New NASCAR licensing agency emerging (cont'd)

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. Talks began on Sept. 24 at NASCAR's offices in Charlotte and have continued with multiple meetings each month. All of the top teams have been represented, while Paul Brooks, NASCAR senior vice president, has mediated the negotiations.

The trust will be run by a board of industry licensing executives, although it has not been determined how many will serve or how long the terms will be. The board will consist mostly of team executives, although officials from NASCAR also could be considered.

Never before have NASCAR's teams and the sanctioning body combined their rights into one entity, making the formation of a NASCAR Properties a first for the sport.

"It's long overdue," said Joe Mattes, the vice president of marketing and licensing at Dale Earnhardt Jr.'s JR Motorsports. "Teams realize that we can't continue on as independent contractors, at least in licensing. There has to be a set of standards that we all work by."

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 of dollars 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 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.

Two years ago, MA took in more than $200 million in annual revenue, but that number was cut in half in 2009 as the recession took a bite out of sales and business plummeted.

"Hopefully this licensing strategy works and this can become a testimonial for what can happen when teams pool their rights and work together," Mattes said. "Some teams are already doing that in other areas, like engines and other equipment, so at least conceptually it's a good thing."