WILMETTE, Ill. — With the world still within the grasp of COVID-19, let’s examine the relationship between the sports leagues and their teams during the pandemic.
These unprecedented times created an operating environment never seen by the sports industry. The shutdown eliminated live sports for weeks and months during each sport’s respective season.
Each entity developed a playbook for its return. This involved working with each stakeholder, most importantly the government and public health officials. Months later, it is still a work in progress with changes being made as needed.
The largest professional sports leagues took their time to return. Being desperate and rushing back too soon would have had serious consequences. The stakes were high — risks associated with failure were not acceptable. And being patient paid dividends.
Financial resources matter. The ability to test, monitor and establish protocols was not cheap. Hosting events without fans meant lost revenue. Being able to weather the monetary carnage was not easy, but media contracts helped soften the blow.
Working with municipalities was both a necessity and a requirement. Authorities established strict guidelines and protocols that applied to everyone. Select local governments in the Southeast deemed motorsports an “essential business,” making it easier to have races in their home market areas. Still, working with government officials was the order of the day for sanctioning bodies and track operators.
There was a collective spirit on all levels. Everyone was impacted and in this together. They were eager to get back, willing to follow guidelines and rules, and treated following them as a source of pride. Bonding under the taglines #racingtogether and #togetherwin — motorsports led the way.
NASCAR was one of the first series to return to the track. Ten weeks after racing at Arizona’s Phoenix Raceway, the NASCAR Cup Series resumed competition at Darlington (S.C.) Raceway. NASCAR has raced consistently since then and plans to finish the season on time in early November.
NASCAR officials established a protocol that emphasized safety and efficiency. Essential personnel were limited and social distancing was not only recommended but enforced. Schedules were tightened to one-day shows with no practice or qualifying.
At-track temperature and symptom checks were required for entry into the garage areas.
However, NASCAR did not require COVID-19 testing, citing availability and accuracy. Personal responsibility was emphasized for monitoring each individual’s situation.
This was different than other professional sports leagues that administered tests daily with athletes contained in “bubble” environments.
The Race Team Alliance serves as a collective voice for teams in their discussions with NASCAR. This dialogue covers the competitive and commercial aspects of racing with the ultimate goal of the betterment of the sport for all.
The Charter System was established in 2016 for a term of five years with that agreement recently extended through 2024. There are 36 charters owned or leased by about 18 teams. Three teams (Hendrick Motorsports, Joe Gibbs Racing, Stewart-Haas Racing) have four each.
The charter owners collectively receive approximately $260 million annually through various prize winnings and purse programs. NASCAR’s annual media contract with FOX and NBC is worth an estimated $850 million.
Central to Formula One’s existence is the Concorde Agreement, which is a pact among the FIA, the Formula teams and the Formula One Group. It serves as the foundation for the competitive and commercial success of Formula One racing.
The terms specify how teams must compete in races and the manner in which broadcast revenues are distributed. Details are confidential but public stock filings by Liberty Media provide insight.
Ten Formula One teams have agreed to the terms of a new Concorde Agreement. This expires in 2025. The annual prize money pool is about $1 billion with Ferrari receiving the largest share. Teams have also agreed on a set of competitive regulations, which include setting a $145 million budget cap for teams.
The unprecedented economic challenges related to the pandemic have forced everyone to reassess their operations. Negotiations between the sanctioning bodies and teams may have dragged on but were put on the fast track.
Working together for the best interests of the sport will assure a more sustainable and competitive environment well into the future.
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