NASCAR's Charter System: A Decade of Guaranteed Starts and Growing Pains

The 2025 NASCAR Cup Series season marks a significant juncture, ushering in the first year of the second charter agreement, a decade after the system’s initial implementation. This new agreement, set to run through 2031, coincides with the beginning of a new broadcast rights cycle and, notably, the start of the season has been overshadowed by a federal antitrust lawsuit filed by two teams. These teams allege violations by the sanctioning body stemming from the recent charter agreement negotiations, highlighting underlying tensions within the sport’s premier division.

At its core, the ownership charter system in NASCAR provides teams with a guarantee of entry into every Cup Series race, along with a predetermined revenue stream based on negotiated terms. This foundational agreement, first established in conjunction with the 2016 television rights deal and lasting until 2024, has now been extended for another seven-year term. Beyond guaranteed participation and financial security, the charter agreement mandates team involvement in agreed-upon marketing initiatives and grants NASCAR the right to utilize team intellectual property for promotional purposes.

While this explanation provides a fundamental understanding, the system’s implications are far-reaching, leading teams to increasingly view charters as akin to franchises in traditional North American stick-and-ball sports, such as the New England Patriots or the Los Angeles Dodgers. The underlying concept is that each car number represents a distinct, professional sporting entity. However, a crucial distinction lies in the power dynamic: the NASCAR Cup Series is not an equal partnership, a fact that has become a central point of contention in the ongoing legal disputes.

Currently, there are 36 ownership charters in NASCAR. These charters confer significant advantages, most critically guaranteeing a starting position in every Cup Series event, irrespective of the number of cars attempting to qualify on any given weekend. Similar to how major professional sports leagues distribute revenue from television contracts and licensing agreements, NASCAR Cup Series charter holders receive similar financial benefits as stipulated in their agreements.

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It is important to note that the value of these 36 charters is not uniform. A charter’s financial worth is intrinsically linked to the performance of its associated car over the preceding two seasons. Year-end payouts for teams are determined by a formula that incorporates both the charter’s value and the team’s final standing in the championship standings. This performance-based valuation introduces a competitive element, incentivizing teams to consistently perform at a high level to enhance their charter’s marketability and their own financial returns.

Beyond the financial and competitive aspects, the charter system also grants teams a voice in the sport’s decision-making processes, functioning analogously to the Concorde Agreement in Formula 1. This allows for a degree of dialogue between the sanctioning body and the teams on matters pertaining to competition. This collaborative element is further amplified by the Race Team Alliance (RTA), a union-like entity representing a majority of the teams. The RTA actively engages with NASCAR on business-related issues and operates its own media entity, Racing America.

The maximum field size for a NASCAR Cup Series race is capped at 40 cars. This means that up to four teams without a charter can still compete, provided they meet qualification criteria. However, these non-chartered entries receive significantly less prize money compared to their chartered counterparts, underscoring the financial disparity created by the system.

The inception of the charter system was driven by a desire to foster long-term value for team ownership and to stimulate competition for acquiring charters. The rationale was straightforward: if charters held inherent value, then selling a team would become a more attractive proposition, moving beyond the mere sale of physical assets. In prior eras, when a Cup Series team ceased operations, its assets, beyond the race shops, often fetched minimal returns. Cars quickly became obsolete, and equipment was sold at a steep discount. The escalating value of ownership charters has, therefore, created a robust economic ecosystem, driven by supply and demand in the open market.

The introduction of the Next Gen car, now in its fourth season, aims to contribute to long-term cost containment. This car is largely a spec vehicle, with identical components for all teams except for the engines and body shells. The theory is that as parts inventory builds and becomes standardized, operational costs will eventually decrease. If the Next Gen car effectively reduces competition costs and future broadcast rights agreements yield increased revenue, teams may find themselves less dependent on sponsorship income to maintain financial stability.

