It has been reported that NASCAR’s new charter agreement might prominently feature a clause that excludes sovereign wealth funds (SWFs) from investing.
The NASCAR Cup Series has had a boom in global popularity, in line with the release of Netflix‘s docuseries ‘Full Speed’. Anchored by a system reminiscent of Formula 1’s Concorde Agreement, the charter system ensures financial security and visibility for teams, guaranteeing spots on the starting grid and stable revenue flows.
Current negotiations are focused on forging a new charter system among NASCAR and team owners. According to sources like Adam Stern of Sports Business Journal, as reported by Planet F1, a significant development might be the proposed ban on investments from SWFs. These funds, fueled by national revenues, have historically sought diverse international portfolios, extending their reach into sports ventures—evident in Saudi Arabia’s Public Investment Fund’s involvement in avenues like LIV Golf and Newcastle United.
This investment strategy, while lucrative, has not been without controversy. Accusations of “sportswashing” have been leveraged against such funds, suggesting that some nations might use sports investments to overshadow less savory aspects of national policy, including human rights issues. Excluding SWFs could be a move to shield NASCAR from potential ethical dilemmas and political entanglements.
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As discussions proceed, the exact stipulations of the new charter agreement remain in the negotiation phase, with the SWF ban still under evaluation.
Understanding the Charter System in NASCAR
What is the charter system in NASCAR?
The charter system was introduced in 2016 and the rationale behind it was to bring stability to the teams and business certainty.
There are 36 charters, all of which are subject to performance standards. Should a charter team finish in the bottom three for three years in a row, NASCAR reserves the right to take away that charter. A team can also only have up to four charters.
Why was the charter system introduced to NASCAR?
The charter system assures each team entry into every race, thereby protecting some of the prize money. Therefore, ownership in a charter raises the value of the team well above any tangible asset by assuring potential sponsors that their investments will pay off in the long run.
When do the current charters expire?
Current charters run until the end of 2024, which corresponds with the expiration of NASCAR’s current media rights deal.
How much does a NASCAR charter cost?
When the charter system was first introduced, charters were free. The value of these charters increased dramatically because teams could sell or lease them. For instance, before the 2023 season, the Spire team was reportedly paying $40 million for a charter, which stands way above what 23XI Racing paid in 2021.
It will reportedly “cost $25 to 30 million to buy a charter” for the 2025 season, according to Brad Keselowski on the FOX Sports.
How much does NASCAR make from charters?
While there isn’t an official figure regarding the revenue NASCAR receives from charters, reports say charter teams pull in around $8 to $9 million a year. Every charter team makes money off of every race, with different amounts paid based on performance in each race.
