What does the Race Team Alliance really mean?

Roger Penske

By now, you probably have some familiarity with the recently-formed Race Teams Alliance.

Comprised of nine top NASCAR teams (Chip Ganassi Racing with Felix Sabates, Hendrick Motorsports, Joe Gibbs Racing, Michael Waltrip Racing, Richard Childress Racing, Richard Petty Motorsports, Roush Fenway Racing, Stewart-Haas Racing and Team Penske), RTA was formed to create a "collaboration" for the purposes of exploring "areas of common interest." While RTA currently consists of the teams mentioned above, the intent is to open membership to all NASCAR Sprint Cup teams. The organization has a clear governing structure and by-laws, and has appointed MWR co-owner Rob Kaufman as chairman.

In a release, technical issues and travel costs were cited as two examples in which greater efficiency and cost-saving could be explored collaboratively. Further, the organization was formed in part to provide a mechanism for better communication with the sanction; one voice, if you will.

On the surface, that's a more-than-adequate overview of what RTA is and what it intends to do. However, upon further analysis, the surprise announcement July 7th, and what it means for the future of not only NASCAR, but racing in general is much less clear. Yes, the establishment of RTA undoubtedly constitutes unchartered territory.

In this two-part series, AutoRacing1 will look at the factors that have brought about the formation of Race Teams Alliance, and what the ramifications could be for the sport going forward.

The theme of Part 1 will be to essentially break down where things stand now a few weeks after the announcement of RTA. Analyzing the manner in which NASCAR has traditionally operated, will be crucial to understanding the manner in which the sanction has responded. Understanding NASCAR's response will then reveal where things stand currently between the two organizations.

Part 2 will look at the unchartered territory NASCAR faces going forward with respect to RTA.

For now, allow us to begin by briefly look at some of the factors that have brought about RTA.

Why RTA

Because the organization has been somewhat coy on its intentions, it's hard to say for certain, what spurned the formation of RTA. Just know there are those who will tell you, such an organization was actually a long time coming.

Of course, NASCAR has undergone significant changes in the last two decades. After of explosive growth from the early late 1990s-mid 2000s meant huge sponsorship dollars flowing to the teams. As a result, the teams had greater resources than before to invest in their teams, which of course, they did in a competitive environment such as NASCAR.

However, we're living in a far different world than we were even a decade ago.

The economic downturn of the last 6-7 years has meant that those sponsor dollars are no longer flowing in to support team budgets that shifted dramatically during the boom years. For example, we've seen numerous top-level teams such as Jeff Gordon's be sponsored not my behemoth corporations but charitable causes such as the Drive to End Hunger.

Another thing to keep in mind, is team owners don't have much to fall back on if things go south with sponsors. One such example is Robert Yates Racing losing M & M's sponsorship to Joe Gibbs Racing after the 2007 season. The loss was crippling to the once-powerful RYR, which folded as a race team two years later.

A good comparison would be stick-and-ball sports. The New York Yankees are an incredibly valuable property with a rich history, established fan base, etc. The Yankees can endure a few mediocre seasons and remain valuable and beloved. Also, if the ownership of the Yankees lost interest in running the team, they could sell an extremely valuable property.

Racing teams have no such luxury. They are not franchises, nor part of a league. They are very susceptible to changes in the economic climate. As we saw with Panther Racing in IndyCar, the loss of a sponsor often means the shop doors get closed – for good. The only recourse a team has in such a scenario is auctioning off assets for pennies on the dollar.

Another factor is unlike other sports, race team owners have costs passed along to them often without any say in the decision. Yes, team owners don't have to spend millions of dollars investing in racing, but said investment provides no formal decision making power in NASCAR. Who foots the bill when NASCAR decides to implements new aero rules? Team owners. Who pays the travel costs if NASCAR schedules five races on the West Coast? The owners.

In short, team owners have a huge investment, with little protection, and nearly no say. Sure, in a prior era the money may have been flowing to their teams well enough that it didn't matter much, we're living in an economic climate far different from that of a mere decade ago. Organizing themselves into one cohesive unit, rather than continuing as multiple, fractured entities probably makes sense in addressing the challenges of a climate which is characterized by far more uncertainty than there was a decade ago.

OK, but doesn't NASCAR have a history of not looking favorably upon participants organizing into groups?

Oh, yeah! Let's take a little stroll back in time.

"There will be a race tomorrow"

Those were the words of one Bill France, Sr. one Saturday in 1969. Responding to reports of a likely drivers' boycott for the next day's race scheduled at Talladega Super Speedway, NASCAR's legendary founder and longtime leader was hearing none of the drivers' claims the track was unsafe.

After all, if drivers thought the track was unsafe, they were free to race at a speed they found safe. And to France the choice was simple.

"If you don't want to be in it, pack up and leave."

Some, like then-president of the Professional Drivers Association, did in fact, pack up and leave. Still, despite a patchwork of GT cars, some ‘Cup' cars, and more than a few no name drivers, the race went ahead; points were awarded, a purse was paid, and Richard Brickhouse won his first and only premier-division NASCAR race.

But the race weekend is remembered largely for France letting the world know NASCAR would not be coerced by organized groups, nor their threats or boycotts. The spectators had purchased tickets to watch a race, and by gone it a race was going to happen. And with the race taking place, notions of organized resistance within the NASCAR kingdom were forever dealt a crushing blow.

A benevolent (most of the time) dictatorship

If it wasn't clear who ruled the sandbox before Talladega 1969, it was very clear after. NASCAR was a dictatorship, usually a benevolent one, but a dictatorship nonetheless. The sanction made the rules, participants obliged.

