s proceedings at 6:17 p.m. Eastern Time on December 4. Here is the response in it’s entirety:

“Concluding his testimony this morning, Front Row Motorsports (FRM) Owner Bob Jenkins admitted he incorrectly stated that it costs FRM $20 million per season to a run a single car in the NASCAR Cup Series. The Defense cited FRM’s own financial records, which showed that the most it has spent in a year on runningtwo Cup Series car was around $28 million ($14 million per car).

• Jenkins also admitted that he incorrectly stated FRM’s finances by including losses from the NASCAR CRAFTSMAN Truck Series, which is completely unrelated to this lawsuit and the Charter system which is only in the Cup Series.
• Jenkins confirmed that race teams received another proposed 2025 Charter agreement on Friday, Aug. 30, 2024 – a full week before the Sept. 6 deadline that NASCAR ultimately extended for 23XI and FRM to further review the document they ultimately decided not to sign.
• NASCAR President Steve O’Donnell took the stand late morning. In his testimony, he shared that his goal has always been to “grow the sport” and stated unequivocally: “Our intent was always to renew the charter agreement.” O’Donnell added that when he refers to NASCAR, he “always think[s] about all the stakeholders. That’s always been my job, so when I say we, that’s what I mean.”
• He also noted repeatedly how he fought on the teams’ behalf during negotiations, reflecting his goal to balance the interests of all stakeholders within NASCAR and help ensure their shared success.
• O’Donnell clarified how the revenue NASCAR draws from its tracks – a function of the strong partnerships between NASCAR and those tracks – is a crucial source of the revenue it provides to racing teams.
• He also discussed how NASCAR runs events at tracks it doesn’t own and recently held races at new venues (e.g., Los Angeles Memorial Coliseum, Chicago Street Race, Mexico City, etc.) that lost significant money but exposed more fans to the sport and helped secure valuable broadcast deals.
• NASCAR makes significant investments to enhance and improve the safety of its tracks, along with investing in new events to ensure the best possible racing and safety for drivers and fans.
• In questioning about available superspeedways, O’Donnell noted that “[NASCAR] built those racetracks,” as well as investing around $1 billion into NASCAR facilities over the last 30 years.
• In testimony around competing series, O’Donnell shared that SRX was a series that competed for fans, sponsors and media partners but, critically, not teams. Charter holders participating in SRX undermined NASCAR’s confidence that the teams were “all-in” since NASCAR thought they should be given what teams, tracks and NASCAR agreed to create through the Charter system (that these Plaintiffs claim is anticompetitive). “

The NASCAR trial continues on Friday, December 5.