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Race Team Alliance

(Redirected from NASCAR charter)

The Race Team Alliance (RTA) is a 501(c)(6) organization based in Charlotte, North Carolina, founded by businessman and former NASCAR team stakeholder Rob Kauffman. The organization currently consists of 15 NASCAR Cup Series teams and is led by Jonathan Marshall. The organization negotiates with NASCAR on major topics within the league on behalf of NASCAR race teams in said topics, including the implementation of the charter system and negotiating media rights deals. The organization within recent years has also overseen expansion, including the purchase of a motorsports news site along with a now-defunct NASCAR esports league.

Race Team Alliance
FormationJuly 7, 2014 (2014-07-07)
HeadquartersCharlotte, North Carolina
Executive director
Jonathan Marshall
Chairman
Rob Kauffman
Websitewww.raceteamalliance.com

The RTA has seen mixed reception throughout the NASCAR landscape; particularly for its influence in creating the charter system and the system's consequences within NASCAR. In recent years, while the system has received praise from some drivers and larger race teams for providing teams with needed tangible assets, the system has also seen mounting criticism from other smaller, independent teams who claim that the system drives out smaller teams, stunting the growth of smaller teams while also favoring larger teams. The organization has also seen criticism from NASCAR businessmen, including Brian France and Bruton Smith, deeming the organization as unnecessary.

History

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Beginnings

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On July 7, 2014, the Race Team Alliance (RTA) was officially announced by then-Michael Waltrip Racing stakeholder Rob Kauffman. At the time of the initial announcement, the RTA had nine teams, with the RTA being formed to negotiate with NASCAR to increase the value and cut costs on behalf of NASCAR teams.[1] Immediately afterwards, the organization came under scrutiny from NASCAR businessmen, including Bruton Smith and Brian France, who found it to be unnecessary and thought that NASCAR was sufficiently supporting them regardless.[2][3] However, by August, the RTA expanded to include every full-time team with the exception of Furniture Row Racing.[4] By 2015, Kauffman declared that his objectives were "overplayed", instead comparing the RTA to being in "kind of in the background and there's not much to talk about" despite possibilities of the RTA negotiating with NASCAR for increased financial aid.[5] Within the same year, the RTA also partnered with DraftKings and Rev the Vote to expand marketing deals.[6][7] By July, Kauffman stated that negotiations with NASCAR had "gone very well so far", praising an uptick in communication between the two organizations.[8]

Implementation of the charter system

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In 2015, Hendrick Motorsports owner Rick Hendrick stated that negotiations with NASCAR to "create some sort of permanent value for the teams" were occurring in response to a phenomenon where if a team shut down, the owners would most likely go into debt as they could not sell off their equipment for their proper worth.[9] By December, the RTA and NASCAR COO Brent Dewar were "cautiously optimistic" that a franchising deal that would guarantee an unspecified number of starting spots per race along with some of the television revenue from media rights deals would be made.[10] The next month, Kauffman reported that the two sides were nearing an official deal.[11]

On February 9, 2016, a week before the 2016 Daytona 500, the RTA and NASCAR announced the implementation of the charter system,[12] which sought to cut costs and increase profits for teams.[13][14] With the system, a 36 charters were allotted to teams; this would guarantee them a starting spot in every race along with increased purse money for chartered teams. In addition, the NASCAR Cup Series field was limited to 40 cars and a team owner's council was formed.[12][15] Teams also had the opportunity to sell or lease their charters.[12][15] Three days later, Wood Brothers Racing left the organization as they did not receive a charter.[16] In later years, in response to open teams entering races, Kauffman defended the charter system, claiming that part-time teams devalued the worth of a NASCAR race team and that only chartered teams should enter races.[17] NASCAR later implemented a rule reserving their right to repossess charters belonging to teams finishing in the bottom three of owner points for three seasons in a row at NASCAR's discretion;[18] although, as of 2023, no teams have lost a charter that way.[19] Teams may also possess no more than four charters per NASCAR's four car limit in the Cup Series.[18]

Business expansion

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In January 2018, Sports Business Journal's Adam Stern reported that the RTA and NASCAR were collaborating on creating an esports league on iRacing, an online racing simulation video game.[20] By the end of the year, the esports league was officially announced; although, the league took place on NASCAR Heat 3.[21] Within 2018, the RTA also appointed Jonathan Marshall to run the organization.[22] In October 2019, the RTA purchased Speed51, a motorsport news site that primarily covers short track races.[23] The acquisition saw mixed reception; in an analysis from reporters from fellow motorsports news site Frontstretch, some thought the purchase could expand the marketing potential of NASCAR teams, while others thought it would suppress opinions that NASCAR teams did not agree with.[24] In 2021, the RTA rebranded Speed51 to become Racing America, along with promises of expanded content from NASCAR teams on Racing America.[25]

