Racers, Start Your Valuations
The 2024 NASCAR season has entered a fascinating phase marked by intricate valuation and identity assessments.
The announcement regarding the sale of Stewart-Haas Racing (SHR) did not come as a shock. Gene Haas has shifted his focus to Formula One, while Tony Stewart has expressed dissatisfaction in his role as a NASCAR owner.
As a charter member of NASCAR since 2016, SHR boasts ownership of four full-time car charters and has actively been seeking buyers.
To provide context, Furniture Row Racing sold their charter for $6 million in 2018. In contrast, 23XI Racing acquired StarCom Racing's charter for $21 million in 2021. More recently, Spire Motorsports made a purchase for a staggering $40 million.
SHR’s charters are anticipated to sell for slightly less than $40 million. Existing or expanding teams, including Front Row and Trackhouse Racing, have shown a keen interest.
Television Revenue and Upcoming Negotiations
In November 2023, NASCAR announced a lucrative seven-year TV deal valued at $7.7 billion. Under the current agreement, teams receive 25% of the television revenue.
However, this deal is set to expire on January 1, 2025, and the ongoing negotiations aim to secure a larger slice of TV revenue for the teams. Speculations are rife that NASCAR could consider selling the organization if these negotiations do not lead to a satisfactory resolution.
Leadership and Policy Concerns
The France family continues to helm NASCAR, but opinions are divided regarding the tenure and policy-making approach of Jim France.
With the deadline for new charter agreements looming on December 31, NASCAR COO Steve O'Donnell has expressed confidence, stating that they are "very close" to reaching an agreement.
Voices from the Industry
Industry insiders have not held back their opinions regarding the valuations and the ongoing negotiations. One insider remarked,
"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."
Another voice from the industry highlighted the instability of constantly renegotiating deals:
"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?"
Highlighting the delicate balancing act between support and autonomy, one stakeholder said,
"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."
Lastly, there are reflections on past leadership:
"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 racers. As the negotiations unfold, the NASCAR community eagerly awaits the outcomes that will shape the future trajectory of the sport. The stakes are high, and the decisions made in the coming months will likely have long-lasting impacts on teams, owners, and the broader NASCAR landscape.