The recent sale of BJ McLeod’s NASCAR Cup Series charter for $40 million to Spire Motorsports by Live Fast Motorsports has brought attention to the growing value of the charters. In just a few years, the value of charters has increased significantly, from being worth only a few million dollars to now being worth tens of millions of dollars.
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Denny Hamlin, a NASCAR driver and Cup Series team owner, recently shared his opinion on this subject on his podcast show, Actions Detrimental. He stated that NASCAR should ensure that big teams receive a fair return on their investment when charters are resold and that it’s only fair that legacy owners like Rick Hendrick, Roger Penske, Joe Gibbs, and Richard Childress get their dues in this system.
Denny Hamlin explains how the charter system should do justice to the big teams
Talking about Spire Motorsports purchasing a $40 million charter, Hamlin, who himself started his own race team not long ago, stated he now feels “much better” about his investment. He further added, “If it is true, right, if it is exactly what as advertised, with what we paid, if you combine what we paid for the two, just a few years ago. Then yeah, I like my investments. It’s turned out well so far.”
The JGR driver stated that although it has some value in terms of franchise worth, it is not profitable to sell. Additionally, it still costs a significant amount to compete, and, without sponsorship, teams will lose money every year. Therefore, the charter system does not guarantee success and profitability for teams.
He added, “Because, these owners like Rick Hendrick and Joe Gibbs, and Roger Penske, and Richard Childress that have been around for such a long time deserve getting paid for their commitment to this sport for decades and decades, right? They deserve for their franchise to be worth something, a big number, whatever that number…”
BJ McLeod’s charter sale raises questions about the value of other NASCAR charters
During a discussion on the profitability of the charter system, Hamlin’s co-host raised a question about the impact of the recent purchase of BJ McLeod’s charter for $40 million, which was ranked at the bottom. The co-host asked how this would affect the value of the charters of teams like the #11 and the #5 team.
Hamlin responded, “I think they’re when it comes to getting sold right… You got the group that purchased into Gibbs, Right? More than likely they purchased into the assets, the contracts, so they bought into not just the charters, more than likely they purchased into the whole franchise of Joe Gibbs Racing.”
“Now a lot of that includes, well, how much money worth of contracts do they have with sponsorship and manufacturers and things like that? So there’s a separate evaluation than just for the piece of paper saying you’re allowed to compete in this.”
Hamlin later expressed that it was difficult to determine the value of big teams in NASCAR due to their assets and contracts with sponsors. He noted that the more contracts a team had, the more revenue they typically generated, which increased the value of their franchise. However, negotiations with NASCAR regarding charter agreements are ongoing as the current agreement is set to expire in the next three months.
All in all, Denny Hamlin is of the opinion that the charter system has long-term value. But teams still need to ensure viability on a year-to-year basis.