Disputes with NASCAR, fears of league-splitting

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In October 2022, the RTA went public with their thoughts on equitable revenue distribution within NASCAR, declaring that they thought current economic model that NASCAR was using had "little to no chance of long-term stability". Under the economic model, the $8.2 billion, 10-year media deal signed in 2015 allotted 65% of the deal to tracks, 25% to teams, and 10% to NASCAR. The RTA declared that while they would honor the current deal, in the next media deal that was to be made in 2024, they demanded more revenue to "cover baseline costs".[26] The next month, the RTA stated that they were exploring the idea of holding exhibition events that were not sanctioned by NASCAR in response to "struggling to turn a profit... thus forcing them to investigate other sources of revenue".[27] Despite a clause in the current deal prohibiting it, the exploration of the idea led to fears of a potential split similar to American open-wheel car racing between Championship Auto Racing Teams (CART) and the Indy Racing League (IRL) that occurred in the late 1990s.[28][29]

By April 2023, the RTA and its members were boycotting quarterly meetings with NASCAR, stating further displeasure with the revenue sharing system.[30] However, by the next month, the teams backtracked and requested "meaningful dialog", wanting permanent charters instead of requiring charter renewal along with previously stated economic concerns.[31] Part-stakeholder in 23XI Racing, Denny Hamlin, declared that making charters permanent would protect investors and give "security" to their investments to a team.[32] By February 2024, the RTA hired an antitrust lawyer, along with Hendrick Motorsports' vice chairman Jeff Gordon claiming that the team, despite being one of the most successful, had not made a profit within the last decade.[33] In October, 23XI Racing and Front Row Motorsports, who declined to sign the 2025 charter agreement, filed a lawsuit against NASCAR on antitrust grounds regarding the charter system.[34]

Critical reception

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Immediately after the organization was formed, it faced criticism from leaders and businessmen within the NASCAR landscape; particularly to fears of the RTA stunting NASCAR's growth. Three days after the organization was announced, Speedway Motorsports, Inc. (SMI) founder Bruton Smith heavily criticized both the organization and its founder Rob Kauffman, stating that NASCAR had already been supporting the teams sufficiently, declaring that he did not "know anything about it that's good for what we do. I don't see anything that's going to be good for the sport. Nothing."[2] Ten days later, the organization saw further criticism from then-NASCAR CEO Brian France, with him declaring that listening to one combined organization instead of hearing organizations separately "would probably be the worst thing we could ever do", calling the organization "unnecessary".[3] In 2018, in statements given on NASCAR Race Hub, former NASCAR crew chief Larry McReynolds stated his belief that the RTA was "chasing something that I'm not sure we're chasing", believing its existence was not "the healthiest thing for the sport".[35]

The RTA during its formation saw defense from longtime NASCAR personality and team owner Richard Petty, whose team was in the RTA. In interviews, Petty claimed that the RTA only wanted to spur the growth of NASCAR, claiming that "anything we do to tear NASCAR down is cutting our own throats".[36] NASCAR's president at the time, Mike Helton, later released a press statement on behalf of NASCAR in July 2014, declaring that the RTA did not pose a threat to NASCAR.[37] Helton later reaffirmed this position in February 2015, stating that while NASCAR preferred to talk to each owner individually, he had "respect for what the owners do through their business models".[38] Driver Tony Stewart gave comments of praise to the RTA's willingness to collaborate with NASCAR in an interview in July 2015.[39]

Charter system

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The charter system has drawn both praise and criticism from various personalities in NASCAR, with the system itself becoming a highly polarizing topic. Current NASCAR president Steve Phelps has praised the system, stating that NASCAR was "all-in" on the system and that the system was "valuable to the sport overall" despite also saying the current system was not profitable to teams that had a charter.[40] The system has also seen praise from multiple beat reporters; when the system was first announced, The Evening Tribune's Ryan Papaserge defended it, stating that the implementation of it was "NASCAR adapting to the 21st century", defending how owners could have more freedom negotiating with sponsors or NASCAR leadership.[41] In 2023, Sportcasting's John Moriello declared that removing the system would "diminish the value of teams faster than cryptocurrencies can devour a retirement nest egg", repelling potential investors.[42]

