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CHARLOTTE, NC (AP) – Justin Marks has tried three times to buy the NASCAR equivalent of a franchise license that guarantees a car a place in the race each week. It was outbid twice, he said, and a third deal fell apart.
Without this charter, Marks had almost no chance of putting his team on the right track in 2021. He ultimately had to hire one from another organization to become the second new NASCAR owner to announce a team last month.
As NASCAR plans to introduce the new “NextGen” car for cost reduction purposes in 2022, demand for charters has skyrocketed. At least three have been sold since August – each charter’s ownership records aren’t updated by NASCAR until the start of a new year – and the bidding process has been frantic.
“It was a lot harder for us than I thought it would be,” Marks said this week after announcing Trackhouse Racing. “There are a lot of charter buyers and unfortunately there aren’t a lot of charter buyers trying to build championship-caliber racing teams. “
The environment has changed dramatically in the three years since Furniture Row Racing folded its team and put its championship-winning charter up for sale. Barney Visser struggled to find even a single bidder and Spire Sports + Entertainment, the agency Visser was using to negotiate a sale, performed and bought it herself.
The charter system debuted in 2016 to create tangible value for team owners who in the previous independent contractor market had only inventory, equipment and maybe real estate to show off. for their participation in NASCAR. If they went bankrupt, there was little recourse to recover investments.
The 36 charters guarantee entry into each Cup race, and therefore part of the stock market. Charters can be sold on the open market and also rented to another team for a full season. The value of a charter is based on the performance of the car according to a formula in which the purse is divided so that a higher percentage is awarded to the best teams.
A charter buyer can guarantee that the purchase price will ultimately be recouped in the form of scholarship payments, which reduced the risk for Spire when he became the owner of the team. Two years after purchasing Visser’s stake in the sport, Spire Motorsports acquired two more charters.
Spire purchased its second charter from Leavine Family Racing in August and has since acquired a third for 2021, but its origin has not yet been disclosed.
It was this third charter that Marks was able to hire from Speyer to start his team next year.
Denny Hamlin also became the team owner and explored several charter opportunities before he and Michael Jordan bought Germain Racing last month. Hamlin, as Spire had done two years ago, studied the economics of the new car planned by NASCAR and determined that team ownership will be more affordable in 2022.
The NextGen car was supposed to debut next season, but has been delayed for a year by the pandemic.
“When the new car started to be announced and NASCAR really started to take initiatives to limit personnel, limit practice, things like that, it really helps the racing teams,” said Hamlin. “At the end of the day, it’s the teams that get a little more income and keeping a little more income is what makes (ownership) more attractive.”
NASCAR for two decades has been dominated by five organizations with aging owners and little interest from new entrants. Roger Penske is 83, Joe Gibbs is 79, Jack Roush is 78, Richard Childress is 75 and Rick Hendrick is 71.
Active drivers Kevin Harvick and Brad Keselowski both owned Truck Series teams which they eventually abandoned, leaving Kyle Busch’s truck team as the last to stand under the current financial model.
But the charter system for the Cup Series and NASCAR’s efforts to make races more profitable have successfully attracted young new entrants. Jeff Dickerson and TJ Puchyr, co-owners of Speyer, are in their forties; the former Marks driver is 39 and Hamlin, still competing, will be 40 next month.
All of them have bet the economic reset with the NextGen will make their investments whole.
Busch is not convinced and cannot understand why Hamlin and Marks would take ownership in 2021 before the new car.
“I’m not sure how the model can be maintained with the arrival of these new owners, especially the new ones arriving now for next year, knowing that they have to buy old unnecessary inventory and then scrapped it.” said Busch. “It makes absolutely no sense to me.”
Dickerson said Busch was right in his assessment, but it was an argument: the model is broken and that is why Spire was the only interested buyer when Furniture Row sold its charter in 2018. But the NextGen will be a kit car with specific parts from the distributors, reducing the labor required to get to the track.
“It’s no coincidence that we were the only ones standing on (Furniture Row) in 2018 and now with the car and the NextGen model that NASCAR is rolling out, there is a solid market for charter flights,” Dickerson said.
“There is significant interest from groups outside of sport trying to gain a foothold in NASCAR, and perhaps the best proof is that teams like ours, or Denny and MJ, or Trackhouse, are all ready to go. spend the sabbatical year investing in our programs, in equipment that will soon be somewhat obsolete, just to be ready for 2022. “