Racers, Start Your Valuations
The 2024 NASCAR season has entered an intriguing phase with significant focus on valuation and identity assessment. Central to this development is the announced sale of Stewart-Haas Racing (SHR), a move that, while not unexpected, sends ripples through the racing community.
The Stewart-Haas Racing Sale
Co-owned by Gene Haas and Tony Stewart, SHR has been a charter member of NASCAR since 2016. Gene Haas has increasingly shifted his focus to Formula One, while Tony Stewart has grown disillusioned with his NASCAR ownership role. This dual scenario has led SHR to consider selling its four full-time car charters.
To provide context, Furniture Row Racing sold its charter for $6 million in 2018. A few years later, in 2021, 23XI Racing bought StarCom Racing's charter for $21 million. Most recently, Spire Motorsports purchased a charter for around $40 million. In light of these transactions, SHR's charters are anticipated to sell for a figure below $40 million, with established teams like Front Row and Trackhouse showing interest.
Television Revenue and Upcoming Negotiations
The financial landscape of NASCAR has been bolstered by a new seven-year TV deal valued at $7.7 billion, announced in November 2023. This deal currently allocates 25% of the revenue to the teams. However, the existing charter agreement is set to expire on January 1, 2025, prompting ongoing negotiations for a more substantial revenue share for the teams.
Rumors abound regarding NASCAR's potential sale if these negotiations do not reach a favorable conclusion. The uncertainty adds a layer of complexity to an already tense bargaining scenario.
Leadership and Policy Concerns
Leadership within NASCAR remains a point of divided opinion. The France family continues to lead the organization, with Jim France at the helm. Opinions are mixed on his tenure and policy-making style. As the December 31 deadline for new charter agreements approaches, NASCAR COO Steve O'Donnell has indicated that negotiations are "very close" to a resolution.
Industry insiders have voiced varying perspectives on the situation:
"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 originally designed to support racers financially. As the negotiations continue, the NASCAR community watches with bated breath, wondering how these discussions will shape the future of the sport.
Will the existing teams secure a more significant portion of the lucrative TV deal, or will the looming threat of a potential sale destabilize the landscape further? As these crucial negotiations draw to a close, the answers will provide direction for an organization at a pivotal crossroads.