NASCAR Cup Series

The NASCAR silly season will depend on which teams land valuable charters

Updated Jun. 3, 2021 2:26 p.m. ET

By Bob Pockrass
FOX Sports NASCAR Writer

With one past Cup champion off the board when it comes to silly season, another one has a decision to make.

That decision, like many in this silly season, could come down to who has a charter and who doesn’t.

23XI Racing wants to expand to two cars and would prefer to have a charter, NASCAR’s version of a franchise that guarantees a spot in every race as well as a base amount of income (for participating in each race) and another amount based on the previous three years performance.

If 23XI Racing expands, it could be the landing place for Kurt Busch, the 2004 Cup champion and a veteran who would complement the stable that has a young driver in Bubba Wallace.

Busch said last weekend that he hadn’t talked with 23XI Racing, and talks would start in earnest soon on whether he would remain at Chip Ganassi Racing.

Team co-owner Denny Hamlin, when asked about a driver, would only say he wants "a good one." He was more vocal on whether he needs a charter, as he has concerns that the charter agreement between the NASCAR and team owners only currently runs through 2024.

"I don’t know how much I want to invest in a charter right now," Hamlin said. "It would take me years to get that money back. And once I maybe get it back, the whole agreement could be different. I’m OK being patient."

Who is selling charters?

Well, it could be argued that any charter would be for sale at a certain price. Rick Ware Racing owns three charters and has a partnership with Richard Petty Motorsports for the fourth one it currently uses. Live Fast Racing has its charter through a partnership with Joe Falk, who has a history of making partnerships with his charter that avoids the issue of the charter only allowed to be leased for one year over a certain period (the current period is 2021-2024).

JTG Daugherty Racing is running with one charter and fielding another car as a non-chartered team, and certainly has had calls about whether it would sell its only charter.

Spire Motorsports owns three charters, and owner Jeff Dickerson said he has been talking to people both interested in buying charters and selling charters.

23XI Racing and Spire aren’t the only ones looking to buy.

Kaulig Racing plans to go Cup next year and seeks a charter. Trackhouse Racing is leasing a charter this year from Spire and is looking for one. If JR Motorsports goes Cup racing, it would want a charter, too. Roush Fenway Racing would also want a charter if it expands to three cars – if it wants to keep Ryan Newman, it would need three as current Penske driver Brad Keselowski, the 2012 Cup champion, is headed there as part of a deal, according to sources, that will include him acquiring some team ownership.

In a simple supply-vs-demand scenario, those who want them and those who might sell are at a current negotiating standstill. NASCAR doesn’t release winnings, but with some public documents and information from those with knowledge of the financials, a Cup team likely can guarantee, thanks to the charter and minimal performance, at least $4-5 million regardless of performance over the last three years, and the best teams can count on at least another $1-3 million depending on performance during the season.

The open teams that run near the back every week might not earn $1 million over the course of the season, while those that do run well potentially could be in the mid-six-figures.

"There is a narrative being pushed by some of these guys that own charters that run in the back that these values are getting up in the eight-figure range," said Trackhouse Racing owner Justin Marks. "I’m not going to spend that money. There’s diminishing returns.

"Besides a guaranteed Daytona 500 – to spend that kind of money and to only unlock fixed television and really low value historically is not worth the money. If these guys can find someone to pay them that kind of money, then good for them. ... I’ll race open if I have to."

Marks and Hamlin indicated that the costs of the Next Gen car would be too much for some current charter owners to handle, as it will take several million dollars to just have a handful of cars to get through the season. The costs are unpredictable because no one knows how many parts and pieces teams will need to replace during the season – and whether any parts or pieces, if they don’t perform as expected, would need to be overhauled by the vendors and then purchased new again by the teams.

Even Joe Gibbs Racing President Dave Alpern said last week that it is too early to know the budgets.

"We’re trying to figure out where that number is going to land for next year," said Dickerson, whose Spire Motorsports is in its third season. "We’ve done a lot of financial modeling to figure that out but you’re not going to know until you know. ... You’re going to realize the savings more in Year 2 or 3 than you are next year."

Dickerson said established teams are probably more comfortable than his team and several of the new owners in the sport.

