23XI Racing and Front Row Motorsports may be at risk of losing their charters due to their current stance against NASCAR’s charter agreement. These two teams have opted not to enter into the charter deal, citing concerns about the sport’s long-term sustainability and seeking more equitable terms. Notably, Michael Jordan and Denny Hamlin’s 23XI Racing team has been particularly vocal in advocating for fairer business practices within NASCAR.
Despite the tension, it appears that NASCAR has not yet yielded to these demands. Reports suggest that legal action might be on the horizon if the France family, which oversees NASCAR, decides to take control of the charters in question. However, Dale Earnhardt Jr. has downplayed such possibilities, instead predicting that this conflict could ultimately benefit the sport by creating more opportunities and fostering growth.
Dale Earnhardt Jr. Foresees Increasing Value of Charters
Dale Earnhardt Jr., a co-owner of JR Motorsports, has repeatedly expressed his interest in joining the Cup Series but has been deterred by the uncertainty surrounding charter values and their financial implications. Despite the ongoing dispute between NASCAR and 23XI Racing, Earnhardt believes that this friction might expedite the development of a more equitable financial model, potentially attracting additional investment to the sport in the future.
Recently, Michael Jordan sold his majority stake in the Charlotte Hornets for $3 billion, highlighting the lucrative potential of owning a major sports team. Although NASCAR currently lacks the same level of ownership perks, Earnhardt Jr. is optimistic that changes could enhance investment opportunities. On the Dale Jr. Download podcast, he noted, “23XI believes in the growth potential, but they need NASCAR to establish that value through a new agreement. That’s why they are pushing for this model—they believe it makes sense.”
The current value of a Cup Series charter is estimated between $20 to $25 million. However, Earnhardt Jr. speculates that, with the right changes, charter values could soar to $125 or $150 million within a few years. “It would not surprise me if charters reach that value soon. For team owners, that trajectory seems reasonable… NASCAR is unlikely to take away Michael Jordan’s charters; they will put in every effort to preserve them,” he added.
NASCAR’s Franchise Model Consideration
NASCAR has traditionally avoided adopting a franchise sports model. The existing charter system was designed to ensure that teams had guaranteed starting positions and fair splits of TV revenue. However, the current dispute might force NASCAR to reconsider this approach to address the ongoing challenges.
The debate surrounding the charter deal has been prominent in recent discussions. Denny Hamlin, co-owner of 23XI Racing, expressed his frustration by stating, “The teams are the ones who spend the money. The sponsors are the ones who purchase suites and activate their presence in the midways. Yet, it feels like we are undervalued,” as he shared on Actions Detrimental.
Hamlin argues that given their significant investment in the sport, teams deserve a fair economic solution from NASCAR. The sport has witnessed numerous teams go out of business over the past decade, including notable names like Chip Ganassi Racing, Furniture Row Motorsports, Phoenix Racing, and Michael Waltrip Racing. Furthermore, Stewart Haas Racing, another major team, is also on the brink of departure.
Given these circumstances, the concerns of team owners extend beyond merely securing a larger share of revenue. The possibility of 23XI Racing losing their charters for not agreeing to the charter deal seems unlikely at this stage. Nevertheless, there are still four months remaining for both parties to negotiate and resolve the issue.
“Dale Jr. Reveals Michael Jordan’s $125+ Million NASCAR Dream That Is Causing Issues with the New NASCAR Charter Deal”