Criticism of the charter system has come from various groups; particularly from smaller, single-car teams. After the system was implemented in 2016, Mike Hillman and his team, Hillman-Circle Sport, criticized the implementation of the system, which was officially implemented one week before the 2016 Daytona 500.[43] When Germain Racing sold its charter and announced that it would be closing in 2020, the driver at the time, Ty Dillon, stated that he believed that the charter system had made it difficult for single-car teams who had not been "at the top level of the sport or [had] an incredible amount of money to leapfrog into the top spot".[44] Another owner that shut down his team in the same year, Leavine Family Racing's Bob Leavine, stated that he blamed the charter system along with the pandemic as reasons for shutting down, while also stating that he did not get enough from selling his charter than what Leavine put into it.[45] The guaranteed entries for chartered teams also raised comparisons to Indy Racing League's controversial "25/8 rule" for the 1996 Indianapolis 500 by The Indianapolis Star's Curt Cavin.[46]

Members

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Current members

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Team Joined Cars Notes
23XI Racing 2021 2
Front Row Motorsports 2014; 2022 2 Left in 2016; rejoined in 2022
Hendrick Motorsports 2014 4 Founding member
Joe Gibbs Racing 2014 4 Founding member
JTG Daugherty Racing 2014 1
Kaulig Racing 2022 2
Legacy Motor Club 2021 2 Formerly known as Petty GMS Motorsports
Richard Childress Racing 2014 2 Founding member
Rick Ware Racing 2022 2
RFK Racing 2014 2 Founding member; formerly known as Roush Fenway Racing
Spire Motorsports 2021 3
Stewart-Haas Racing 2014 4 Founding member
Team Penske 2014 3 Founding member
Trackhouse Racing 2022 2
Wood Brothers Racing 2019 1

Former members

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Team Joined Left Notes
BK Racing 2014 2018 Closed; assets sold to Front Row Motorsports[47]
Chip Ganassi Racing 2014 2021 Founding member; team and its two charters sold to Trackhouse Racing[48]
Circle Sport 2014 2016 Closed
Germain Racing 2014 2020 Closed; charter sold to 23XI Racing[49]
Go Fas Racing 2014 2020 Closed; charter sold to Live Fast Motorsports[50]
HScott Motorsports 2014 2016 Closed; two charters sold: one to Premium Motorsports after leasing charter from Premium in 2016, and one to Furniture Row Racing[51]
Leavine Family Racing 2017 2020 Closed; previously bought from Tommy Baldwin Racing in 2016, charter later sold to Spire Motorsports[52]
Live Fast Motorsports 2021 2023 Does not have a charter at the time of shutdown; sold to Spire Motorsports[53]
Michael Waltrip Racing 2014 2015 Founding member; closed; two charters sold, one each to Stewart-Haas Racing and Joe Gibbs Racing in 2016[54]
Phil Parsons Racing 2014 2015 Closed; assets sold to Premium Motorsports[55]
Premium Motorsports 2017 2020 Closed; previously bought from HScott Motorsports, sold to Rick Ware Racing[56]
Richard Petty Motorsports 2014 2021 Founding member; merged with GMS Racing to form Petty GMS Motorsports[57]
Tommy Baldwin Racing 2014 2016 Closed; charter sold to Leavine Family Racing[58]

References

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  50. ^ Wolkin, Joseph (February 12, 2021). "With Live Fast Motorsports, Matt Tifft Has Found His Way Back To Nascar As Its Youngest Team Owner". Forbes. Archived from the original on February 23, 2024. Retrieved February 23, 2024.
  51. ^ Nguyen, Justin (December 5, 2016). "HScott Motorsports sells charters, will not race in 2017". Overtake Motorsport. Archived from the original on February 23, 2024. Retrieved February 23, 2024.
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  54. ^ Long, Dustin (February 9, 2016). "Joe Gibbs Racing, Stewart-Haas Racing each to acquire fourth charter". NBC Sports. Archived from the original on February 23, 2024. Retrieved February 23, 2024.
  55. ^ Wolkin, Joseph (August 6, 2015). "Premium Motorsports Officially Completes Purchase of Phil Parsons Racing". Frontstretch. Archived from the original on February 23, 2024. Retrieved February 23, 2024.
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  58. ^ Bianchi, Jordan (November 17, 2016). "Tommy Baldwin Racing sells charter to Leavine Family Racing". SB Nation. Archived from the original on February 23, 2024. Retrieved February 23, 2024.
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