Seven months of negotiations have put NASCAR and its top teams in position to create the first NASCAR Properties, a trust that will serve as a centralized licensing agency for the sport. The unnamed unit will operate as a one-stop shop for licensees, but a key difference from other previously established league-licensing divisions is that revenue will be distributed to the teams based on sales and not a revenue-share agreement. The licensing body is being called a trust because one body – NASCAR Properties – will hold the rights and grant licenses on behalf of the teams.
Participation by the teams will be voluntary, but the top teams such as JR Motorsports, Hendrick Motorsports, Joe Gibbs Racing and Roush Fenway Racing are in, as are several others that own valuable rights, like Dale Earnhardt Inc., which manages the late racing icon’s legacy business. The teams have agreed to include only certain categories so far, like apparel.
Team executives involved in the formation of the trust say it might take the rest of the spring to finalize the arrangement, but it’s been called “imminent” by multiple sources. The negotiations to unify the licensing rights were prompted by the financial troubles of Motorsports Authentics, the dominant licensee in the industry. MA, which has been on the verge of bankruptcy for the past year, owes millions to several teams. As part of the arrangement to create NASCAR Properties, teams will forgive MA for most of its debt. Industry insiders say that even the most ardent opponents of MA have come to grips with losing that revenue.
MA’s contracts with the top teams like Hendrick Motorsports and Roush Fenway Racing guaranteed as much as $3 million a year, but MA has been paying only a third to a half of the guarantee to the teams. MA’s die-cast car business will be spun off into a separate entity and will be managed by a third party, industry sources said. Revenue from the die-cast business will be shared among the teams as a way to satisfy part of MA’s debt. MA is expected to continue as a much leaner company that focuses strictly on trackside retail sales.