Rick Hendrick, Roger Penske, Richard Childress and Jack Roush met at a conference table in Roush’s personal hangar at the Concord, N.C., airport more than two years ago, identifying the stiffest economic headwinds facing their Sprint Cup organizations.
That was the genesis of the Race Team Alliance, an initially controversial consortium that brokered the landmark charter deal with NASCAR this season, recalibrating the team business model with more dependable and predictable revenue streams.
“It was fascinating,” Roush Fenway Racing president Steve Newmark, who attended the meeting, said in the latest NASCAR on NBC podcast. “As the owners were discussing the challenges they had on sponsorship and some things they saw coming down the pike, they all had similar views of what was going on. These were very successful businessmen both in racing and outside of it.”
In the podcast, Newmark details the behind-the-scenes machinations and negotiations that led to the formation of the RTA and team charters.
The meeting in Roush’s hangar was preceded by a February team owner meeting called by NASCAR at its headquarters in Daytona Beach, Fla., during Speedweeks 2014. Childress then lobbied his peers to gather independently.
“It evolved from there that the owners got together,” Newmark said. “We tried to figure out how to achieve some more synergies in the sport.
Part of the initial purpose was to talk about we’re all spending ridiculous amounts of money on hotels, rental cars. Is there a way we can leverage our purchasing power on some of these items to do a better job?
“That was one of the primary discussion topics. It wasn’t these meetings were intended to discuss ‘How can we overthrow NASCAR?’ That was some of the suspicions, and I understand that, but that wasn’t the origin or purpose.”
By June, the RTA (chaired by Rob Kauffman) was formed and announced on July 7, 2014, in the form of a news release.
Newmark said it was a much more complex process than it seemed.
“That was more work than anyone envisioned,” he said. “Even the simple act of selecting a name. I’ve still got an email with 50 names on it with everyone trying to create an acronym that made sense. Ultimately we settled on Race Team Alliance. We had to have attorneys guide us because we didn’t want to trip up on antitrust issues. We didn’t want to be anticompetitive, and there were lots of issues that we were told, ‘Hey, the teams together cannot talk about that.’ ”
Though the RTA had made NASCAR aware of its existence, it was met by a chilly reception from the sanctioning body, which initially indicated there would be no plans to recognize the group.
“We’d talked to NASCAR in advance, made sure they were aware, tried to alleviate concerns,” Newmark said. “But it was natural because it was such a sea change from how we operated in the past.
“I do think there was initial trepidation for certain folks in NASCAR. To be blunt, probably the concern was because you saw this whispered in the press. If I were in NASCAR, that would have been a legitimate concern. Is this what they are aiming to do? We had to have a learning process and build trust. There was a constant dialogue. After initial concern and pushback, it transformed very quickly.”
Within a year, the framework had been built for the charter system that would assign value to teams while allocating revenues through a new structure based partly on historical performance.
But while the numbers in the deal were worked out relatively easily, governance – or how much influence teams would have on the direction of NASCAR competition and rulemaking – was a sticking point that caused negotiations to last well into the offseason.
“One of the more contentious days, where I wondered if we’d be able to have a meeting of the minds, was Christmas Eve,” said Newmark, who was heavily involved with Kauffman in negotiations. “Rob and I, with some lawyers and some other team presidents, we were sending issues lists on Christmas (to NASCAR). We were able to bridge some of the gaps that came up then. That was a fairly constant process. It was fun doing it. It was grueling.”
Newmark recalled an all-night session at The Ballantyne Lodge in which talks with NASCAR went until 3 a.m. and resumed at 6 a.m. He took a nap at the hotel rather than make the 3-mile drive to his Charlotte home.
“Ask my kids, they’d get used to my phone lighting up with Rob Kauffman on it,” Newmark said. “It was very different than a lot of negotiations I was involved in with walkout moments. This had a more collaborative spirit. That doesn’t mean we didn’t have a difference of opinions, and we didn’t have some tough moments. But there really was an openness that I think was unprecedented in the sport.”
Other topics discussed by Newmark on the podcast:
–How the merger between Roush Racing and Fenway Sports Group transpired and how the entities still are working together;
–The evolution of team owner Jack Roush’s role from demanding leader to mentor;
–How NASCAR might be positioned to hook Millennials in the face of possibly declining car culture;
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