NASCAR Hires Goldman Sachs to Explore Sale
The France family, majority owners of NASCAR, has hired Goldman Sachs Group to “identify a potential deal for the company”, including the sanctioning body. An aging fan base (58, only golf, tennis and horse racing older), depressed race-day attendance (ISCA reported -1.6% YoY decline in ‘17), steadily declining TV ratings (9/10 races this season have fallen to all-time or decade-plus lows) and minimal “star-power” (see: Dale Jr. retirement) have raised concerns about sport’s long-term viability, which may explain why the France family is looking to sell after 70 years. No valuation has been established for NASCAR, though the company is expected to fetch several billion dollars; for reference purposes, Liberty Media Corp. acquired Formula One (FWONA) for $8 billion+ (included assumed debt, though no tracks were included) in Jan. ‘17. Sources have cautioned that talks remain in the exploratory stage and that no deal is imminent.
Howie Long-Short: NASCAR television ratings are down from their mid-2000 heyday, but it’s important to consider that the sport continues to put up impressive viewership numbers on Sunday afternoons. The spring race at Talladega last week saw TV viewership decline 20% YoY and it still drew 4.7 million viewers. It also must be noted that NASCAR has finished as the No. 1 or No. 2 sport (in terms of consumption) during 8 of the first 10 weekends of the ’18 season.
The France family is reportedly looking to sell a “majority stake” in the company. In addition to the Cup Series, NASCAR operates the Xfinity Series (2nd tier), Camping World Truck Series (3rd tier) and recently acquired ARCA (low-level stock car racing, will take over operations in ’20). The family also controls roughly 1/3 International Speedway Corporation (ISCA) shares. ISCA owns and operates 12/23 NASCAR Series tracks, which host 19 of 36 races on the MENCS schedule; including the Daytona 500. Sports Business Journal indicated that NASCAR executives expect the company (with tracks included), to draw offers between $3-5 billion.
I asked Dan Cohen, Octagon SVP, Global Media Rights Consulting Division who he thought might be interested in acquiring the stock car racing circuit?
Dan: Media companies looking at locking in live sports rights and programming around a well-established brand. Comcast, Disney, Liberty, ATT/Turner and Discovery are all possibilities. Also, complimentary auto racing businesses (think: Hulman/Indycar, TPG/IHRA) that would see consolidation as a strategic and immediate means of growing enterprise value.
Fan Marino: Those who say NASCAR needs a new “face of the sport” (to take over for Dale Jr.), should consider Kevin Harvick. Harvick won a rain-interrupted race at Dover on Sunday, his 4th checkered flag of the season (11 races, 8 Top 5 finishes). He led 201 of the 400 laps at the Monster Mile, taking a lead he would not relinquish with 62 laps to go. The win was the 41st of Harvick’s career, placing him 18th all-time. Only Kyle Busch (46) and Jimmie Johnson (83) have more amongst active drivers. Check out what Harvick did for his fans, before the race; there is no better ambassador within the sport.
Looking for a fresh face? There are several to choose from. 7 of the Top 15 best-selling drivers at retail (i.e. the track) are under the age of 30 and sales of their merchandise is up 74% YoY.
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