“We’ve Had 11 Teams Go Out of Business”-Denny Hamlin Calls on Team Owners Amidst NASCAR’s Murky Charter Deal

NASCAR is all about high energy, speed, and strategy. But what outsiders might not know is a quieter conflict brewing just below the surface. A “cold war” is on between NASCAR’s governing body and its team owners. While several areas spark a heated disagreement between the two, the primary battleground remains the charter system.

As the current charter deal is set to expire at the end of the year, NASCAR and team owners have hit a standstill to find a common ground. However, it seems like the matters are not simply simmering and Denny Hamlin has openly addressed the boiling issue at hand.

Shots fired by Denny Hamlin over Charter deal

In the past weeks, there have been a lot of talks about the charter deals and Denny Hamlin found himself answering a question that has been on everyone’s mind in a recent press event. How will teams stay united through all this?

To that, he said, “Feel like we have been. I think that it’s just a tough situation because every team does want a little different things here and there. There are four basics that we all feel like we deserve.” 

So what are these demands that translate to the ‘four basics‘?

• Increased revenue to help the teams 
• Making charters permanent
• More voice in NASCAR’s decision to avoid an unexpected cost increase
• Share of revenue from the new business opportunities.

Revealing the disparity by the parity-loving NASCAR, Denny Hamlin shed light on the worsening aftermath of a recent TV rights agreement.

Justifying a higher revenue share for the teams, he said, “But I mean, why this is such an important thing is we’ve had 11 teams go out of business since 2016. That’s not good. And certainly, if we can continue on the trend of a couple of stakeholders doing really well and one not, that will continue. And that’s not going to be good for our sport”.

NASCAR takes the major chunk from the races since it’s a privately owned company. But how much? No one knows! According to reports, each charter receives up to $8-9 million payout, but now the team owners are asking for double. They said the current payout doesn’t cover the overall expenses and they need to rely on sponsorship. That is why you see racers covered in sponsor names.  

Moreover, the length of the charter extension is also making teams unhappy. France said he could only commit for seven years, but teams want charters to be permanent. After all, it is expensive at a whopping $40 million. Denny Hamlin, besides emphasizing the aspect of financial stability, has once also presented an emotional angle. On Dale Jr Download, he said, “Rick Hendrick and Joe Gibbs have invested in this sport for decades and deserve to give their kids that permanent charter and be something that can be passed down.”

Hamlin voiced serious concerns about the longevity of the sport. He said, “We’ve had 11 teams go out of business since 2016. That’s not good. And certainly, if we can continue on the trend of a couple of stakeholders doing well and one not, that will continue. And that’s not going to be good for our sport.” His feelings were echoed by his co-owner Michael Jordon, who is not new to the sports and business sphere.

Michael Jordon echoes Hamlin’s sentiments

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Michael Jordon, co-owner of the 23XI team, echoed Denny Hamlin’s views. He broke his long silence on the teams vs NASCAR for charter permanency and shared his thoughts with the New York Times. He said, “If you had permanent charters, then you could create a revenue stream, either with new investors or different types of sponsorships that would subsidize that type of variance between ownership and the league. That’s a big miss.”

He added, “If you don’t correct that, this sport’s going to die not because of the competition aspect, but because economically it doesn’t make sense for any business people.”

Not just him, but Jordon’s long-time business and financial manager Polk told The Athletic about the team owners’ concerns. He said, “We’re basically tenants in an apartment building. We have these charters and they give us certain rights, and we have responsibilities because of the rights they give us. But at a date certain — which right now is Dec. 31, 2024 — we have no further rights to renew, and (the charters) could be taken away from us.”

With so much backlash from teams, we cannot understand why the governing body cannot make charters permanent. What good is it to make teams unhappy? After all, they are who make and run NASCAR. Well, it remains to be seen how both parties will reach a common ground. What do you guys think of the situation? Do you think Hamlin’s been too harsh with his words or is he right?