All you need to know about NASCAR’s ownership charter system

NASCAR's charter system was introduced in 2016 to allow guaranteed starting spots for teams. This essentially turned the system into a franchise-like model with huge resale valuations.

Although charters guarantee Cup Series entry for 36 teams, they also require teams to complete marketing activities. The initial charter agreement ran from 2016 to 2024, and the second one is in effect alongside the $7.7 billion media rights deal. The current deal will expire in 2031.

Charter value is based on performance, as payouts depend on a rolling two-year owner points average and overall championship finish. Another perk to owning charters is the growing demand due to their limited numbers. This allows failing teams to liquidate their assets into a profitable charter sale.

Notably, the costliest charter sale happened between a struggling team like Live Fast Motorsports and Spire Motorsports, where LFM pocketed a mammoth $40 million. Teams may also lease their charters once during a rights-agreement cycle, but they must return to the original owner by season’s end.

Non-chartered teams compete with the four available open entries, but the payouts are significantly less than a chartered entry.

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Denny Hamlin shares frustration with NASCAR's indifference to team owners

After a meeting with NASCAR president Steve Phelps and CEO Jim France, Denny Hamlin shed light on the sport's treatment of its team owners. He shared details from the meeting in an email, which revealed that France wanted teams to cut costs and rely on OEMs for financial backing.

"Jim doesn’t really value the current owners of our sport and what we bring. He believes that NASCAR itself is the show. He made a point to say that we have to continue to give OEMs tremendous value because they help support the teams. I honestly don’t think he understands that every teams OEM deal is different. I told him our 15M number is WITH OEM engine support," Hamlin wrote.

"In the end he just wants someone else to pay our bills, NOT NASCAR," he concluded.

The emails were uncovered as part of the discovery process for the ongoing antitrust lawsuit. Other findings have revealed the sanctioning body's critical view of rival series.

In a text exchange between NASCAR chiefs Steve Phelps and Steve O'Donnell, the two executives shared their disdain for Denny Hamlin competing in SRX series.

"This is NASCAR. Pure and simple. Enough. We need legal to take a shot at this," Steve O'Donnell wrote.

"These guys are just plain stupid," Steve Phelps replied, "Need to put a knife in this trash series."

These texts align with 23XI Racing's allegations over monopolistic practices by the governing body. If the same is proved in court, the sport will see a major restructuring of the charter system.