Racers, Start Your Valuations
The 2024 NASCAR season has entered an intriguing phase involving valuation and identity assessment. With the recent announcement of the sale of Stewart-Haas Racing (SHR), the landscape of NASCAR racing is poised for significant changes.
SHR Sale: A Foreseen Development
The news of Stewart-Haas Racing's sale was not entirely unexpected. Gene Haas, one of the principal owners, has been dedicating more time and resources to his Formula One endeavors. Meanwhile, Tony Stewart, the other co-owner, has expressed his dissatisfaction with being a NASCAR owner for some time now.
As a charter member of NASCAR since 2016, SHR holds four full-time car charters. These charters are now up for sale, attracting considerable interest from the NASCAR community.
Historic Sales: Furniture Row to Spire Motorsports
History provides some context on recent charter sales. In 2018, Furniture Row Racing sold its charter for $6 million. Fast forward to 2021, 23XI Racing acquired StarCom Racing's charter for a significant $21 million. The most noteworthy transaction came recently when Spire Motorsports purchased one for around $40 million.
With these precedents in mind, SHR's charters are anticipated to sell for amounts below the $40 million mark. Among those showing interest are existing or expanding teams such as Front Row Motorsports and Trackhouse Racing.
Television Revenue and Upcoming Negotiations
NASCAR's financial landscape is also experiencing changes. In November 2023, a new seven-year TV deal worth $7.7 billion was announced. Currently, teams receive 25% of this revenue.
This distribution framework is under scrutiny as the existing charter agreement is set to expire on January 1, 2025. Teams are pushing for a larger share of TV revenue, and negotiations are in full swing. There is even some speculation about a possible sale of NASCAR itself if an agreement can't be reached.
Leadership and Policy Concerns
The France family continues to lead NASCAR, with divided opinions regarding Jim France's tenure and policy-making approach. Some within the industry believe Jim France's leadership has brought stability, while others view it as overly conservative.
The deadline for new charter agreements is looming, with December 31 set as the cut-off. According to NASCAR COO Steve O'Donnell, the parties involved are "very close" to reaching a consensus.
Voices from the Industry
The business side of NASCAR has always been a topic of heated discussion:
"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 adds, "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," warns another insider.
Finally, someone notes, "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 originally designed to provide financial stability for racers. As negotiations continue, the NASCAR community sits in anticipation of the outcomes that will shape the future of the sport.
With major sales, ongoing discussions about revenue sharing, and leadership dynamics at play, the 2024 NASCAR season promises to be one of transformation and redefinition.