Each ownership charter has the flexibility to be leased to another organization for a single season within an agreement period, provided it is returned to its original owner at the conclusion of that season. The initial charter agreement spanned from 2016 to 2020, aligning with a television rights deal. The current agreement, running from 2021 to 2024, is tied to the existing broadcast rights with FOX and NBC. The subsequent broadcast rights agreement, from 2025 to 2031, will include FOX, NBC, TNT, and Amazon Prime.

While there are currently 36 charters, this number is subject to NASCAR’s discretion, with corresponding adjustments to payouts. The history of these charters reveals a dynamic landscape of sales and leases since the system’s inception.

Trackhouse Racing No. 1: Originally awarded to Chip Ganassi Racing in 2016, this charter has been driven by notable drivers like Jamie McMurray and Kurt Busch. Trackhouse Racing acquired it after purchasing Ganassi’s NASCAR assets in 2021, with Ross Chastain now piloting the No. 1.

Team Penske No. 2: This charter has consistently been aligned with the No. 2 car, initially driven by Brad Keselowski and currently by Austin Cindric.

Richard Childress Racing No. 3: This charter has remained with Richard Childress Racing and the No. 3 car, driven by Austin Dillon throughout its history.

Front Row Motorsports No. 4: This charter’s history includes a significant period with Stewart-Haas Racing, driven by Kevin Harvick and later Josh Berry. Its sale to Front Row Motorsports in 2024 became contentious, requiring judicial intervention and remaining in a state of legal limbo. Noah Gragson is the current driver.

Hendrick Motorsports No. 24: Initially awarded to Hendrick Motorsports as the No. 5, it transitioned to the No. 24 when William Byron graduated to the Cup Series in 2018. Byron remains the driver.

Team Penske No. 12: This charter began with Roush Fenway Racing as the No. 6, later being associated with JTG Daugherty Racing before its acquisition by Team Penske to form their third car for Ryan Blaney.

Kaulig Racing No. 16: With a complex ownership trajectory, this charter started with Tommy Baldwin Racing, then moved through Leavine Family Racing, Spire Motorsports, and finally to Kaulig Racing, driven by various drivers including A.J. Allmendinger.

Legacy Motor Club No. 42: This charter’s lineage traces back to Richard Petty Motorsports. It has seen numerous number changes and ownership transitions, including GMS Racing and Petty GMS, before becoming Legacy Motor Club. John Hunter Nemechek is the current driver.

23XI Racing No. 35: Originally a Stewart-Haas Racing charter for the No. 10 car, it was sold to 23XI Racing. The sale’s approval was contested, leading to legal challenges. Riley Herbst is the current driver.

Joe Gibbs Racing No. 11: This charter has been a constant with Joe Gibbs Racing and the No. 11 car, driven by Denny Hamlin since its inception.

23XI Racing No. 23: This charter, initially with Germain Racing, was acquired by 23XI Racing. Its chartered status is currently under review due to ongoing litigation with NASCAR. Bubba Wallace is the driver.

Trackhouse Racing No. 88: This charter was previously associated with Stewart-Haas Racing’s No. 14. Following Stewart-Haas’s closure, it was sold to Trackhouse Racing. Shane van Gisbergen is the current driver.

Haas Factory Team No. 41: Originating from Michael Waltrip Racing and immediately sold to Stewart-Haas Racing, this charter has a consistent association with the No. 41. It remains with Haas Factory Team after Stewart-Haas’s downsizing. Cole Custer is the driver.

RFK Racing No. 6: This charter began as Roush Fenway Racing’s No. 16, later becoming the No. 6. It is currently driven by co-owner Brad Keselowski.

RFK Racing No. 17: This charter has been a constant with Roush Fenway Racing (now RFK Racing) and the No. 17 car, driven by Ricky Stenhouse Jr. and Chris Buescher.

Joe Gibbs Racing No. 54: This charter evolved from Joe Gibbs Racing’s No. 18, driven by Kyle Busch, to the No. 54 with Ty Gibbs.