"Perhaps our butts are puckering a little bit more because ... it is new to us where it might not be new to Chip Ganassi or Rick Hendrick because they have been building cars and buying cars and re-capitalizing their fleet every year," Dickerson said.

Dickerson noted that established owners have spent hundreds of millions dollars investing in the sport and will never get it back no matter the worth of the charter. Dickerson indicated the charter market is robust and there are people that are not in the Cup garage that are trying to get into the Cup garage.

"People have charters that can’t even afford to race the charters they have," Hamlin said. "They require a safety net from people leasing them and things like that.

"Charters can be held hostage if they wanted to and people trying to drive the prices up and whatnot. My philosophy is, ‘OK, go field the car and have fun.'"

Front Row Motorsports bought a BK Racing charter out of bankruptcy at $2.08 million in 2018, so that $10 million (or more) potential price tag has Hamlin and Marks trying to push the price back down. Their frustration has to be taken in that context as it seems negotiating has begun in earnest.

"The price is not because of the guaranteed money. The price is because the amount of people trying to buy a scarce asset – there are only 36 of these things," Dickerson said. "There is more people trying to get in. It’s just supply vs. demand. The demand right now is very high and the supply is very low.

"That’s why the prices are exorbitant. If Denny wants to expand, he has to buy a charter ... or go at it as an open."

So why not finance it and know you can eventually sell it? Marks said that if a team wants to be competitive, it is difficult.

"To get a loan to buy a charter for $10 million bucks when you’re showing the bank your books and you’re not really turning a profit, that’s a lot harder to get than coming out here and spending the bare minimum of money," Marks said.

Drivers and sponsors prefer to compete for teams with the charters because they know there is no chance of missing a race. Busch and Newman are the two veterans without signed deals for next season. They both seem intent on remaining in the sport. In response to a parody account that tweeted he was returning, Busch tweeted a video of his face on Leonardo DiCaprio’s, "I’m not leaving" line from The Wolf of Wall Street.

Busch: "That was meant for the tweet. We’ll get to next year when we have the chance to get to next year."

Newman: "I want to continue racing. I love what I do. ... It has been [great] but the reality is I still haven’t accomplished what I want to accomplish. I don’t know that I ever will. I could have Mark Martin syndrome [of never winning a title]."

Other drivers who it hasn’t been announced that they are signed for next season include Alex Bowman, Matt DiBenedetto, Austin Dillon, Aric Almirola, Daniel Suarez, Corey LaJoie, Michael McDowell, Ryan Preece and Anthony Alfredo. Bowman should remain at Hendrick, Dillon should remain at his grandfather’s team at Richard Childress Racing and McDowell at Front Row Motorsports.

There certainly could be more drivers in the silly season mix, depending on contract options, sponsorship and, as mentioned earlier, charter sales.

Newman and DiBenedetto are the two drivers in the top-20 who appear a little bit vulnerable to be without a ride if they can’t stay at their current organizations. DiBenedetto, a Penske driver who competes for Penske affiliate Wood Brothers Racing, knows that the organization has an open spot with Keselowski’s departure but doesn’t know if he will fill that slot.

"Lots of rumors flying around – I don’t know anything more than any of you guys or anyone on social media," DiBenedetto said. "I’m pretty much speculating like everybody else and taking my best guess at it."

Thinking Out Loud

NASCAR announced this week that the 2022 championship race will be at Phoenix.

This was a topic of the newsletter in March and with this year being the first with full capacity, it is understandable that NASCAR wanted to give Phoenix the championship for the third consecutive season.

The championship needs to move around among Phoenix, Las Vegas, Auto Club, Homestead and Atlanta – the five tracks that aren’t superspeedways (Daytona and Talladega would not be great championship race tracks considering the style of racing there) where NASCAR could race in late October or early November and know the temperatures will be decent.

Having the championship at the same track year after year can help certain drives and hurt others. Plus, it in some ways can become stale in the community. NASCAR has done great improvements to Phoenix when it comes to grandstand seating and an infield area for fans, but hopefully the incentive there was great events, championship or not.

Social Spotlight

Bob Pockrass has spent decades covering motorsports, including the past 30 Daytona 500s. He joined FOX Sports in 2019 following stints at ESPN, Sporting News, NASCAR Scene magazine and The (Daytona Beach) News-Journal. Follow him on Twitter and Instagram @bobpockrass.

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