Racers, Start Your Valuations
The 2024 NASCAR season has entered an interesting phase involving valuation and identity assessment in the sport's landscape.
The Sale of Stewart-Haas Racing
The recent announcement regarding the sale of Stewart-Haas Racing (SHR) did not come as a surprise to many in the industry. With co-owner Gene Haas shifting his focus towards Formula One and Tony Stewart growing increasingly discontented as a NASCAR team owner, the decision seemed almost inevitable.
Since becoming a charter member of NASCAR in 2016, SHR has accumulated four full-time car charters. These valuable assets have been put on the market as the team explores its future options. The past sales of NASCAR charters provide some context for the anticipated value of SHR's charters. For instance, Furniture Row Racing sold their charter for $6 million in 2018. More recently, 23XI Racing acquired StarCom Racing's charter for $21 million in 2021, and Spire Motorsports purchased one for approximately $40 million.
Industry insiders predict that SHR's charters will be sold for slightly less than $40 million each, with interest from existing teams looking to expand, such as Front Row Motorsports and Trackhouse Racing.
Television Revenue and Upcoming Negotiations
A significant factor in NASCAR's financial landscape is its television revenue. In November 2023, NASCAR secured a lucrative seven-year TV deal worth $7.7 billion. Currently, the teams receive 25% of this revenue, a figure that is central to ongoing negotiations.
With the current charter agreement set to expire on January 1, 2025, there is a push from teams to secure a larger share of TV revenue in the new agreement. The dynamics of these negotiations have led to speculation about the potential sale of NASCAR if agreements cannot be reached.
Leadership and Policy Concerns
The France family continues to lead NASCAR, with Jim France's tenure eliciting mixed reactions from within the industry. Some stakeholders have raised concerns about his approach to policy-making, especially considering the imminent deadline for new charter agreements on December 31.
NASCAR COO Steve O'Donnell has reassured the community that negotiations are "very close" to reaching a resolution, yet the atmosphere remains tense as teams and officials seek a satisfactory outcome.
Voices from the Industry
Several industry insiders have voiced their opinions on the current state of NASCAR and the charter negotiations:
"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," said one industry veteran.
Another insider highlighted the challenges of the current system, "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," warned another, reflecting on the complex leadership dynamics within NASCAR.
Adding to the debate, yet another commented, "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 implemented with the intention of providing financial stability to teams within NASCAR. As the sport navigates through these crucial negotiations, the community eagerly awaits the outcome, which will undeniably shape the future of NASCAR. The resolution of these issues—fair valuation of charters, fair distribution of television revenue, and effective leadership—will determine the trajectory for teams and the sport at large.