What’s Happening?

On Monday, Bubba Wallace’s spotter Freddie Kraft, who runs the Couch Racer account, reported that “At least two tier one teams” are looking to add charters for 2025. Charters are notoriously very expensive, but, how much money would a charter cost? Well, the question is more complicated than that.

• NASCAR implemented the charter system in 2016, and charter costs have skyrocketed since then. Charters guarantee race teams a certain amount of the prize pool and a starting spot in every race provided they attempt all the races.
• The value of a charter has skyrocketed in recent years. Buying one has become an unwritten requirement for a full-time team to be competitive.
• Fans love to speculate about the charter situation. These moves often precede major driver moves, and that leads to major speculation about charters.

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Who Is Trying to Buy?

Currently, there are 10 “Tier One” organizations in the NASCAR Cup Series. Of those “Tier One” organizations, 3 (Hendrick Motorsports, Joe Gibbs Racing, and Stewart-Haas Racing) are already at 4 cars, which is the maximum NASCAR allows.

This leaves Trackhouse Racing, Richard Childress Racing, 23XI Racing, Team Penske, Front Row Motorsports, Legacy Motor Club, and RFK Racing. Each of those teams has arguments to expand.

RCR and Trackhouse each have young prospects, and an extra Cup Series car allows for an easy way to slow those drivers into the Cup Series. 23XI Racing, Front Row Motorsports, Legacy Motor Club, and RFK Racing have begun experimenting with entering a third car into races, and that could prelude expansion. Team Penske seems the least likely out of this group to expand, as they have not entered an extra car into a race since 2021.

However, regardless of what any of these teams want to do, they have to pay up to get a charter. Charters are not cheap.

How Much Does It Cost?

When charters were originally implemented, they were pricey, but, still relatively affordable for most team owners to purchase. Dale Earnhardt Jr. talked on the Dale Jr. Download in February about how charters from the old BK Racing were being sold for $2 million back in 2016.

Fast-forward to 2023, and Live Fast Motorsports sells its charter to Spire Motorsports for a reported $40 million. That’s a 2000% increase over 7 years.

Charters have also become a must for any team to stay in the sport and try to race full-time. Look no further than the 2023 NASCAR Cup Series entry lists, which only saw “Open” entries in 13 of 36 races. Compare that to 2021, where there was at least one “Open” entry in all 36 races.

Charters are an unwritten requirement for Cup Series teams to simply survive, and pricing continues to be the same. Adam Stern of Sports Business Journal reported that the current asking price for a charter is still around $40 million, and that number is not going to go down because of what we just mentioned. However, raising the funds to buy a charter is only half the battle.

Problem 1: The Charter Negotiations

Charters are in a strange place. The current charter agreement between NASCAR and the race teams expires at the end of 2024, and NASCAR and the race teams continue to be at odds. For more information on it, read the article above.

It’s worth noting that virtually everyone in the industry who has commented on it has said that they expect the deal to ultimately get done. Still, with charters potentially going away at the end of the year in a disaster scenario, it’s tough to judge exactly what a charter is worth and if it’s a worthwhile investment.

Regardless, the expectation is that it will get done, so, this issue should resolve itself, keyword SHOULD. However, that’s not the only issue.

Problem 2: Who Is Selling?

If teams want a charter, someone has to be selling a charter, but, who is selling? Looking at non-tier one teams, it’s tough to find a suitable partner.

Kaulig Racing publically stated that they are not “Looking to sell” at the moment. Rick Ware Racing has invested in Justin Haley for the foreseeable future, and the team is showing significant improvement in 2024. Spire just bought a charter, so, selling one would be a strange move.

There are also two single-car teams. The Wood Brothers have been in the sport since the 1950s, so, it’s incredibly unlikely that they’d sell their lone charter. JTG-Daugherty Racing just won the Daytona 500 in 2023, and they have a solid sponsor relationship with Kroger.

There has been some speculation, particularly from Jordan Bianchi of The Athletic, that SHR is looking at leaving Ford. If that happens, and there are no other places for them to become a Tier One team, could SHR sell a charter or two?

There’s also the added wrinkle of a new manufacturer. Brakehard broke down in a recent video that if a new manufacturer joins NASCAR, that opens up 4 extra charters for Honda to use. More information on that can be found below.

Regardless, Honda is likely not entering the sport in 2025, so, that option doesn’t currently exist for these “Tier One” Teams. The only option is to buy from an existing team, and the current market it a tough one.

Charters are expensive, but, that’s only half the battle. Will these teams expand like they hope to?