Racers, Start Your Valuations
The 2024 NASCAR season has entered a fascinating phase involving valuation and identity assessment.
The Sale of Stewart-Haas Racing
The sale announcement of Stewart-Haas Racing (SHR) wasn’t a shock to many. With Gene Haas focusing on Formula One and Tony Stewart apparently discontented with his role as a NASCAR owner, the writing was already on the wall for some insiders.
As a charter member of NASCAR since 2016, SHR holds four full-time car charters and has been actively shopping them around. Historical sales provide some context: in 2018, Furniture Row Racing sold their charter for $6 million. Fast forward to 2021, and 23XI Racing purchased StarCom Racing’s charter for $21 million. Most recently, Spire Motorsports acquired a charter for a whooping $40 million.
Industry experts predict that SHR’s charters will be sold below the $40 million mark, potentially to existing or expanding teams. Front Row Motorsports and Trackhouse Racing are reportedly among the interested parties.
Television Revenue and Upcoming Negotiations
In November 2023, NASCAR announced a new seven-year TV deal valued at $7.7 billion. Under the current agreement, teams receive 25% of the television revenue.
However, the charter agreement, which dictates how this revenue is distributed, will expire on January 1, 2025. As a result, negotiations are ongoing to secure a larger share of the TV revenue for the teams. Some speculate that failure to reach an agreement might prompt the sale of NASCAR itself.
Leadership and Policy Concerns
The France family continues to lead NASCAR, though opinions remain divided over Jim France’s policies and leadership approach. The clock is ticking towards the December 31 deadline for new charter agreements. NASCAR COO Steve O'Donnell has indicated that the parties involved are "very close" to reaching a resolution.
Voices from the Industry
The atmosphere in the industry is charged with anticipation and apprehension. One insider commented, “Charter truth is going to be out there now. Feelings are going to get hurt. Because no one actually wants to hear what they’re really worth. Unless you’re Jeff Bezos, it’s never as much as you think.”
Drawing a parallel to other major sports leagues, another expert noted, “Imagine if the owners of the Kansas City Chiefs or the Charlotte Hornets had to renegotiate with the NFL or the NBA every seven years. That’s crazy, right?”
One sentiment that resonates across the board is the necessity of mutual support. “We can only support you as long as we are being supported. Be careful what you wish for, because this is Bill Junior’s brother, after all,” cautioned one prominent voice in the industry.
Referring to NASCAR’s leadership, a veteran insider reflected, “None of us were happy with Brian in charge, and we used to say, what would it be like if Jim stepped in?”
Conclusion: The Future of NASCAR
The charter system was initially designed to provide financial stability to racing teams. As negotiations for new agreements continue, the entire NASCAR community keenly awaits the outcome, hoping for a future where both the sport and its teams can thrive financially.