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February 4, 2014

Steve O'Donnell

Robin Pemberton

TRACEY JUDD:テつ Good morning, everybody.テつ Thanks for joining us this morning.テつ We've got Steve O'Donnell, NASCAR's Executive Vice President of Racing Operations, and Robin Pemberton, our Vice President of Competition Racing Development, here with us to talk about some changes to our penalty structure and our appeals process.
Steve, please go ahead.
STEVE O'DONNELL:テつ All right, thanks, Tracey.
Good morning, everyone, and thanks for taking the time to join us today.テつ When we met last summer you heard us talk about implementing some wide‑ranging initiatives that we've put a great deal of research into over the last year, really in order to transform our competition department.
Back in July we said that there were four pillars that made up the transformation:テつ Our officiating model, and you've seen us talk about that; the rules; our penalty and deterrent system, which Robin will talk about today; and governance, which really covers our appeals process.
After looking at these elements for quite some time, we're going to announce today some changes to our penalty structure, which will now be called our deterrent system, and to the appeals process, which has been part of our governance, and these will begin coming up for the 2014 season.
Our goal is to be more effective, fair and transparent in both areas, and we believe that the system is tailored to fit the needs of the sport, essentially building a firewall between the race teams, their sponsors, and the OEMs.テつ It's never our intent to penalize, but in order to keep the playing field fair for everyone, we recognize that strong rules need to be in place.
We certainly believe we've done a good job governing the sport in the past but always believe we can get better and benefit everyone involved, especially as we went out and talked to the industry.
The new deterrent system is going to provide a clear path for our competitors to fully understand the boundaries while shoring up some gray areas which may have been in existence, again, all in an effort to be as transparent as possible.
We've also moved to a more transparent appeals procedure with updated rules and hearings which we believe will benefit everyone involved. テつThe rule book will now clearly define the appeal procedure.テつ We believed that we've had one of the best processes in sports to settle disputes, but also wanted to modernize our procedures and continue to provide as much transparency, fairness and impartiality as possible.
In the past, as you all know, certain decisions may have put some panel members in tough situations, and we wanted to alleviate that conflict of interest and provide a clear path to better understanding the ever‑emerging science and technology arenas surrounding our sport today.
The modification to the panel will ease that burden and enhance the entire process which is in place, and again, provide a fair and impartial way to resolve disputes.テつ Changes to the appeal process include the introduction of a new final appeals officer, Bryan Moss, who's president emeritus at Gulfstream Aerospace.
I wanted to clearly state that Bryan's appointment is not a result of recent appeals outcomes or because of the changes to the Chase.テつ Like I mentioned earlier, revamping the governance model is something we've looked at now over the last 18 months, and we felt the timing was right to put these practices in place.
The appeals process will continue to provide two tears for resolving disputes:テつ The first level will be before a three‑member appeals panel that will now be called the National Motorsports Appeals Panel, and during that stage NASCAR will have the burden of showing that a penalty violation has occurred.テつ And on the second and final level, only a NASCAR member is allowed to appeal, and the burden will then shift to the team in showing the final appeals officer that the panel decision was incorrect.
The new system will also allow parties to submit summaries of issues in advance of the hearing.テつ We believe that will assist the appeals panelists in better understanding the matters before them prior to hearing, and other enhancements will include clearly identifying the procedural rights of the NASCAR members, will detail responsibilities of parties throughout the process, will allow NASCAR members named in the penalty to be present during the entire hearing, and the appeals administrator won't be allowed to be present during panel deliberations as in the past, again, creating a clear expedited appeals process when necessary, and this will all be outlined in the rule book.
With that I'm going to turn it over to Robin, who will give you some background on the new deterrent system.
ROBIN PEMBERTON:テつ Thank you, Steve.テつ As Steve mentioned, we've been looking to put together a more effective and efficient deterrent system that we believe will serve the competitors and their teams much better.テつ It should provide for a greater transparency and should enhance the process in which we inspect the vehicles and regulate the sport.
We believe the new system is easily understood and specifically lays out exactly what disciplinary action will be taken depending upon the type of technical infraction.テつ More importantly, we believe we have strengthened our system to ensure even more competitive racing.
Here's a top‑line overview of how the new deterrent system works:テつ The system starts with warnings for a very minor infraction, then are grouped into six levels ranging from a Penalty 1, which we call P1, the least significant, and Penalty 2 to a Penalty 6, P6, the most significant.テつ Lower penalty levels including penalty options that may result in fines or points, while higher penalty levels can include a number of actions such as points, fines and suspensions.
At the highest three levels of the system, if a rules infraction is discovered in post‑race inspection, one or more additional penalty elements are added on top of the standard prescribed penalty.テつ Repeat offenses by the same team are addressed as a recurrence multiplier.テつ For example, if a Penalty 4 is assessed and then a second Penalty 4 or higher occurs the same season, the subsequent penalty is increased by 50 percent above the normal standard.
The new deterrent system also includes a more detailed explanation of suspensions.テつ Behavioral infractions are still handled on a case‑by‑case basis and are not built into this particular system.
Tracey, I'll turn it over to you.
TRACEY JUDD:テつ Thanks, guys, appreciate that.テつ So what we'll do now is go to the media for questions.

