Dale Earnhardt Jr. And Michael Jordan Have a Different Inflation Concern Than the Rest of Us Face
The price of a gallon of gas has dropped from an arm and a leg to just an arm, but Dale Earnhardt Jr. and Michael Jordan nevertheless have concerns about inflation that the rest of us don’t have to consider.
A report this week says the cost to continue building upon what they’ve already created in NASCAR has skyrocketed in less than a year. Jordan can deal with it by designing another line of shoes to sell at $179 a pop, but Junior may have to boost the price of High Rock Vodka to something that would drive a man to drink.
Dale Earnhardt Jr. and Michael Jordan haven’t firmed up plans
If the No. 1 dream of NASCAR fans is for Kyle Busch, Denny Hamlin, and Joey Logano to wreck themselves out of the Championship 4 on the opening lap, then seeing Dale Earnhardt Jr. field a Cup Series team surely runs a close second.
Earnhardt currently operates a successful Xfinity Series team in conjunction with his sister and Hendrick Motorsports owner Rick Hendrick. JR Motorsports debuted in 2005, scored its first victories in 2008, and has earned series championships with Chase Elliott (2014), William Byron (2017), and Tyler Reddick (2018) driving. Noah Gragson has a shot at delivering another title this fall.
The Earnhardts have spoken previously about fielding a Cup Series team, but there’s a steep price associated with racing in the top NASCAR series.
Meanwhile, Michael Jordan is in Year 2 of building out 23XR Racing with partner Denny Hamlin. Bubba Wallace won the organization its first checkered flag last fall at Talladega, and the addition of a Toyota driven by Kurt Busch resulted in a victory at Kansas this season.
The 23XI organization pulled a stunner this summer by signing Tyler Reddick for 2024. However, Wallace and Busch are both signed through next season and could be extended (assuming Busch’s current health issue is resolved) beyond that. Thus, Jordan and Hamlin may be expanding to three cars in the near future.
Inflation has reared its head in the NASCAR charters market
The first step for Dale Earnhardt Jr. to join the NASCAR Cup Series or for 23XR Racing to grow is to acquire one of the 36 charters. A chartered car guarantees a spot on the grid of every race, which isn’t an issue since the Daytona 500 is typically the only race for which there might be more entries than starting spots.
But the financial benefit of owning a charter for each car is much more significant. Typical weekly race purses in the Cup Series are above $7 million, but the system guarantees chartered cars a disproportionate cut. It’s largely why JTG Daugherty mothballed Ryan Preece’s unchartered car last offseason.
The last charter to change hands was the one 23XI bought from Starcom Racing late last season to prepare for Kurt Busch’s arrival, and Sports Business Journal reported that it carried a $13.5 million price tag.
Now, however, the same publication reports the asking price has soared to $20 million. While that doesn’t mean a prospective seller will get that amount, it does become the starting point in negotiations that might ultimately end in the two sides settling on, say, $17.5 million.
That’s a huge upfront investment, particularly when the cost of running a Cup car is probably twice that amount annually.
Who might sell to Dale Earnhardt Jr. or Michael Jordan?
There was a brisk market for charters last year as Kaulig Racing, Trackhouse Racing, Petty GMS, and 23XI all went about building out two-car teams. There have been no transactions this year, nor are there hot rumors about impending deals.
However, news of an available charter would undoubtedly interest the aforementioned Dale Earnhardt Jr. and Michael Jordan, and likely Maurice Gallagher at Petty GMS. Justin Marks has masterminded the rise of Trackhouse beautifully, but he might be stretched too thin for now to enter a bidding war. On the other hand, retired boxing great Floyd Mayweather Jr. might see the next available charter as his opportunity to move into racing full-time and make $20 million his opening offer.
You can’t have a buyer without a seller, so who might part with their charter?
Rick Ware Racing slimmed down from four charters (one of them was a complicated arrangement with Richard Petty Motorsports that opened the door for Getty GMS) to two. The team is going nowhere from a competitive standpoint and could theoretically forfeit a charter for non-performance after next season, so selling makes sense.
SBJ also points to Live Fast Motorsports (Corey LaJoie’s car) and Spire Motorsports (B.J. McLeod’s shop). However, both should hang in until NASCAR negotiates the next round of TV contracts. NASCAR will score more top-line revenue for the sport and might even agree to share a larger percentage of the pot with its chartered teams.
If that’s the case, then $20 million becomes less theoretical, and perhaps the starting point for bidding edges closer to $25 million.
Got a question or observation about racing? Sportscasting’s John Moriello does a mailbag column each Friday. Write to him at [email protected].