Front Row Motorsports Highlights Charter Flaw

Before the calendar turned to 2023, Front Row Motorsports did something unusual: they announced their driver lineup for the upcoming season. Usually, the team waits until right before the start of the season to reveal it. Over the past few seasons, Michael McDowell returning to the team always seemed inevitable. However, the intrigue around their second Cup car has been the announcement to look for. Since David Ragan left fulltime racing in 2019, the 38 car had been a bit of a revolving door of younger drivers. When Todd Gilliland was announced as the third rookie in three years to wheel the 38, there was expectation (as long as he ran okay) that Gilliland would bring some stability to the ride moving forward. By the end of 2022, it certainly seemed that way.

Only a couple of weeks before the Daytona 500, Front Row Motorsports dropped the announcement that Zane Smith would be taking five races from Gilliland in the 38 car, in addition to his Daytona 500 attempt in the 36. While it was not surprising to hear Front Row wanting Smith to get Cup Series seat time, it was shocking to learn it was going to be at Gilliland’s expense. Front Row Motorsports has the equipment to field a third car for certain races. Why would they need to swap Smith in for Gilliland rather than run the 36 for those five races?

Talladega was the second race where Zane Smith replaced Todd Gilliland. Unlike at Phoenix (the first time), both Smith and Gilliland drove for Front Row Motorsports. The only difference is the teams were swapped from how it was at Daytona. If both drivers are running for Front Row, why would they need to swap teams? Apparently, Smith’s sponsors wanted the young driver to be in the 38. Whatever the reason for the swap, it is a peculiar situation where a team has the capability of running a third entry but decides against it. Front Row Motorsports is demonstrating the massive issue that NASCAR has with its charter system. Due to that flaw, it might cost Front Row Motorsports a talented young driver.

The Charter System

Back in 2016, NASCAR reimagined the way the Cup Series would work. Instead of qualifying speed and then points deciding who would race on Saturday nights/Sundays, NASCAR introduced the charter system. Cup Series teams would acquire charters from NASCAR that would guarantee them entry into every race on the calendar. Based on their analysis of the teams (at the time), NASCAR decided to sell 36 charters. Teams could acquire up to four charters. Once acquired, teams could use them or lease them out to other teams. Essentially, the charter system was introduced as a way to help build financial stability for the Cup Series teams.

The charter system was extended through the 2024 season in 2020. In one sense, the system can be considered a massive success. It has given teams a tangible asset that can be used for financial benefit. A Cup Series team has a multi-million dollar asset that can be liquidated if need be. Teams that have bowed out of Cup Series competition have been able to sell their charters for tens of millions, most notably Chip Ganassi. Plus, the threat of losing a charter has helped weed out some of the back markers. StarCom Racing was likely about to lose their charter for poor performance. They sold their charter to 23XI Racing, which replaced the 00 with a competitive ride.

Entry List Problems

From a financial asset point of view, the charter system has worked. This is why Cup Series teams are adamant to make it permanent. From a competitive view, it has also mostly worked. While there are still some teams who are off the pace, that is limited to a handful of cars. There are no more field fillers, start and parkers, or one-off teams. Outside of LivFast and Rick Ware Racing, every Cup Series team with a charter has been somewhat competitive. 36 entries show up each week with the intent of running the full race. For most weeks, that number stays at 36.

If NASCAR is second guessing the charter system, it might have to do with the lack of non-chartered entries the Cup Series has every weekend. Since the start of 2019, there have only been five races where the entry list has exceeded 40, the maximum field size. Of those five, four of them were the Daytona 500. Other than the 2021 Indy Grand Prix, every non-Daytona 500 race has not sent a driver home after qualifying. The NextGen car has only made the problem worse. Only the Daytona 500 has seen a full field of NextGen cars take the track. Among the 46 regular season races in the NextGen car, only 19 have had more than the 36 charted teams enter.

It is a damning statement that almost 60% of NextGen Cup Series races have only had the chartered teams enter. When there are an additional four guaranteed starting spots for the taking, why are there not at least 40 teams every week? While starting and parking is frowned upon, what is stopping a team from doing what LivFast is doing? Surely The Money Team or NY Racing could easily show up, meet minimum speed, and finish double-digit laps down to pocket some race winnings. There are other teams who have NextGen cars at their shop. The big question is why are they not showing up to race?

Lack of Financial Incentive

NASCAR stopped publicly publishing the race winnings as part of their results back when the charter system was introduced. Before then, one could easily find out how much each driver won for their efforts in a race. Now, the public gets to know the overall purse for each event, but not the allocation of those funds per finishing position. What the public does know is that the chartered teams get a larger chunk of the purse compared to the non-chartered teams.