Q.テつ Robin, can you sort of give us an example of what would classify say as a P4 or a P6 penalty?テつ What in your mind would those be?
ROBIN PEMBERTON:テつ Yeah, I sure can.テつ When we're looking at a P4 penalty, it would be something that could be unapproved weight location, some minor engine components, generally outside the engine that would not be correct.テつ You know, approved parts that are not installed properly, maybe spoiler angles that don't meet what we need to have.テつ That's somewhere in the P4 range.
When you look at a P6 range, and that being the highest level, those are the ones that will be more significant, and they are the engines, engine compression ratio, additives like nitrous oxide or things that are for performance, and that's the range of those two.
And when you get into the penalty part, you know, a P6, you could lose any of the benefits of winning a race or starting a race, and so if you win a race and you have a P6 penalty, we will not use that win for either seeding or to help you get further into the Chase at the end of the year.

Q.テつ Steve, can you talk about why Bryan Moss was chosen for the final appellate role, and from what you said earlier, the modifications of the panel, does that mean the panel will be shuffled in terms of who's on that, as well?
STEVE O'DONNELL:テつ Yeah, on the first question, Bryan Moss, really when we talked in the industry, his business credentials we believe are impeccable, strong background in engineering and research, and as you all know, the sport has gone more and more towards engineering.テつ He's the president emeritus of Gulfstream Aerospace and obviously of really high integrity, so we felt like he was the right choice for this position.
And then in terms of the panel, we have probably put some people in some tough spots in the past, particularly race promoters who may rely on a team owner for a promotion the next week that we probably hadn't thought all the way through.テつ So some of the changes, you won't see national series promoters as part of that panel and you'll see more industry experts participate in that role in the future.

Q.テつ Steve, both you and Mike Helton mentioned this past week on the media tour or made reference to the fact that this new system may help in regards to probably increased scrutiny you guys would have, being that wins are going to be so important now under the new Chase system.テつ I was just wondering how you thought that the simplified penalty structure and appeals process will help NASCAR in that regard.
STEVE O'DONNELL:テつ I think it goes back to just being more transparent.テつ Over the last 18 months going out and talking to the race teams about what we could do or what we could improve, I think one of those things was we sometimes put ourselves in tough spots with penalties not being listed in the rule book, and where did NASCAR come up with this particular penalty, and it's never our intent to have those "gotcha" moments.テつ We don't want to penalize anyone, but when we have to, we want to be as transparent as possible.
I think by listing it out in the rule book, talking about how we're going to get to where we are in the future through the rule book and teams are very clear on those understandings, we thought the timing is right to do that, not necessarily the launch of this with the Chase; this was going to be in place really for the last 12 months, but we think it's the right thing to do for the industry.

Q.テつ Could you give an example of what a warning may entail?
ROBIN PEMBERTON:テつ Yeah, warnings can come in a lot of forms, but it could be as much as in the garage area if you have a team that week in and week out is not in line for inspection at the time that we say they need to be, and to try to maintain law and order you may just put them on notice, and that would be a warning.テつ In the past we've done warnings but you never really kept track of them.テつ Now with the new inspection model in place and all the things that it takes, we have to be ready to qualify in a timely fashion, things like that.テつ So we're going to put more emphasis on the garage area to be more ready to do that.テつ So we may have to warn teams officially, and that's just a low level.
STEVE O'DONNELL:テつ It also allows us with a warning, as Robin said, you make it public and other teams can see that and know not to travel down a path where it ultimately becomes a penalty, which, again, isn't our intent.

