Racers, Start Your Valuations
The 2024 NASCAR season has entered an intriguing phase, marked by significant valuation exercises and identity assessments.
The announcement regarding the sale of Stewart-Haas Racing (SHR) did not come as a surprise to many. With Gene Haas shifting his focus towards Formula One and Tony Stewart expressing dissatisfaction as a NASCAR owner, the sale seemed almost inevitable.
SHR, a charter member of NASCAR since 2016, possesses four full-time car charters and has been actively shopping them around.
Over the years, NASCAR charters have seen varying valuations. Furniture Row Racing sold their charter for $6 million back in 2018. Fast forward to 2021, and 23XI Racing acquired StarCom Racing's charter for $21 million. Recently, Spire Motorsports secured one for approximately $40 million.
SHR’s charters, however, are expected to be sold for less than $40 million, with existing or expanding teams like Front Row and Trackhouse showing interest in acquiring them.
Television Revenue and Upcoming Negotiations
In November 2023, NASCAR announced a new seven-year TV deal worth an impressive $7.7 billion. Currently, teams receive 25% of the television revenue. However, the landscape is poised for change as the current charter agreement is set to expire on January 1, 2025, and teams are negotiating for a larger slice of the TV revenue pie.
There is widespread speculation that if agreements aren't reached, NASCAR might even be up for sale. Nevertheless, fans and stakeholders remain hopeful for a positive resolution.
Leadership and Policy Concerns
The France family continues to steer the NASCAR ship, but opinions about Jim France's tenure and his approach to policy-making are divided within the community. With the deadline for new charter agreements looming on December 31, NASCAR COO Steve O’Donnell has indicated that they are "very close" to reaching an agreement.
Various voices from the industry have expressed mixed feelings about the current state of affairs:
“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.”
“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?”
“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.”
“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 designed to provide financial stability to racers in the world of NASCAR. As negotiations progress, the NASCAR community is keenly awaiting the outcome, which will undeniably shape the future trajectory of the sport.