Along with guaranteed entry into each race and a tangible financial asset that can be sold, the other benefit for owning a charter is the winnings payout per race. Using Front Row as an example, the 36 car would earn less money finishing fifth than the 34 or 38.  While the exact difference between the two in unknown, it must be a significant difference if teams are passing on it every weekend.

This discrepancy in how the race winnings are dispersed has to explain why non-chartered teams have stopped showing up. Could you imagine a back-marker team in the mid-2000s not showing up to a race where they were guaranteed a starting spot? That is the NASCAR that exists today. The way NASCAR has financially setup their payouts encourages teams to keep their cars at the shop. After making five starts last year in the first ten races, NY Racing has yet to return to the Cup Series since Spring Talladega in 2022. Greg Biffle was able to collect a Top-20 at Atlanta and they still did not try again after Talladega. The payout must have been not worth the effort of showing up to the track.

NASCAR is expensive, especially to run in the Cup Series. The upstart cost for a Cup Series team is higher now with the NextGen car. It is understandable that smaller teams might not have the budget to run 36 races. However, the whole point of the NextGen car is to drive new ownership into the sport. How will that happen if non-chartered racing is non-existent? When looking at who currently owns the charters, there are only two or three that will likely be available in the near future. If there are not a plethora of charters waiting to be bought, then why will new ownership come into the sport when current non-chartered teams have decided it is not financially worth it to race? Once again, non-chartered teams are actively not showing up to races they will qualify for. This has to be a financial issue.

Front Row’s Dilemma

When it comes to upstart teams, there is an argument to be made why they are not showing up for a guaranteed starting spot. Teams like Beard Motorsports, The Money Team, and NY Racing likely only have one or two chassis and limited employees. In terms of man power alone, it might not be enough to meet whatever requirement NASCAR asks.

However, Front Row Motorsports does not have that issue. They have the chassis, engines, equipment, and personnel to field a part-time third car. Front Row was able to run it out there for the Daytona 500 and GEICO 500. Todd Gilliland has been able to piece a full season for 2023 after being booted from the 38 for five races. In theory, Front Row could have ran the 36 for either Smith or Gilliland for those five races. Instead, Gilliland will be driving Rick Ware’s 15 entry the remaining for four of the five.

Front Row should be thrilled with their current issue. They have three Cup Series ready drivers in their system. One is a top prospect who needs time to learn the NextGen car, one has taken a step forward in his sophomore season, and the other is a veteran driver who has helped moved the team into relevancy. Instead, this has turned out to be a nightmare scenario where it is almost guaranteed that Front Row will lose at least one driver next season.

Due to the financial disincentive based on the charter system, Front Row decided to choose Zane Smith over Todd Gilliland. While sponsors and other factors surely played their part, the most logical assumption that can be made is that the payout difference between the chartered 38 and the non-chartered 36 is too great to run the 36. Front Row believes it would be better to potentially lose Gilliland, a driver they have spent a lot of time and energy into developing, than it would be to run a third car for five races (five when they made the decision; four now that Gilliland ran Talladega in the 36).

Based on Front Row’s decision, the issue is more than a simple driver swap. Financially, it is better for the team to not run the 36 car. Not only would the car qualify for the race, it would likely have a decent finish. Both Gilliland and McDowell have proven their ability to be Top-20 drivers in the Cup Series. While Smith has disappointed, there is no reason to believe that it is an issue with the equipment. Despite the fact that the 36 car would qualify and potential run well in every race it would attempt, it must be a financial loss for the team. How can a team with a Top-20 caliber car sit there and not use it when it might save them from losing a young driver? The answer points to money.

NASCAR’s Dilemma

It would be easy to say NASCAR should adjust the race winnings payout. Want more non-chartered teams to race, then pay them more money. Like Front Row Motorsports, Kaulig Racing, 23XI Racing, and Trackhouse have the potential to enter non-chartered cars at any track. If NASCAR wants those teams to compete more, surely it would be simple enough to adjust the payout.

In theory, yes it would be that easy. However, the reality is always more complicated. Any adjustment to the payout structure would have to addressed with the the team owners. Perhaps the aforementioned teams would like to see more winnings for their non-chartered teams. What about the teams who do not have this issue? They would likely not approve of losing race winnings so Front Row can salvage their relationship with Todd Gilliland.

NASCAR is reviewing the charter system currently and it is already causing a stir. In early April, Cup Series team owners skipped a meeting with NASCAR due to the charter issue. The teams want the charter system to be permanently established. It makes sense since each team sank millions to buy each charter. Each owner wants to ensure the ability to recoup those millions via sale of the charter. On the other hand, NASCAR has to be reviewing the flaws in the system. Surely, NASCAR cannot be happy with their top series consistently not drawing a larger entry list. Plus, there has been a lacking of new ownership entering the Cup Series. NASCAR is stuck between a rock and a hard place.