The Happy Hour Racing NASCAR rules breakdown - the license behind every full-time Cup Series team, and what changed when the lawsuit ended.
The Short Version
A NASCAR charter is a license that guarantees a Cup Series team a spot in every points race, plus a bigger share of the money. There are 36 charters and 40 starting spots, so four spots are left for teams without one, called open teams. Charters used to come with an end date. Since the December 2025 settlement of the 23XI Racing and Front Row Motorsports lawsuit, they are permanent. Heading into 2027, the fight is over who owns the 36, not whether they will exist.
What a NASCAR Charter Actually Gets You
NASCAR and the team owners announced the charter system on February 9, 2016, in Charlotte. It came out of talks with the Race Team Alliance. The goal was simple. Give owners something they could build a business on.
Here is what a charter does, per NASCAR's own rundown of the system:
- A guaranteed start. A charter car is in the field for every Cup Series points race. No qualifying drama, no going home.
- A cut of the purse. Being in every race means getting paid in every race.
- Something to sell. Teams can sell a charter on the open market. It is an asset, like a franchise in other sports.
- A performance bar. Under the original rules, a charter team that finished in the bottom three of the owner standings among all 36 charter teams for three straight years could have its charter removed by NASCAR.
Why 36? It was not a number NASCAR picked out of the air. In 2016 NASCAR looked at which teams had tried to qualify for every race over the previous three years. That list came out to 36. At the same time, the field dropped from 43 cars to 40.
One thing the system does not have: tiers. You may see pages claiming there are "Tier 1" and "Tier 2" charters. NASCAR's descriptions of the system do not include any such thing. A charter is a charter.
Open Teams and the 41st Spot
An open team is any Cup entry without a charter. Open teams race for the last four spots each week. When more than 40 cars show up, the slowest open cars go home.
There is one extra door. Ahead of the 2025 season NASCAR created the Open Exemption Provisional, a "promoter's choice" spot for accomplished, world-class drivers from NASCAR or other kinds of racing. Trackhouse used it first, for Indianapolis 500 winner Helio Castroneves at the 2025 Daytona 500.
For 2026 NASCAR tightened it up. Whenever the provisional is granted, the field grows to 41 cars. Jimmie Johnson used it to start this year's Daytona 500 in Legacy Motor Club's No. 84. The catch: a car that starts on the provisional can win the race and the trophy, but it earns no championship points and no prize money from that event.
How Much Is a NASCAR Charter Worth?
A lot more than it used to be. The lawsuit put real sale prices into the public record, and Jayski published the table. In 2016, two Michael Waltrip Racing charters sold in a range of $1.25 million to $3.25 million. In 2021, 23XI Racing bought Germain Racing's charter for $4.7 million. A year later 23XI paid $13.5 million for StarCom Racing's.
Then 2024 happened. Stewart-Haas Racing closed its Cup program and sold charters to Trackhouse for $26.5 million, 23XI for $28 million and Front Row for $29.5 million. Spire Motorsports paid $40 million for Live Fast Motorsports' charter. That is the highest price in the table.
The Lawsuit That Made Charters Permanent
The old charters had an expiration date. NASCAR gave teams a new deal covering 2025 through 2031 on September 6, 2024, and wanted it signed that day. Every charter team signed except two: 23XI Racing, owned by Michael Jordan and Denny Hamlin, and Bob Jenkins' Front Row Motorsports. Their biggest complaint was that charters still were not permanent.
The two teams sued NASCAR on antitrust grounds on October 2, 2024. A judge let them race as charter teams to start 2025. In June 2025 a federal appeals court reversed that, and both teams ran the second half of 2025 as open teams.
The trial opened in federal court in Charlotte on December 1, 2025. Hamlin, Jordan, Jenkins, NASCAR chairman Jim France and team owner Richard Childress all took the stand. On December 11, before the jury got the case, the sides settled.
The joint statement on nascar.com said NASCAR would send every charter holder an amendment that includes "a form of 'evergreen' charters." Evergreen means permanent. The money terms were kept confidential. Here is what was reported:
- 23XI and Front Row got all six charters back, and were to be paid as if they had been chartered for all of 2025.
