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The National Association for Stock Car Auto Racing (NASCAR) is halfway through the 2024 regular Cup Series season. One of the top motorsports racing series in America is a privately owned organization founded by Bill France Sr. in 1948.
The France family owns NASCAR and most of its racetrack. They collected the profits made by the series for most of its existence, until almost a decade ago when NASCAR executives and team owners rolled out an owner-charter agreement in 2016. Under the charter agreement, teams were guaranteed a spot in each NASCAR point-paying race and collected the prize money depending upon their performance each weekend. Stock car racing is an expensive affair, the reason sponsors cover all cars. Thus, this charter system provided an extra incentive for the owners and teams.
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With the introduction of the charter system in 2016, NASCAR aimed to reward teams who were consistent in their racing and performance, which led to the executives handing out 36 charters. Therefore, in a field of 40 cars, there are four spots for non-charter holders. Since then, the value of the charters increased 11-fold and has been on the upward graph. As per reports, Spire Motorsports purchased a charter from Live Fast Motorsports for $40 Million last year. This was about triple the price paid by Michael Jordan and Denny Hamlin-owned team, 23XI Racing in 2021.
However, according to Adam Stern (via Sports Business Journal), Front Row Motorsports bought a charter from Stewart-Haas Racing for a price ranging from $20 million to $25 million recently, allegedly a record drop from last year's charter value. With three more SHR charters on the market, 23XI Racing and Trackhouse Racing have been speculated to buy the charters to expand their two-car charter in the Cup Series.
It is believed that the significant drop in its value since last year is due to low demand. As per Sports Business Journal, almost six charters could be on the market this year, including four from SHR.
The current stalled charter agreement has also contributed to this price cut as NASCAR and its teams have failed to reach common ground regarding the new charter deal. The charter negotiation window expired earlier this year in January, and the current charter deal is set to expire by the end of the 2024 season.
Exploring NASCAR and Cup Series teams' disagreement
The new charter agreement for the following year has been stalled for several months. Seemingly, the 15 chartered teams are not on similar terms with NASCAR's structure.
According to Bob Pockrass, renowned Fox Sports journalist, NASCAR is planning to offer a seven-year guaranteed charter deal along with the possibility of extending it further.
"Cup teams got NASCAR’s latest charter agreement proposal yesterday. From what I can gather from variety of team principals, permanent charters were not part of the offer but the new charter agreement potentially could go beyond the current TV deal that ends in 2031," Bob Pockrass posted.
The seven-year deal is correlated to the new media rights agreement of $7.7 Billion that will start in 2025 and run till 2031. Reports from Sportico suggest that the Cup Series teams want the extra media revenue from the new media deal, as the current payout of the team is $8-9 Million annually.