Of course, this style of rule stands in great contrast to the fractious, divided world of American Open Wheel Racing, long characterized by feeble leadership. Further, NASCAR's success compared to AOWR's beleaguered state is often cited as a validation that the NASCAR method is the preferred one.

Yes, for better or worse NASCAR makes the rules. There are committees, driver unions, or team alliances. Sure, NASCAR will hear an individual's grievance behind closed doors. But when it comes to groups, NASCAR, for better or worse takes orders from no one.

And for the most part, it's been for better

Despite very tangible, much discussed declines (crowds, TV numbers, sponsorship, etc.) in recent years, NASCAR remains a uniquely American success story of epic proportions. I've previously mentioned series will enter a ten-year $8-billion deal next year to showcase a uniquely American phenomenon: circle-track saloon racing.

My intention in using that phrase is not to mock in any way, rather to emphasize a larger point. See, whatever your opinion of NASCAR may be, the sport's popularity did not happen by accident. Rather, it has been brought about by decades of hard work, business savvy, and effective leadership, which has benefited numerous constituents.

There are many such examples, I can give but think about this.

Kenny Wallace, who recorded exactly 0 wins in 344 NASCAR Sprint Cup Series starts, published and successfully sold his auto-biography. Yes, NASCAR's promotional might and business savvy has helped elevate people of rather ordinary accomplishment such as Wallace attain extraordinary wealth. Stories like that of Wallace are unimaginable without NASCAR's leadership.

Which brings us to one, Brian France.

NASCAR chairman Brian France can be called many things. But don't call him anything but correct, when he notes that NASCAR's history is an inarguable testament to the sanction's methods of running the sport. Further, this track record has been established absent any assistance from interest groups such as RTA. Which is exactly why France's message to RTA was…

"Talk to our lawyers"

NASCAR's chairman has indicated he will continue speaking with team owners, as he, his father Bill France, Jr., and his previously mentioned grandfather, Bill, Sr., always have: one-on-one.

Just as his grandfather was having none of the PDA boycott at Talladega, Brian France is having none of the RTA. Any correspondence between the RTA and sanction must go through NASCAR attorneys.

Yes, let the record show NASCAR has officially stated the sanction has no intention of recognizing RTA. And in interpreting France's statements, the only scenario, in which that will change will be if the sanction is given legal reason to do so.

In short, France has reminded the world who runs the sandbox: NASCAR.

Fair enough. But if you take the RTA at their word and all they want to do is save a few dollars on hotels, insurance and parts. Is BZF backing himself into a corner with such a hard-line approach?

Possibly. But I understand his reasons.

One, France doesn't want to recognize one group, which would set a precedent to encourage more such groups to form. If the owners align, then the drivers might align, crewmen might align, etc.

Now, with the RTA specifically, Kaufman has noted that a lot of what they seek to accomplish will likely be mundane, behind-the-scenes type stuff. In other words, the reason for aligning is simply to simplify things, create a more efficient mechanism for discussion.

While that may be so, any acknowledgement of the group by NASCAR legitimizes it as a valid entity. Just as one head of state might refuse a meeting with another, France does not want to validate the group in any way. Rather, France is trying to portray the notion of…

Business as usual

This exact phrase has been used a few times since RTA was announced Monday July 7th. But it also can be seen in NASCAR's actions.

For example, NASCAR immediately released a statement saying they were aware of the organization but did not want to comment until they knew more specifics. After acknowledging the existence of the group, the statement read NASCAR's mission, as it has always been…" (emphasis mine).

In short, it's business as usual.

That tone was reinforced the weekend after RTA was announced when NASCAR chairman France did not address the issue during the race weekend in New Hampshire. Rather, President Mike Helton, long known for his ability to diffuse situations addressed the matter in front of NASCAR's on-site hauler. Note the less-formal setting in front of the hauler as opposed to the media center. The hauler gives off the appearance that Helton happened to stop and talk to reporters, rather than that of an official NASCAR-scheduled presser in say, the media center.

Again, we're business as usual.

Last week, France upped the ante on SiriusXM Radio noting "That would probably be the worst thing we could ever do – to listen to one voice, even if it were a consensus voice," in speaking of the RTA.

Again, take note of the informal setting – the radio. France simply addressed the issue as it came up, yet did not schedule a specific time to elaborate. And why would he need to, when it's business as usual?

So, we seem to be at a standstill?

Yes.

RTA was formed in part to communicate with one voice to the sanctioning body. However, the sanctioning body refuses to recognize that voice. So, as things stand now, the next interaction between the two organizations will occur via legal representation of the respective entities.

So, where is this headed?

Great question.

The team owners in RTA aren't saying much, leaving the talking to Kaufman. But no one for a second thinks that such a lineup of industry powerhouses would get together to save a few coins on hotels and parts. The general thinking is there are grander plans in the offing.

Where exactly this is headed will be the focus of Part 2. Also, in Part 2 we will briefly talk about previous showdowns between fractious entities in motorsports, specifically the divisive episodes that have plagued American Open Wheel Racing. While we will see that RTA-NASCAR likely has little in common with the AOWR schisms, the reference will help shine light on the current situation.

As for now, you have a general working knowledge of how NASCAR has traditionally operated. Further, you can see how the very existence of RTA is potentially counter to that, and have some knowledge of what brought RTA to life.

But what all this means, going forward, is a lot more complicated. Nonetheless, AutoRacing1 will tackle the subject in Part 2.

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