It was indeed a historic day for NASCAR on Tuesday, we know that because the press release starts with that line. Beyond being told, it was historic in NASCAR finally worked a franchising/Charter system with the teams that run in its series. In announcing it, I couldn’t help but think that it’s exactly like every major NASCAR decision that’s been made under Brian France; good idea with poor execution.
A major problem for middle to lower tiered teams was they could never really plan out beyond a year or two. All sponsorship agreements and driver signings were with the short term in mind, now with the agreement they will be in the Charter for nine years. On top of that, they will be guaranteed to make every race. This way teams can build for the future without worry about struggling to make each race.
For the teams in the Charter, they will also benefit from new revenue streams ranging from the guaranteed purse to new online ventures. Aligning the online experience for fans will aid teams in marketing strategies and allow them more time to come up with new ideas. This sort of tactic is seen in other sports such as the NFL and the NHL.
The added bonus was cutting the field down from 43 cars each week to 40. This was a long overdue move since there hasn’t been 43 competitive teams in a very long time.
While the announcement was made today, like most, there’s still some details that have yet to be released. Mainly in this case is how the Duels will be done for Daytona. The whole idea is for drivers to race their way in, well now there will be 36 guaranteed spots for Charter members, so what is the point of the race?
There is a performance based clause in the Charter, but it will be reviewed on a yearly basis. During the year NASCAR will nag a team into performing better. The tough part is to police this and it is doubtful NASCAR would ever really strip a team’s Charter.
Outrage was seen on Twitter regarding Wood Brothers Racing, who did not get a Charter. They have not run full-time since 2008, thus ineligible to receive membership as they needed to run full-time since 2013. While other teams like Joe Gibbs Racing and Stewart-Haas Racing need an additional Charter, they will be buying theirs, leaving the Woods out. If one of the main points of the announcement wasn’t about the history of the sport, maybe there would be less anger since the Woods have been involved since the beginning of NASCAR.
Speaking of selling Charters, this is where it gets ugly. While Rob Kauffman was a great choice from a business perspective to head up the Charter creation, there was a giant conflict of interest. Not so much that Kaufman is a team owner, as it the point of this system to sync up NASCAR and owners better, but the idea he has two Charters to sell now.
Kaufman won’t get back what he put into Michael Waltrip Racing by selling his two Charters, but he will get something from them. Something he quoted to be in the range of 4-8 million dollars. The issue at hand is at first the Charters would command lower amounts, but pitting teams against each other has driven the price and with Daytona just this week, teams are panicking. Premium Motorsports was awarded one Charter, but will be leasing that out to HScott Motorsports for around $1.5 million this year. What’s to stop them from leasing it every year to the highest bidder?
Looking at the Wood Brothers team again, they have struggled to get the funds to run full-time. This year they will be, but are out of the Charter (as seen above). With NASCAR being lucky to draw more than 40 cars each week, qualifying won’t be an issue, losing out on prize money is the issue. Charter teams are guaranteed more money each week than non-Charter teams. Where’s the incentive for them to run the full-year then?