- Teams get a share of NASCAR's international media rights money, which they did not get under the prior deal.
- Teams get one third of new NASCAR deals that use the teams' intellectual property.
- The team veto grew from three "strikes" to five. Strikes let teams vote down NASCAR changes that would cost them money.
FOX Sports' Bob Pockrass also reported the outline of how permanent charters work. Two thirds of the teams have to approve each renewal of terms. A team that does not sign stays chartered and gets a year or more to sell. A team that misses performance standards must sell, with time to do it. And NASCAR's cut of a charter sale goes from 2 percent to 10 percent.
What Changes in 2027
The count stays at 36. The names on them keep moving.
Legacy Motor Club goes to three cars. In September 2025 Legacy and Rick Ware Racing settled a court fight over a charter sale, with Ware agreeing to sell and transfer a charter to Legacy. Jimmie Johnson's team will add a third full-time car in 2027, and Jayski lists Riley Herbst in the No. 84.
RFK Racing's No. 60 could run open. RFK runs Ryan Preece's No. 60 on a charter leased from Rick Ware Racing. RFK president Chip Bowers said in May the team will run three cars in 2027 either way. "Short of being able to access one or acquire one, we'll run open," Bowers said.
Haas Factory Team is staying put. In August, chief operating officer Joe Custer said the team has no interest in selling its charter and will keep running one car.
Charter numbers can also move between cars without a sale. For 2026, two of Trackhouse's charters moved to the Nos. 88 and 97, and Rick Ware Racing and RFK swapped which charter sits on which car. That is why a car number alone does not tell you who holds what.
Frequently Asked Questions
How does the NASCAR charter system work?
NASCAR has issued 36 charters to Cup Series teams. Each one guarantees that car a starting spot in every points race and a share of the purse. The other four spots in a 40-car field go to open teams that have to race their way in.
How many charters are there in NASCAR?
36, the same number since the system began in 2016. Organizations can own more than one, so the number of teams is smaller than 36.
How much does a NASCAR charter cost?
There is no set price. Teams sell them to each other. Sale prices filed in the lawsuit show charters went for $1.25 million to $3.25 million in 2016 and as much as $40 million in 2024.
Are NASCAR charters permanent now?
Yes. The December 2025 settlement with 23XI Racing and Front Row Motorsports made charters "evergreen," meaning permanent, for all charter teams. The terms around them still get renewed over time.
What is an open team in NASCAR?
A Cup Series team without a charter. Open teams are not guaranteed a starting spot and have to qualify into the field when more than 40 cars enter.
What is the Open Exemption Provisional?
A guaranteed spot NASCAR can grant to a world-class driver without a charter. Since 2026 it adds a 41st car to the field. The driver can win the race but earns no championship points or prize money from it.
Can NASCAR take away a charter?
Under the original rules, yes, for a team that finished in the bottom three of the charter teams' owner standings three years in a row. Under the permanent charters, a team that misses performance standards reportedly has to sell its charter, with time given to do it.
Why did 23XI Racing and Front Row sue NASCAR?
They refused to sign the 2025-2031 charter agreement, mostly because charters were not permanent, and sued on antitrust grounds in October 2024. The case settled on December 11, 2025.
The Bottom Line
A charter is a reserved seat at every Cup race, and after the 2025 lawsuit it is a permanent one. That is why the price went from a few million dollars to $40 million, and why the 2027 story is about who can find one to buy.
More rules explainers: the 2026 Chase format and NASCAR post-race inspection.
Gear Up
Hamlin took the stand in the charter trial and still won races this year. Here is the gear from the people in this story.
- Denny Hamlin #11 2026 Back-to-Back Michigan Wins T-Shirt
- Denny Hamlin #11 2026 Vegas 61st Cup Win T-Shirt
- Jimmie Johnson Carvana 1:24 Elite Diecast
- Michael McDowell #71 Spire Motorsports 2026 T-Shirt
More in the race wins collection.
