Dale Earnhardt Jr. speculated Tuesday about what would happen to the NASCAR Cup Series if the lawsuit filed by 23XI Racing and Front Row Motorsports reaches a settlement and Thursday’s “what if” frameworks become reality.
Speaking to his sister and business partner Kelley Earnhardt-Miller on their podcast, Earnhardt said permanent charters would effectively make the Cup Series a franchise model like stick and ball sports while significantly increasing the value of those who own them.
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Again, this was a hypothetical exercise on Tuesday, but as of this weekend, these are all valid points, with the trial reaching the conclusion drawn by the Hall of Fame.
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“If the charter remains nothing more than guaranteed entry into a single event, I think then the values will stay where they are today. What the teams have recognized is that if these charters became permanent and therefore basically a franchise, the values would be well north of $150 million. So you’re sitting there with a charter that’s worth say $25 million and from the stroke of Jim France’s pen it will now be $150 million dollars,” Earnhardt said in the latest Dale Jr.Download. “If you’re a charter owner, of course, you hope that happens. I believe, secretly, even the people who signed the charter agreement, that one way or another, ultimately, these agreements become permanent. That’s the ultimate decision that I think comes out of this whole trial.
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“There will be other little nuances about whether 23XI and Bob Jenkins will be compensated for certain damages, will this lever be pulled, will this little thing be changed, will someone lose their job, will this person be replaced? All of these things can happen, could happen, but ultimately I think what we’re deciding is do the charters become franchises, do they become permanent and done with a new value to the north of $150 million?
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The Earnhardts, who own JR Motorsports and someday want to compete in the Cup Series as full-time participants, know the barrier to entry will rise significantly now.
“If this happens, there’s no going back. It changes the sport forever,” Earnhardt said. “You will essentially have 36 franchises – no matter how many cars start a race – they will be franchises, owned and valued and they will sell and trade from one entity to another over the decades and centuries for however long it lasts. They will be a gigantic barrier to entry.
“As we’ve known racing for 75 years, if you wanted to build a Cup car and show up to a race and try to compete, you did. It’s probably not going to go very well, you’re going to compete against the regular teams and that’s what it was, but you could. It’ll be gone forever.”
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JR Motorsports considered purchasing a charter in the early days of the system, when one could have been purchased for $1 million, the price Michael Waltrip Racing charters were priced at, but they were not integrated into the system at that time.
It’s worth noting that the arrival of new OEMs, with Stellantis’ Dodge brand and Honda both looking like realistic opportunities, could allow NASCAR to launch as many as four charters into the market and another chance for a team like JRM to enter.
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