Joe Gibbs Racing No. 20: This charter has remained with Joe Gibbs Racing and the No. 20 car, driven by Matt Kenseth, Erik Jones, and currently Christopher Bell.

Team Penske No. 22: This charter has consistently been with Team Penske and the No. 22 car, driven by Joey Logano.

Spire Motorsports No. 7: This charter’s history is extensive, starting with BK Racing, then Front Row Motorsports, Rick Ware Racing, and finally Spire Motorsports. Justin Haley is the current driver.

Hendrick Motorsports No. 9: Originally the No. 24 at Hendrick Motorsports, this charter became the No. 9 when William Byron moved to the No. 24. Chase Elliott drives the No. 9.

23XI Racing No. 45: This charter, initially with Richard Childress Racing, was leased and then sold to StarCom Racing before being acquired by 23XI Racing. Its chartered status is under legal review. Tyler Reddick is the driver.

Richard Childress Racing No. 8: This charter began as RCR’s No. 31, later becoming the No. 8. It is currently driven by Kyle Busch.

Wood Brothers Racing No. 21: This charter originated with GoFas Racing and was leased, then sold, to Wood Brothers Racing. Josh Berry is the 2025 driver.

Spire Motorsports No. 71: This charter has seen the most complex ownership changes, originating with Circle Sport Racing and passing through multiple teams before landing with Spire Motorsports. Michael McDowell will drive the No. 71 in 2025.

Front Row Motorsports No. 34: Consistently with Front Row Motorsports and the No. 34, this charter’s chartered status is under legal review. Todd Gilliland is the driver.

Rick Ware Racing No. 51: This charter began as Front Row Motorsports’ No. 38, later being sold to Rick Ware Racing. Cody Ware returns to drive the No. 51 in 2025.

Trackhouse Racing No. 99: This charter originated with Chip Ganassi Racing as the No. 42 and was acquired by Trackhouse Racing, becoming the No. 99. Daniel Suarez is the driver.

Legacy Motor Club No. 43: This charter’s history is tied to Richard Petty Motorsports, then Petty GMS, and now Legacy Motor Club. Erik Jones has driven the car since 2021.

HYAK Racing No. 47: This charter has remained with JTG-Daugherty Racing (now HYAK Racing) and the No. 47, driven by Ricky Stenhouse Jr.

Hendrick Motorsports No. 5: This charter began as Hendrick Motorsports’ No. 48, driven by Jimmie Johnson, and transitioned to the No. 5 for Kyle Larson.

RFK Racing No. 60: Originally from HScott Motorsports, this charter has seen several ownership changes and is currently leased to RFK Racing for Ryan Preece in 2025.

Joe Gibbs Racing No. 19: This charter started with Michael Waltrip Racing before being sold to Joe Gibbs Racing, where it has been driven by Carl Edwards, Daniel Suarez, and Martin Truex Jr. Chase Briscoe will take over in 2025.

Spire Motorsports No. 77: This charter began with Premium Motorsports and has been operated by various teams, including HScott Motorsports, Furniture Row Racing, JTG Daugherty Racing, and now Spire Motorsports. Carson Hocevar is the driver.

Kaulig Racing No. 10: This charter originated with Furniture Row Racing’s No. 78, eventually landing with Kaulig Racing. Ty Dillon will drive the No. 10 in 2025.

Front Row Motorsports No. 38: This charter began with BK Racing and has been with Front Row Motorsports since 2018. Zane Smith is the 2025 driver.

Hendrick Motorsports No. 48: This charter began as Hendrick Motorsports’ No. 88, driven by Dale Earnhardt Jr. and Alex Bowman, before becoming the No. 48 for Bowman.

The charter system, while providing stability and financial security, continues to be a focal point of discussion and legal action, highlighting the evolving dynamics of team ownership and the business of professional stock car racing. The resolution of the ongoing antitrust lawsuits will likely shape the future of this critical structural component of the NASCAR Cup Series.