Explaining the Spire purchase of Furniture Row’s charter

Earlier this week, Spire Sports + Entertainment — a North Carolina-based agency — acknowledged it had purchased the No. 78 team’s charter from Furniture Row Racing and will be starting a race team.

Given the complexity of this situation, there are many questions floating around about what’s going on and what it might mean. Here’s an attempt to anticipate some of the questions and answer them.

Q: Did Spire buy Furniture Row Racing?

A: No. That’s not how this works. Spire bought the charter, which is like a franchise.

Q: I’ve never heard of Spire. Who are these people?

A: Race fans may not have heard of Spire, but every key player in the NASCAR garage has dealt with them. Founded by Jeff Dickerson (former Kyle Busch agent and spotter) and T.J. Puchyr (who formerly ran Braun Racing and Turner Motorsports), the agency now has 25 employees — including company president Ty Norris, who formerly held major roles at Michael Waltrip Racing and Dale Earnhardt Inc. It’s a mostly behind-the-scenes operation, but Spire has been pulling a lot of strings in the NASCAR world since 2010.

Q: OK, so they have racing people working for them. I still don’t get what Spire does.

A: Spire was originally intended to be a driver representation company, and that remains a big part of the business (Kyle Larson and James Hinchcliffe are among the clients). They handle things like contract negotiations and driver brands, for example. But over the years, Spire has expanded into also representing sponsors (5-Hour Energy, DC Solar, Brandt among them) and even working closely with race teams (Hendrick Motorsports, Chip Ganassi Racing) and manufacturers (Toyota). Their client portfolio even includes a racetrack (Knoxville Raceway).

Q: Whoa, whoa, whoa. You’re telling me one company is negotiating on behalf of drivers, sponsors AND teams? Conflict of interest much?

A: It might sound crazy, but the company doesn’t shy away from it (this despite being named in the Brennan Poole lawsuit over the summer). I asked Dickerson, the CEO, in an interview this week about the appearance of conflict.

“These are the waters we navigate every day,” he said. “We certainly do not hide from anybody what we do. We’re not blind to the appearances and we will work with all of our clients to make them comfortable on what the priority is.”

And what’s the priority? The agency will remain the priority over the race team, he said.

Q: Uh, what? So why did the agency buy a charter to start a race team then?

A: Remember I mentioned how Spire has race teams among its partners? One of those was Furniture Row Racing, and Puchyr, the Spire co-founder, had developed a close relationship with Barney Visser and Joe Garone. In the process of shopping the charter, Visser floated the idea of Puchyr and Dickerson buying it themselves. At the same time, Spire had been looking for something big to make a statement to the industry and potential sponsors —  and a way to have something concrete for their own employees in a volatile business, which sometimes leaves them chasing commissions.

The Spire guys decided to take the leap. The deal was agreed to in September, although Visser couldn’t officially sell the charter until after the season.

“Beachfront property like this doesn’t come available very often and we’re here to do big things,” Dickerson said. “We think this purchase checks a lot of boxes on the messages that TJ and I are trying to send.”

Q: Can’t someone send a message without risking millions of dollars? And how can an agency possibly afford this?

A: Dickerson sees owning a race team in helping several different areas. For example: When his sales people go into a meeting with a potential client who has questions about the health of the sport, they can now point to this investment as proof they truly believe in racing’s future. Spire is essentially backing up its talk by putting money on the table while showing that it’s not going anywhere.

As for the expense, the 78’s charter was more valuable than others because weekly payouts from races are now based in large part on how a team has performed in the last three seasons. In Furniture Row’s case, it was 11th, first and second in the points. That means the checks from NASCAR after each race should help in repaying whatever loans Spire likely took out to obtain the charter.

Q: Oh, so is it a money grab? They’re just going to run a car and get the check?

Dickerson insists this is a long-term play and the team isn’t looking to just flip the charter. He scoffs at those who would suggest anyone is making big bucks in today’s ownership climate.

“It’s different when it’s your butt writing that check and taking that risk,” he said. “This is a significant risk for us that we hope pays off.”

Q: OK, but what about the race team? Who is the driver? Where are they getting cars from? Are they going to be competitive?

A: The team is going to be called Spire Motorsports, and it will run a No. 77 Chevrolet. Those are all the details that have been confirmed at this time. Given Spire’s connections to Hendrick and Ganassi, you could probably guess they’ll end up in some sort of technical alliance with one of them in order to make the team function. (Update: The team will be leasing space in the Premium Motorsports shop and have a partnership — at least on some level — with Premium. However, Premium isn’t running the team.)

It’s hard to predict whether the team will be competitive until we know more about the plans to hire a driver (or drivers), a crew chief, crew, etc.

Q: I’m sorry, but just back up for one more minute. You’re telling me an agency that does business with Toyota is going to run Chevrolets? An agency that negotiates driver contracts and sponsorships with race teams is now going to race against some of the very drivers and sponsors it represents?

A: I asked Dickerson what all his company’s various partners thought of Spire starting a team. He said they were all consulted and gave their support.

“It’s just racing, man,” he said. “We all have raced for a long time and we’ve raced against our friends and our family. I think for three hours on Sunday we can figure it out.”