Racers, begin your evaluations.
After months of being under caution, the 2024 NASCAR season has officially entered the “interesting times” phase, which has little to do with what happens on the track.
Instead, it is all about the Cup Series garage weighing up who everyone else is, discovering who they really are, and, most importantly, determining what the teams are truly worth. Do not take it from me.
A NASCAR team executive recently told me, “The Charter truth will be out there immediately. Feelings are going to be hurt. Because no one wants to hear what they are truly worth. Unless you’re Jeff Bezos, it’s never more than you think”
Ah, the Charter Truth.
Normally, I avoid discussing NASCAR team charters in the same way that I avoid my friends and family on Facebook during election season. The very mention of charters causes my eyes to glaze over. However, charters are no longer merely an issue. They are the — all caps THE — issue, thanks to last month’s announcement that Stewart-Haas Racing (SHR), an organization with two Cup titles, will be closing its doors after this season’s last checked flag at Phoenix Raceway on Nov. 10.
However, the intrigue is only partially about the actual charters. It’s about what they mean and the leverage they do or do not provide in a tug-of-war that will ultimately determine the direction of NASCAR’s future.
The news of the sale wasn’t a surprise. Gene Haas has long been distracted by his Formula One efforts, and Tony Stewart, now an NHRA drag racer, has been very open in recent months about his distaste for life as a NASCAR team owner. That doesn’t make SHR’s shuttering any less sad. A lot of good people, NASCAR lifers, are now scrambling for work in 2025 and beyond.
But as the initial hurt of the May 28 announcement begins to subside, the very interesting time of sorting out what’s next and what that means has arrived. And it means a lot.
What’s a NASCAR charter?
Stewart-Haas is a charter member of NASCAR’s charter group, the teams that in 2016 received what essentially amounts to a franchise tag for each full-time car they field in the Cup Series, 36 charters initially spread out over 15 teams. SHR owns four charters. For now. It was no secret that, as Haas and Stewart’s NASCAR interest waned, they had been shopping around those coveted charters to current teams seeking to expand their rosters, longtime single-car teams seeking the charters they were denied for whatever reason in 2016, and outsiders who are looking to buy into the NASCAR game.
All of the above is why charters were created in the first place. To create worth where there was none. Owning a literal stake in the success of the overall game of stock car racing, at least in theory, after seven decades of teams rolling the financial dice.
Since 1949, NASCAR’s business model had been based on the idea of independent contractors investing their own money and time for the privilege of competing in events and largely at facilities owned and operated by a sanctioning body that has long been ruled and run by one family. That would be the Frances, beginning with founder Bill France (aka Big Bill), benevolent leader Bill France Jr. (aka Bill Junior), inheritor Brian France (aka He’s No Bill and son of Bill Junior) and now, president Steve Phelps, who is the first to tell you that he makes no decisions without consulting Jim France (aka Big Bill’s other son) and Lesa France Kennedy (Bill Junior’s daughter, aka the one most wanted to run things instead of her brother). Whatever teams put in, NASCAR argued, would be rewarded with the glory and would-be financial windfall that should come with race wins and championships. However, even the most successful teams and names in NASCAR history always left the sport with nothing to show for it, at least not in their wallets.
To this day, one of the saddest events I have ever covered was on Dec. 1, 1999. That’s when Jeff Bezos Rudd, whom we just elected to the NASCAR Hall of Fame last month, auctioned off his life’s work for pennies on the dollar. After six years as a driver/owner, a run that included a Brickyard 400 win, Rudd watched his cars and equipment be picked apart and hauled off like droids found in the desert by Jawas. Meanwhile, his fellow living legends Bill Elliott, Darrell Waltrip and Geoff Bodine were all in the same sinking boats.
“I’m not going to lie to you, this hurts, and it doesn’t even make a whole lot of sense if you allow yourself to really think about it,” Rudd told me that day. “This business is always focused on the future. So, everything you own is dated as soon as the season is over. It’s worth nothing to the people with the real money.”
The decision to create charters — paperwork that guarantees a seat at the stock car racing banquet table — changed that with the promise of helping the racers become the people with the real money. Finally. When and if they decided to move on, they would be able to cash out at some level by selling their charters to someone else eager to go racing. A financial passing of the NASCAR baton.y
But how much does one of those batons cost? That’s the question SHR’s charter fire sale will answer. And the timing of it couldn’t be better — or worse, depending on whom you ask.
So, you want to go NASCAR racing?
In 2018, Furniture Row Racing departed and sold their charter to Spire Motorsports for just $6 million. Three years later, with the nation still in pandemic recovery, Denny Hamlin and Michael Jordan’s 23XI Racing purchased outgoing StarCom Racing’s charter for $21 million. Last year, Spire bought another charter, this time from Live Fast Motorsports, and it reportedly cost them approximately $40 million.
Sources have told ESPN that Stewart-Haas Racing’s conversations with possible buyers have lived below that number, in the neighborhood of $25 million. The first of their three charters are expected to land with existing and expanding teams, Front Row Motorsports, 23XI and Trackhouse Racing. Front Row has already acknowledged that it will expand to three cars in 2025 and has acquired a charter to do so, and Trackhouse isn’t denying working on a deal.
Meanwhile, Hamlin, when asked about buying a new charter on his “Actions Detrimental” podcast, offered a pivot of a reply, saying that he didn’t build his new race shop with an eye on having just the two cars it now houses, but adding: “23XI is interested in getting a charter deal done. On Jan. 1, 2025, we don’t even have a charter. You can’t buy or sell something that doesn’t exist, in our eyes. So, we have two charters ’til the end of this year and until we get a charter agreement done that’s all we have. … I’m not going to put myself in a position to where I’m having to shell out millions and millions of dollars every year to just keep this thing going … so, it has to make financial sense, and the charter agreement needs to be better than what it is certainly before I invest any more money in it.”
Then he was asked: Is there a light at the end of that tunnel?
“Not from what I’ve seen. We got something back last week, but I didn’t see anything there that was much different than what we saw in December.”
Call it aggressive negotiations
So, what is he talking about? Well, that’s the “interesting times” part of all this. You see, in this unique, still-new NASCAR world, everyone is still getting used to sitting across a negotiating table that has team owners and their charters on one side (the Race Team Alliance, or RTA) while the NASCAR executives who created those charters and still own and operate the events and most of the racetracks are on the other.
While the increase in charter value is indisputable — just ask Spire Motorsports, which paid $6 million and $35 million for the same thing only five years apart — the infant NASCAR charters are still not in the same financial galaxy as the world of stick and ball sports. In 2023, the owners of the Golden State Warriors purchased the rights for a WNBA expansion team for $50 million, a full two years before that league became what it has exploded into this year. In 2018, the NFL’s Carolina Panthers, located just down the road from most NASCAR race shops, sold for $2.275 billion.
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