Q.テつ Steve, you said that behavioral penalties will be more a case‑by‑case basis, but I was curious with the requirement that a driver must qualify for every race in order to be able to use a win to get in the Chase, would a behavioral suspension automatically disqualify them from getting into the Chase with a win, or would that be‑‑ would that issue be addressed at the time of the penalty?
STEVE O'DONNELL:テつ We can't really speculate on that.テつ Each of these is going to be case‑by‑case basis, and we'll make the ruling that we need to make at that point.

Q.テつ And then on the appeals procedure, one of the big criticisms, at least of what the first round was, is that the teams were not able to kind of question NASCAR or offer questions that then could be answered through the administrator or through the chief appellate officer, then asking what NASCAR's response is.テつ Is there going to become more give‑and‑take in that kind of first round of the appeals process?
STEVE O'DONNELL:テつ Yeah, great question.テつ They'll actually be there through the entire process.テつ It'll no longer be NASCAR comes in and the teams can't be present.テつ The team will be there through the entire appeal.テつ The appeals members will know ahead of time what each party wants to come in and discuss, and questions can be answered.
The one change on the back end of that, however, is our appeals officer, who will be George Silverman, would not be present for deliberations.テつ In the past they have been, so both parties will present their case, and when the appeals commission goes to deliberate, that'll just be the three appeals members.

Q.テつ This is for Steve.テつ Several years ago, Steve, you guys went to the plastic cards on pit road specifying what the penalties are for dropped lug nut or leaving the box, whatever.テつ Are you going to have these things in writing for these types of penalties, as well?
STEVE O'DONNELL:テつ Yeah, I'll throw that one to Robin.
ROBIN PEMBERTON:テつ Our penalties will be listed.テつ There will be some information going out to everybody, and you'll see what these are, P1 through P6.テつ There will be some examples that are listed, and those examples that we will include, they're not limited to these examples.テつ If you read something about a part or piece that may get you a P4 or 5, just because it's not listed doesn't mean if there's another part or a piece in there that won't get you the same penalty.テつ There will be some information that will be out there, and everyone will be able to see what these penalties are.
The three national series, the Sprint Cup Series, the Nationwide Series, and the Camping World Truck Series, the penalty system will work the same. テつThe only difference will be the points will be the same, and the difference is we will step the monetary values down to these penalties in accordance with the three different series, obviously the Sprint Cup being the most and then Nationwide and then the Truck Series.

Q.テつ And just a quick follow‑up, with the hiring of Bryan Moss, I take it then that John Middlebrook is completely gone?
STEVE O'DONNELL:テつ That's correct.テつ John did a great job for us, but Bryan will take over as the final appeals officer.

Q.テつ Steve, you mentioned earlier with the appeals process the track operator is going to be removed and you have an industry expert put on.テつ Can you define what an industry expert is, and I guess my question also would be you mentioned the potential conflict that a track operator could have.テつ What kind of concerns about a potential conflict an industry expert could have if they have ties or relationships with one group or several organizations and the potential serving on these panels?テつ Can you explain those, please?
STEVE O'DONNELL:テつ Sure.テつ I think, first of all, we'll look at what the appeal is, and there's a process in place to look at potential conflicts that could occur, and we will pull from the appeals panel members to avoid those.テつ And I think when you look at track operator is an example I would use, Brandon Igdalsky at Pocono, who comes in, does an appeal, and he sits on the Penske appeal and tells you the day before that, boy, you're putting me in a tough position, I've got an IndyCar race and I need Roger to do a promotion for me, why did you put me on this.テつ We hadn't thought through some of those things.
I think it'll certainly be very similar to substance abuse where you have the industry experts we'll pull from the right people, and we'll pull from folks as we stated earlier with that engineering and technical background as the sport becomes more and more innovative.

