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Denny Hamlin makes argument for why charter system needs to be made permanent

The veteran driver and team co-owner says it's about governance and long-term franchise viability

Keeping in mind that Denny Hamlin often uses his podcast, Actions Detrimental, to negotiate in public in a way with NASCAR over the ongoing charter negotiation process, it’s no surprise that he tacked the latest reporting to come out over the past week.

The latest bullet points is that NASCAR issued the teams a document that ‘was of the worst yet’ in the opinion of the team owners and that sentiment was supported by Hamlin on Monday in the latest episode of his Dirty Mo Media show.

“It just seems to be going backwards, time after time, that the newest and latest is certainly not very good,” Hamlin said. “So, it just seems like we always take one step forward and two steps back and I just don’t know the reason for it.

“It was very interesting because we had one-on-one meetings with NASCAR executives and we felt like those meetings went well and we thought we were heard. And then when you get a document that doesn’t cover any of the things that we talked about, and actually not only didn’t cover those things but actually starts clawing back more on their side from us — it’s certainly not a good feeling for sure.”   

There has been all kinds of back and forth movement on the exact percentage of old and new revenue that the teams want, or that NASCAR is willing to give up, but the one constant loggerheads is that the sanctioning body just is not willing to make the charter system permanent.

The charter system has become something akin to ‘franchises,’ in stick in ball terms but NASCAR seemingly never intended it to become that way. At first, it was the means in which NASCAR guaranteed revenue to all full-time teams but then team owners began treating them like franchises.

And in stick-and-ball sports, franchises have a degree of governance over the sport in which they participate, and NASCAR is not, as of right now, willing to make that system permanent.

The public facing argument is that NASCAR says it can not guarantee what broadcast rights revenue will look like beyond the next seven years but Hamlin says it’s about control, power and governance.

“I quickly said, ‘permanent charters don’t cost anything’ and they still do not cost anything,” Hamlin said. “The only thing it costs is control and that’s the thing.

“Every agreement gets renegotiated after every TV contract. So, if the TV contract went to $10 in seven years, we still renegotiate the terms (over) that. So, it’s not like we were saying, and we have never ever said that we need this amount of money for eternity — as long as we’re part of this sport, we need this amount of money.”

Hamlin says that Rick Hendrick, Roger Penske, Joe Gibbs and Richard Childress have spent their entire lives investing into NASCAR and the value of that charter needs to be honored.

Simultaneously, Hamlin says himself and Michael Jordan, whom purchased charters alongside all the other new teams that spent 10-40 millions of dollars to buy those charters, need to have their investment honored.

Hamlin drew the comparison to a rental home, in that all these teams are investing into the NASCAR home, but that NASCAR refusing to make the charter system permanent renders moot their investment and further discourages additional spending into NASCAR — if the sanctioning body can just take that 10-40 million dollar rental investment away seven years from now, or after any charter negotiation window.  

“They have an asset that they can pass down to their kids and their grandkids,” Hamlin said. “And especially a family organization like Joe Gibbs Racing. They want to have something they can give their kids, ‘Hey, this business is now yours. This charter is yours.’

“Because in, in the instance that it all goes crumbling down, like in Stewart-Haas’ scenario, they were able to sell something to get back some of that investment that they spent over the decades, and they spent hundreds and hundreds of millions of dollars.

“They at least got some of that back. What we’re saying is that they deserve to have a permanent seat at the table when it comes to racing in NASCAR. We’re asking for, and 23XI is the same, we went out and spent millions of dollars on charters and we should be able to own that.”

Hamlin says what is the point of investing the money it took to own the charters, maybe pursue a third one, and build a state-of-the-art facility in Hunternsville, North Carolina if NASCAR can render that investmenet moot?

Hamlin says it’s a binary equation, either NASCAR makes charters permanent and they can derive value from their franchise status or it can give the teams a larger amount of revenue so it doesn’t have to be as dependent on sponsorship money.

“It’s a situation where, what we got offered from the money (standpoint) was not necessarily a game changer,” Hamlin said of NASCAR’s offers. “So if you’re not going to allow us to make money in the short term, at least allow us to build our franchise value and make money in the long run, which is our charters right now.

“We’re not getting either one. We don’t get a big enough chunk of the pie year-to-year to make us profitable but yet we don’t have a permanent charter either.

“So, you have to give us one or the other. At least give us long-term value or short-term value. We wouldn’t care about permanent charges if NASCAR gave us $20 million a year … but it has to be one or the other.”

Hamlin also says he’s not particularly worried that smaller teams might jump at NASCAR’s latest offer and that he believes all 15 teams are still unified. He also agreed that the likes of Joe Gibbs Racing, Hendrick Motorsports and Team Penske has ‘the stars and cars’ and that provides a degree of leverage that NASCAR can just exist without those teams.

Hamlin has said all along that the teams are more risk averse in their spending until either charters are made permanent or that they are given a greater amount of revenue. He also doesn’t think the smaller teams will jump at the latest offer based on how many smaller teams from the previous decade are still around.

“This is a very key moment in our sport in that, are we going to lock arms and do this thing together and grow this thing together or not,” Hamlin said. “We all want to make the tide rise and we want to rise together.

“And when the tide goes down, we’re going to lock arms and we’ll ride it out and make this thing rise back up together too. But it’s tough because everyone just has different agendas on what they need to survive.”

Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.

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