An idea once considered preposterous now appears to be a realistic possibility: the France family is exploring selling NASCAR, going so far as to meet with investment bank Goldman Sachs, according to multiple published reports.
The France family founded NASCAR shortly after World War II and through iron-fisted leadership, a broad vision and unwavering determination they fostered NASCAR’s growth from a regional stock car series into a national phenomenon. The popularity was such it once received $75 million annually in entitlement sponsorship money, generated television ratings rivaling the NFL, and saw tracks routinely packed with 100,000-plus fans, giving credence that NASCAR would soon ascend to the top of the sports hierarchy.
Those halcyon days are now long gone. Television ratings continue to freefall to where record-lows occur on a near-weekly basis, the three publicly traded companies that host NASCAR races have all reported sharp drops in attendance, and a host of high-profile sponsors have either scaled back involvement or completely pulled out.
Without a doubt NASCAR finds itself at a crossroads, and for the first time, the direction it heads next could be determined by someone outside the France family.
It is not a foregone conclusion that NASCAR co-owners Jim France, the one surviving son of NASCAR founder Bill France Sr., and Lesa France Kennedy, the granddaughter of France Sr. and daughter of Bill France Jr., who ran the sport from 1972-2000, will sell a portion of their 100 percent ownership stake or divest themselves completely.
Recent events could merely be an act of due diligence in assessing what the company is worth, considering that their vast holdings include NASCAR’s three national divisions – the Cup, Xfinity and Truck Series – assorted regional tours, the recently-acquired Automobile Racing Club of America (ARCA) Series, the IMSA sports car series, and various tracks.
But enough smoke is billowing to suggest that this is something more, and the Frances are at least contemplating handing over the reins to a non-family member for the first time in NASCAR’s 70-year existence – a changeover that could benefit all involved.
“When you look at the trend lines for the sport, the current path is unsustainable,” Ramsey Poston, president of strategic communications ﬁrm Tuckahoe Strategies and a former NASCAR executive, told RACER. “Something different has got to be done with the sport.”
Whenever the question has arisen of whether the Frances would ever consider selling NASCAR, they’ve steadfastly expressed their commitment that the company would remain within the family. But amid a downturn that began in 2006, the writing is on the wall that new leadership is necessary for big-time stock car racing to retain a viable place in the sport’s landscape.
Tough decisions need to be made, and while the loyalty the Frances have shown to their longtime partners is admirable – especially pertaining to which tracks host Cup Series races – those ties may in fact be preventing the seismic shakeup needed to spark a rejuvenation. Perhaps unwilling to cut those bonds themselves, the Frances recognize that now is the time to let someone else dictate NASCAR’s future.
“There are some things that are done that have ‘always been done that way’ that maybe we can look at,” defending Cup Series champion Martin Truex Jr. said. “There’s definitely some opportunities for some things to change to help the sport, help the teams, help the drivers and help in general for everyone to be more healthy.”
Although on the surface the evidence suggests it is a less than ideal time to sell NASCAR due to the score of problems it is facing, a deeper examination indicates otherwise. An upcoming succession of monumental hurdles provides a potential buyer an enticing proposition where they have the opportunity to shape the sport as they best see fit.
In 2020, the Cup Series will need an entitlement sponsor to replace Monster Energy. That same year, NASCAR’s sanctioning agreement with its 23 tracks, and the charter agreement with its teams, also expire. And roughly around this time, NASCAR will have to open negotiations with Fox Sports and NBC Sports about its current television contracts that run through the 2024 season.
“2024 is coming in a hurry,” Poston said. “Every day that you get closer to the conclusion of that network TV contract, your bargaining hand potentially gets weaker. When you look at how difficult it has been to sell a title sponsor and now team sponsors, it’s better to act sooner than later.”
As these milestones in NASCAR’s contracts pertaining to sponsorship, tracks, teams and television approach, the timeline parallels a realization that the sport’s appeal to fans needs to be addressed.
“NASCAR’s decline over the years has been linked to many of the same issues facing all others running sports leagues or organizations, namely that consumption patterns are changing quickly, whether these be at-home or trackside,” David Carter, executive director of the University of Southern California’s Marshall Sports Business Institute, told RACER. “Led by millennials, fans are demanding that their favorite sports rapidly cater to their needs.”
Were a buyer to determine that the bloated 36-race Cup Series schedule needs trimming and a long overdue realignment of some dates – less races on intermediate speedways, a greater number of road courses and short tracks –- in order to cater to and re-engage disenfranchised fans, it would essentially have a blank slate upon which to do so. This gives the Frances some leverage in setting an asking price certainly north of $1 billion, but likely lower than the $4.6 billion Liberty Media paid to acquire Formula 1 in 2016, according to investment analysts RACER spoke with.
“There are likely potential owners surfacing that believe they can better address attendance woes and lagging TV ratings, especially suitors that can find additional and incremental ways to monetize the sport via emerging media platforms,” Carter said.
Because of the costs involved, only a select few have the necessary capital to pull off a deal. The most bandied-about name is Comcast, which not only sponsors NASCAR’s second-tier series, but is also the parent company of NBC Sports, which broadcasts 20 Cup Series races each season. Such interest further makes sense considering the telecommunications company needs inventory to program on NBC and NBCSN, and it is not far-fetched to think that instead of paying NASCAR $4.4 billion over 10 years for television rights, Comcast elects to cut a check for the whole pie.
Another conceivable scenario could involve the Frances taking on a partner: someone from the outside with fresh ideas, and who can maybe mitigate the numerous challenges related to television viewership while still allowing the family to maintain a controlling interest and have the final say.
There are a lot more questions than definitive answers at this point, though it is clear that major changes are on the horizon. And those changes may well include who charts NASCAR’s course through a turbulent present and an uncertain future.