After almost 18 months and many late night meetings, NASCAR announced the hard points of the Sprint Cup teams charter system on Tuesday.
According to the sanctioning body, the philosophy behind the charter covers participation, governance and economics and inevitably will “promote a more predictable, sustainable and valuable team business model.”
And in essence, healthier teams in the field will equate to a stronger product on the track.
“Today represents a landmark change to the business model of team ownership in NASCAR,” 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 members.”
For at least the next nine years — which runs congruent with the NASCAR TV contract — 36 teams “in good standing” will be guaranteed starting positions in every event through the distribution of charters. There will be four open positions in each event for teams to qualify for 40-car field. However, as of now, qualifying procedures for the Daytona 500 have not been determined.
Team Owner Council
A Team Owner Council — representatives of the 19 organizations granted charters — will have “formal input into decisions” of the sanctioning body. Currently, Michael Waltrip Racing is listed among the “19” but Rob Kauffman, former owner of MWR acknowledged the charters from the Nos. 55 and 15 are likely to transfer to the No. 19 at Joe Gibbs Racing and the No. 41 at Stewart-Haas Racing. When Kauffman was asked what the market value of his two charters, he replied in the seven-figure range.
Meeting in the middle
Richard Petty, whose family has raced in NASCAR since 1949, called Tuesday’s announcement “the second most important thing that’s ever happened in NASCAR”.
“Now the drivers and the owners can really work across the aisle,” Petty said. “It’s sort of like democrats and republicans, they’ve been doing they’re thing, we’ve been doing our thing, meeting in the middle a little bit. We’re getting rid of that. We’re all going to be in the middle of the deal now.
“The owners, we don’t understand how NASCAR works, okay? They don’t understand how the race teams work. So now we’re going to be in the same room talking about the same problems and solving the problems together.”
Other benefits for the teams
As to the economics, the benefits are many. Initially, a team owner can assure a sponsor or potential investors that his car(s) is locked into the field. A team owner also has the opportunity to lease his current charter to an incoming owner or an existing owner looking to secure his or her status in a race. Long-term, a team owner who looking to cash out of the sport, will have the opportunity to do so for more than pennies on the dollar. And potential owners can enter the sport knowing there will be equity in their investment.
“Being able to market that we’re one of the 36 is huge,” says Tad Geschickter, team owner of JTG/Daugherty Racing. “I think when you look at nine years down the line how performance relates to revenue — which was never apparent before — is really key so you can plan as a business.
“Certainly, on the governance side, having an owner council where we’re talking about issues and costs and decisions — which were never there before — gives us more of an opportunity for me to control my own destiny.”
Distribution of points and funds
On Thursday, NASCAR is expected to offer a clearer picture on how limiting the field to 40 teams will affect the point standings. The sanctioning body is also expected to outline eligibility formats in case of inclement weather.
According to Brent Dewar, NASCAR Chief Operating Officer, the distribution of revenue to the teams will be based on four areas: race purse, historical performance, fixed purse performance, year end point fund.
One question that still need to be answered is what are the performance parameters a team must maintain to remain in “good standing”.