Will the value of the Charters drop for a bit now? RCR, Wood Brothers are others have some decisions to make

Wall Street has hit Charlotte. NASCAR’s fast paced version of the stock market is ringing louder and louder. Adam Stern of the SBJ reported on Thursday morning that 23XI Racing purchased StarCom’s charter for $13.5-million. It was also found out that GMS owner Maury Gallagher paid $19.1-million for Richard Petty Motorsports’ two charters to take over the majority stake of that operation.

This all comes after this past summer’s shocking announcement that Trackhouse bought out Chip Ganassi Racing in order to obtain their two charters. The financial terms of this deal wasn’t disclosed but it was obviously way more money since it was a full buyout of everything.

23XI Racing only gets a charter from Starcom and a charter only, hence that being less.

Kaulig Racing also bought two charters from Spire which had a nice price tag to it too.

In saying all of this, the reported $10-million price tag per charter was likely true all along. That’s a big increase though from 2020 into 2021 when 23XI Racing bought one for around $4-million for their No. 23 Toyota that debuted this past season.

The thing now is, does the value rise, go down or stay the same of a charter moving forward? It has to do one of the three.  My sense though is, for the near future, they likely go down a bit.

See, NASCAR is in a fundamental shift and have seen a lot of new teams come to the premiere series over the past couple of seasons. That, plus most of the now existing teams that didn’t sell, well combine all of this and they’re not going anywhere for a long time.

Joe Gibbs Racing is set up for the future. So is Hendrick Motorsports, Stewart-Haas Racing and Team Penske. They all have people in place to carry on their respective legacies into the far distant future.

Now that Brad Keselowski has bought into Roush Fenway, this organization has a successor. Denny Hamlin and Michael Jordan are young enough to lead 23XI Racing for a long time. Same for Justin Marks and Pitbull over there at Trackhouse. Matt Kaulig and Chris Rice are young and have a lot of energy to propel Kaulig Racing for a while. GMS is new and in a same boat.

Which brings us back to the point of which direction does the market for a charter now go for the 2023 season and beyond.

There’s only 36 of these things to go around and one can make a case that most are set for the future now.

LONG POND, PENNSYLVANIA – JUNE 26: Bubba Wallace, driver of the #23 Root Insurance Toyota, and Matt DiBenedetto, driver of the #21 Motorcraft/Quick Lane Ford, race during the NASCAR Cup Series Pocono Organics CBD 325 at Pocono Raceway on June 26, 2021 in Long Pond, Pennsylvania. (Photo by Sean Gardner/23XI Racing/Getty Images)

The only question marks really are Rick Ware Racing, JTG Daugherty, Live Fast and Front Row Motorsports. How long do they stay around and can they make this work financially or do they sell down the line?

All four teams were brought up as potential sellers for 2022. The thing is, now that the new teams have already announced, are there any more out there eyeing to get in or are these teams part of the long term future of the sport too?

With a new car coming out, it made a lot of sense for these new teams to do so now. Does it help someone new to come in with these teams already having a full season or even more under their belts of this new car?

Plus, will the price tag be $10 million for them to come in?

The other aspect to this is, what does the Wood Brothers and Richard Childress Racing do? Is there anyone in place below the elder Wood’s and even Richard Childress to keep these storied teams going or do they get out while they can get a hefty payout while doing so.

See, the value of this charter system is for these owners to recoup some money on their ways out of the sport. Every other professional sporting league has ownership stakes and you can’t just start a team and show up and play an MLB, NFL, NBA or any other league’s games etc. You have to buy someone out.

Same here in NASCAR with the exception that it’s far cheaper to buy a NASCAR team than it is a stick-and-ball team.

So, while there’s value to be had, do the Wood Brothers and RCR sell while they can? Prior to the charter system, if they exited the sport, they had to sell of equipment on their own and hope to gain some money by that on their ways out. Now, someone would have to buy their charters which is worth far more in the process.

With all the more new teams that come in, there’s going to be a time to where the line at the door waiting to get into this sport is going to be short, if any at all.

36 is 36 and when most of the 36 don’t go anywhere, what incentive does a new team have to join with a charter when they literally can’t buy one. Plus, with that number being the number, the value of a charter drops if you add charters to accommodate those new teams wanting in. At this rate, you kind of have to keep the chartered number at 36.

With a four car max, JGR, HMS and SHR can’t expand. I don’t ever see Penske being a four car Cup team. They’re basically set. Does 23XI Racing, Trackhouse, RFK Racing, Kaulig or anyone else eye expansion down the road? Each are two car teams but can they sustain success and a three or even four car team? If they do, they would need a charter and that’s where the likes of RCR, Wood Brothers, JTG, RWR, Live Fast and Front Row come into play.

That’s why I don’t necessarily think charters now are going to cost over $10-million for 2023 to get in and it may drop over the years because there’s going to come a point where none are for sale and no right amount of money will be able to buy one out like Trackhouse or GMS did to Ganassi and Petty respectively.

So, while the going is still somewhat hot, what does RCR and the Wood Brothers do and what about the other smaller teams do moving forward?

The charter movement the last two years have shaped this sport for the future with it being as bright as ever. We’re rapidly approaching a time where the 36 charters are going to be held by their respective teams for a decade plus.

It’s buy or sell time now.

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