Changes coming via charter system
Cup field to go from 43 to 40
NASCAR announced significant changes Tuesday in its business model designed to improve financial stability by establishing a “charter system” for teams.
The nine-year deal will grant NASCAR Cup Series charters to 36 teams and cut Sprint Cup fields from 43 to 40 cars as well as establishing a Team Owner Council that will have a voice in industry decisions.
“Today represents a landmark change to the business model of team ownership in NASCAR,” CEO and chairman Brian France said. “The charter agreements provide nine years of stability for NASCAR and the teams to focus on growth initiatives together with our track partners, auto manufacturers, drivers and sponsors. The charters also are transferable, which will aid in the development of long-term enterprise value for charter mem-
bers.”
The owner of each charter — think of it as a franchise — will now have a guaranteed entry into the field of NASCAR Cup Series points races. The field will be reduced from 43 to 40 cars, with the final four spots to be determined weekly by so-called “open” team owners.
The field reduction isn’t going to impact the competitive balance. Many cars that qualified at the back of the pack have historically been field-fillers that rarely completed a race.
Teams that fielded cars regularly since 2013 have been granted charters. Under the new system, Hendrick Motorsports has the most (four charters) while other teams, including Stewart-Haas Racing, will have three. SHR does not have a charter for the No. 41 car (Kurt Busch) because he came on board after 2013. Joe Gibbs Racing is in the same situation (three charters, four cars) with Carl Edwards and the No. 19 team. Owners can keep charters or sell them to the highest bidder.
The new system is intended to give teams more value to potential investors and buyers while allowing teams to count on more predictable revenue. The industry will remain sponsorship-driven — with about three-fourths of a team’s revenues coming from sponsorship money.
There are only two charters on the open market now, both belonging to Michael Waltrip Racing, which folded after last season. MWR owner Rob Kauffman will be able to set an initial standard for the market value of those franchises based on the sales price.
The two most likely buyers for those spots would be Stewart-Haas Racing and Joe Gibbs Racing because of their investments in non-chartered rides.
“The new charter program strengthens each of our businesses individually and the team model as a whole, which is good for NASCAR, our fans, drivers, sponsors and the thousands of people who we employ,” said Kauffman, now a partner in Chip Ganassi Racing. “This will give us more stability and predictability, and it will allow us to take a more progressive, long-term approach to issues.”