Q.テつ I know you guys had an appeals panel last May that one of the members was a former car owner who had last run in Sprint Cup more than 30 years ago.テつ When you redefine the appeals panel, is there a cutoff on your ties to the sport?テつ Is it going to be looking at people who have at least been involved within the last 10, 15 years, and is there a challenge in finding those technical people because more of these technical issues are coming up?
STEVE O'DONNELL:テつ Yeah, there won't be any time limit.テつ There may be people even from outside the sport in the future as we look at where the sport is going.テつ So we're not going to put a parameter around anyone.テつ We're going to look for the best and brightest.テつ We think we've got the fairest system in all of sports, and that's what the criteria will be for someone to sit on the National Motorsports Panel.

Q.テつ Robin, can you talk about the progress of this and tightening up the garage, how difficult it is to kind of keep ahead of it all, and how long this has been in the process of being put together, that you all have been looking at this gigantic picture, which of course the rule book is part of it?
ROBIN PEMBERTON:テつ Yeah, I think we've got the brightest and the smartest garage area we've ever had, and I think the penalty system being more transparent, when the competitors see what they're up against, and everything has been listed out there, and I believe that it'll be evident to them when they take their calculated risk where they're going to wind up.
I think it's been a lot of work by a lot of people here internally, and I think it's something that the garage area has asked for for quite some time, and we finally were able to get all of this stuff put together and release it this year.
I think it'll be well received once they see it laid out.テつ They'll understand where they're at and where they need to be as far as it relates in the garage area.

Q.テつ Robin, I know a lot of fans have been calling for rules to be on the internet and whatnot, but certainly as a sport, do you think part of this is that the fans should be able to more easily understand a very complicated rule system?
ROBIN PEMBERTON:テつ Yeah, I think it should be easier for them, and it's like anything; I don't understand all the rules of hockey even though I watch the game.テつ Everybody seeks a different level, and we've got avid fans that want to know every paragraph, every sentence, every comma and every period that they can, and then there's others that just want a high‑level look at things.
I think once they get to see this in print and the system out here and the penalties, they'll have a better understanding.
You know, this is the first year that we've done this, and I'm sure as we move forward in years to come, there will be some things that we add and delete off of this.

Q.テつ Robin, we kind of talked in the past about the length, duration of your deliberation, which is always lengthy.テつ Do changes like the penalties, qualifying, Chase, the fans, humans in general, kind of knee‑jerk over change, so do you kind of factor in that you're going to get a knee‑jerk reaction that's probably going to fade when you make some changes?
ROBIN PEMBERTON:テつ Yeah, I think that's just human nature.テつ I mean, when we decide to discuss things internally, a lot of times we have the same reaction until you sit down and you talk about it for any length of time and you get enough people around and hash things out.
When we release something, it's the fans' first opportunity to react to it, and it's not always favorable.テつ But over time it will be because when we release something, we have looked at it for not just months; some of these things have got years behind it of research and meetings and to discuss timing and everything else.
We're used to that, and we know what could become an up or down from the fans, but we believe when we react or when we do some of these things it's going to be the best for the sport, and fans generally come around once they understand it.

Q.テつ You talked about P6 penalties not counting towards the Chase, seeding or advancement.テつ Was there any consideration about taking the wins away completely, and if so why was it not implemented?
ROBIN PEMBERTON:テつ You know, that's always a topic of discussion, and at this point in time we always feel that when the fans leave the racetrack they know who won the race, and so right now we just will take away that opportunity for seeding or advancement based on wins if somebody violates the rules.テつ And this part of it isn't new.テつ We have leveled a penalty against a team a few years ago, I think it was at Las Vegas for some issue, and they weren't allowed to carry those points over for seeding into the Chase.
So it's not new.テつ It's in print now.テつ People can see it.テつ And they'll understand that part of it.
You know, it's always an age‑old question why you don't take away the win, and the timing right now is we're going to move forward like we have over the 65 years, and we will address things on a year‑to‑year basis and see where it takes us.
TRACEY JUDD:テつ Steve and Robin, thanks to you both for taking the time today to explain this new process to everybody.テつ We'd like to thank all of our media for joining us, as well.テつ As Robin said, a reminder that the press release for the new process and the infographics that are pertaining to both deterrents and appeals have been distributed and they can be accessed at both NASCARmedia.com and NASCAR.com.

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