Money has been a crucial factor in the rise of NASCAR. Even if we keep the teams and authorities aside, media deals can be a simpler explanation. Remember the 2013 television rights package deal? A 10-year, $8.2 billion deal with NBC and FOX was believed to be the epitome of NASCAR’s success. That was the time when NASCAR races averaged 5 stars in ratings. With an average rating of 3 now, the new media rights deal with NBC, FOX, Amazon, and Warner Bros Discovery between 2025 and 2031 is the most lucrative deal by annual value in its history. The sum is a whopping $7.7 billion, but just for 7 years! But now, charter deals have hit a new high, and insiders exhibit mixed reactions.
Dale Earnhardt Jr., a man who’s worn both the helmet and the team owner’s hat, recently shared his thoughts on the charter landscape. Spoiler alert: He is a truly unbiased man. While he sees the upside, he also sees warning lights flashing on the dash. So what’s really going on under the hood of NASCAR’s charter boom?
NASCAR’s charter system has dark clouds and silver linings
On a recent episode of the Dale Jr. Download podcast, Dale Earnhardt Jr. talked about his mixed feelings about NASCAR’s charter system during a recent discussion with Jordan Bianchi. When informed about Rick Ware’s $45 million charter purchase, Earnhardt quipped, “And that’ll go up in a month.” This comment reflects the rapidly increasing value of charters, which have seen an 11-fold increase since their introduction in 2016.
If you remember, the charters were basically free when they were introduced in 2016. However, as time went on, the business behind the sport began to increase, and so did the charter prices. You might remember that at the end of 2021, 23XI Racing acquired its charter from Starcom Racing for just $13.5 million. Prices have shot up since. For instance, Front Row Motorsports acquired its charter from Stewart-Hass Racing for around $20-25 million last year. That $45 million deal Rick Ware Racing made? It’s now the benchmark.
This surge in value, while beneficial for existing teams, poses challenges for new entrants. Earnhardt Jr. noted, “You don’t even have a racecar yet. You spend 90 million dollars, 100 million dollars, and then you gotta build a race team.” Teams can spend anywhere close to the same amount spent on the charter (and even more) just to get competitive equipment, staff, and infrastructure in place. It’s no longer just about passion and talent, it’s about having massive financial backing from the start. Dale Jr. continued, “It has created a very, very challenging barrier of entry for anyone that’s not a billionaire.”
How high will these charters end up being valued? Only time will tell.
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Yet, Junior admits it’s not all bad. Charters give teams something NASCAR never truly offered before: equity. “A part of me is very happy,” he said. “You can start a business, and then you have some value to sell. Literally, in the Xfinity series today, if I wanted to sell this company, you’re selling it for pennies on the dollar. Now, teams have a charter that they can sell, and you got real value. That’s awesome. I love that,” he said, emphasizing the bigger opportunities ahead. But, will these values get lower with time?
Looking ahead, Earnhardt Jr. believes charter values could soar even higher. “I believe the value of the charters is well north of 150 million dollars. That ceiling, I don’t think anybody can predict,” he said. This, while being good news for existing team owners, paints a daunting picture for newcomers. The sport’s rising valuations are a testament to its commercial success, but at what cost to its competitive diversity?
When is Dale Earnhardt Jr. diving into the charter system?
Dale Earnhardt Jr. has openly expressed hesitation about purchasing a NASCAR Cup Series charter. “I’ve never made any money racing. I’ve never known a Cup team that made money,” he stated. Despite his passion for the sport, the financial risks and high entry costs have kept him cautious about expanding JR Motorsports full-time into the Cup Series.
One of the major concerns for Dale Jr. is his hesitancy to tie up significant capital in an asset that isn’t easily liquidated. “If I park that money in the charter, it’s not like a stock that I can turn around and sell,” he explained, emphasizing that ownership is a long-term commitment. Something he isn’t prepared for.
The NASCAR legend also expressed ethical concerns about potentially profiting from a charter purchase, given his family’s legacy in the sport. He feels it would be wrong to buy a charter only to sell it for profit a few years later. He stated, “We’ve always raced to win a race and compete, not thinking about it as a way to profit.”
Recent revelations about the financial struggles of top teams like Hendrick Motorsports have further dampened Earnhardt Jr.’s enthusiasm. Learning that even successful organizations aren’t turning a profit has made him pause and reconsider his plans. “RTA is basically telling me that this charter that I want to buy is a losing proposition or not a money maker. It’s broken,” he said.
Despite these concerns, Earnhardt Jr. and his sister, Kelly Earnhardt Miller, haven’t completely abandoned their dream of Cup Series ownership. They remain open to potential partnerships or investments but are waiting for an opportunity that benefits all parties involved. As Earnhardt Jr. put it, “We’re still at the table talking to different teams about maybe partnering or investing,” but so far, no perfect opportunity has presented itself
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