Majority owner Michael Jordan and minority owner Denny Hamlin announced Sept. 22 their formation of a single-car team, with Bubba Wallace as the driver. Jordan and Hamlin have agreed to purchase a Charter, paving the way for the team‘s creation.
RELATED: Michael Jordan, Denny Hamlin to start team with Bubba Wallace
It was on Feb. 9, 2016 in Charlotte, North Carolina, that NASCAR executives and team owners stood together to announce a landmark long-term agreement on an owner Charter system.
The agreement provided teams with an increased business certainty and the ability to work more closely with NASCAR to continue to produce best-in-class racing.
Below are a few key points about the Charter agreement:
— This was announced in 2016 as a long-term agreement. Earlier in 2020, NASCAR President Steve Phelps announced an extension of the Charter system through 2024. “The Charter agreement is delivering stability and long-term value to existing team owners while providing a clear path for ownership in the NASCAR Cup Series,” Phelps said. ” … A healthy ownership structure ensures strong, competitive racing for our fans, which is a goal the industry collectively shares.”
— There are 36 Charter teams. The number 36 was not pre-determined — back in 2016, NASCAR analyzed which teams showed a long-term commitment to the sport by attempting to qualify every week for the past three years. That criteria yielded 36 Charters.
— A Charter guarantees entry (and therefore, a portion of the purse) into the field of every NASCAR Cup Series points race.
— Teams may sell their Charters on the open market.
— Charter owners may transfer their Charter to another team, for one full season, once over the first five years of the agreement.
— Charter teams are held to a minimum performance standard. If a Charter team finishes in the bottom three of the owner standings among all 36 Charter teams for three consecutive years, NASCAR has a right to remove the charter.
— Organizations now have a hard cap of four cars; there no longer is the ability to run a fifth car for rookie drivers.
— NASCAR Cup Series fields consist of 40 cars — a change made, from 43 cars previously, when the Charter system was initially announced. That means 36 Charter teams are guaranteed to make every points race, and four non-Charter (or “open”) teams will complete the rest of the field.