After being asked countless times, it may finally be time for Dale Earnhardt Jr. and JR Motorsports to take the next step in its evolution: moving to the NASCAR Cup Series.
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Junior’s recent conversation on the Bussin’ With The Boys podcast certainly did hint towards the same, with the group throwing around numbers on what NASCAR charters used to be worth, what they’re worth today, and how valuable those charters will be in the next 10 years.
The NASCAR Hall of Famer and his sister, Kelley, have built JR Motorsports into one of the most successful teams in the Xfinity Series. But there’s more to just winning with the organization; it’s served as a training ground of sorts for dozens of individuals who’ve eventually moved up to the sport’s highest rank.
“We love being at that level where we graduate people up to the top series,” Earnhardt said. “Drivers come through our program, crew chiefs, mechanics, engineers, even people in our office: marketing, licensing.
“They all come and work at our business, get educated, get a great experience, and get a reputation, and then they get a call from a Cup team. It sucks to lose great people but it’s also like a big reward where we’re doing something right where people are wanting to hire our good people,” he added.
The Earnhardts initially planned to build out Dale Earnhardt Inc., the organization their late father founded. But after numerous run-ins with stepmother Teresa Earnhardt on the direction of the organization, brother and sister decided to go out and start their own team. That’s how JR Motorsports was born.
“We started this other team with one race car, three or four employees, very modest, and have grown it into a very successful deal,” Dale Jr. said.
But as successful as JRM has become, that lure to make the biggest jump of all to the Cup Series continues knocking at the door. And suffice to say that the Earnhardts are both weighing the risk vs. reward of when – or even if – they’ll make the move to NASCAR’s top series.
The biggest obstacle, though, is funding
“To race full-time in the Cup Series, you need a charter, which is basically a franchise,” Earnhardt said. “There are only three dozen of those. There are only so many charters, so to acquire one, you’ve got to buy one from somebody, and they’re selling for anywhere from $25 to $40 million.
“So you’ve got to buy the charter, and then you’ve got to buy the cars, they’re $350,000 apiece, and then you’ve got to have an engine program, you’ve got to upscale employees. To race full-time in the Cup Series, you might be able to do it on $20 million a year.
“So it’s $100 million to get started to buy a charter or two, and then have the funding to run at that level, you have to have a massive commitment from corporate America to fund the team annually and long-term. To go from where we are now in our business model is a massive jump, a huge commitment. It’s scary.”
While JRM isn’t for sale, the Junior and Kelley have been exploring taking on potential investors if the organization were to jump to Cup. But so far, no one has come around that has prompted them to invest in the privately held company.
“We had a conversation with one of the largest or most popular sports franchises in the country,” Earnhardt admitted. “So there’s interest out there. A team like mine or for a person like me to get in there, it’s going to have to be an investment firm or a current entity that’s owning sports teams.
“There are a lot of these groups that have started to invest in race teams. Certain race teams have taken on investors and sold equity in ownership in the program, so that’s kind of promising for someone like me. I know how to run a race team. Kelly and I know how to operate this thing and be successful, know how to do it, and not lose money.
“We have a lot of equity in our name and our reputation, so I feel we’re very appealing for anybody who is brand new to this, don’t know anything about racing, but know that owning a charter is going to be very valuable.”
In a sense, owning a prized charter is like hitting it big on the stock market.
“(Since their inception several years ago), charters have doubled in value annually,” Earnhardt said. “If you bought a charter six years ago, you might have spent $6 to $12 million, now they’re worth $30 to $40 million. I believe in 10 years, charters will sell for $80 to $100 million apiece. … It is not going to lose value.”
The biggest investment for Junior & his team is people
But for now, the real value for JRM is the capital it invests and grows in terms of the people who work for it. Throughout the Cup garage, it’s very clear to see that the foundation of several careers began while working for JRM.
“That’s why I did this, so you’d get a chance, not that you were going to be a career Xfinity racer for me,” Earnhardt said. “If it works out, hopefully, most of our drivers are only there for a year or two and then move on to the Cup level and race on Sunday.”
In a sense, working for JRM, be it on a team in the organization or in the administration, is like going through a finishing school. Employees learn, and then they graduate.
“I can look at the Cup field on Sunday, and there’s at least a third of the field that raced for me on Saturday at some point in their career, mechanics, crew chiefs, tons of people who’ve come through our race team to get to that level,” Junior said. “I’m proud of that.”
