Gene Haas knows a little something about the cost of racing.
The budget of a NASCAR team is chicken feed compared to the coin — well, pounds and Euros — he’s dropped in establishing a Formula 1 operation.
Still, from Haas’ original foray into NASCAR as a single-car team in 2002 to winning the title Sprint Cup championship in 2011, he understands the investment it takes to rise to the top.
So you have to invest $20 million a year to run a race car team, so what does that charter pay back to you? All of those numbers are really unknown. That’s why they did this.
Gene Haas on the charter system
The addition of a third team in 2013 with Danica Patrick was a gamble. But when Stewart-Haas Racing expanded to a fourth team one year later to add Kurt Busch and replaced Ryan Newman with Kevin Harvick, Haas collected his second title in four years.
But his fourth team came with a price. And when NASCAR adopted the charter system this season, SHR was initially allocated three charters.
Buying a fourth charter
If Haas wanted to secure a charter for Busch and the No. 41 team, he’d have to buy one.
“Well, like everything else, everything that happens costs us money,” Haas said. “It’s like oh, man, we’ve been here for all these years and you have to spend money again. Spending the money wasn’t good but we got one and now we can move forward.
“I think the charter system is going to have value down the road, but it seems like every time we change something we have to spend money.”
Rob Kauffman, who held two charters despite the demise of his former company Michael Waltrip Racing, sold one to Stewart-Haas Racing for the No. 41 team and the Joe Gibbs Racing for the No. 19.
Kauffman would not reveal the price of his charters beyond offering a ballpark number in the seven-figure range. But Haas acknowledged it was not a flat fee.
“There are initial down payments, so there actually isn’t really a number. The deal we actually did is some average of what the value of the charter is going to be over the next three years — and that’s what we’re going to end up paying. So there really isn’t a specific number. It’s just a range and it’s going to be based upon what the value of the charter actually is.
“Rob Kauffman is a pretty smart guy. He really doesn’t leave much change on the table. So he’s going to make sure he gets his value, and that’s what we agreed to.”
Haas told Motorsport.com that Kauffman received an initial six-figure down payment with installments to be based on fair market value.
“We don’t exactly know what it’s going to be but it’s all in the contract, all agreed on,” Haas said. “Look, we didn’t want to pay too much because we don’t know what these things are worth. And he wanted to make sure that he didn’t get short-changed by selling too cheaply.
“But that’s what you have a contract for.”
Haas hopes the charter would pay for itself at some point. However, supply and demand will likely dictate what one of the 36 charters will be worth in the future.
“There’s a lot teams with charters out there that if someone walked up and offered them $5 million, I’d bet they’d sell it today,” Haas said. “So it’s kind of hard to say. It’s buy and sell. It’s what you think it’s worth and what you’re willing to pay and how much money can you make racing a NASCAR car.
“And if you don’t come to the races every year, then they’ll take your charter away from you. So you have to invest $20 million a year to run a race car team, so what does that charter pay back to you? All of those numbers are really unknown. That’s why they did this. The idea is to give value to the owners with the expectations that we can have something similar to say professional baseball, football where their equivalent to charters are worth hundreds of millions of dollars.
“But will NASCAR get to that point? I personally don’t see it that high, but you never know what the future might bring.”