- Nascar has been privately owned by France family since 1948
- First public confirmation that series could be open to external investment
- BlackBook Motorsport understands that all options are being considered but nothing is set in stone
Nascar is exploring opportunities around private equity investment, according to the series’ president Steve Phelps.
Speaking to Sports Business Journal (SBJ), Phelps revealed that external investment is under consideration, especially given the series’ plans to pursue global expansion.
Nascar will host the first points-paying race outside of the US in Nascar history at the Autódromo Hermanos Rodriguez in Mexico later this year, but the series does not want to stop there.
“We are absolutely looking at [accepting a private equity investment], and I think it’s smart for us to do that,” Phelps told SBJ.
“Whether anything will happen there I don’t know, but we need to be smart about how we’re going to grow globally, and right now we’re doing it kind of one country at a time and doing it through grassroots racing and bringing a race to Mexico.
“We’re on the right path, but in my opinion, we need to accelerate that and that’s something that we’re looking at hard.”
BlackBook Motorsport understands that Nascar is evaluating all available options in the pursuit of future growth, but nothing is set in stone at this stage.
Nascar is privately owned by the France family since being founded in 1948, but this is the first public confirmation that the series is open to the possibility of selling a stake. Reuters reported in 2018 that Nascar hired Goldman Sachs to explore a potential sale.
Having previously had a guarded attitude towards private equity investment, sport – including motor racing – has now embraced institutional investment. Indeed, Nascar outfit Trackhouse Racing welcomed investment from Marc Lasry’s Avenue Sports Fund last July.
Other teams with external investment include Legacy Motor Club, Richard Childress Racing, Joe Gibbs Racing, and RFK Racing, but the series itself has steered clear from similar deals so far.
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BlackBook says…
While any talk around private equity investment in Nascar is in the very early stages, Phelps’ comments reveal the shifting mentality of the series. The remarks also come at a time when the private ownership of Nascar is being called into question by the lawsuit involving 23XI Racing and Front Row Motorsports around the series’ alleged monopolistic practices.
Losing this lawsuit would come at great financial cost for Nascar as teams would secure greater percentages of overall revenues, so sounding out potential future investment makes a lot of sense in this context.
The logistics around staging international races are complicated enough for US-based Nascar and it is unclear whether the series has the capabilities to deliver multiple annual events even without the ongoing court action in the background.
There is also the argument that Nascar needs to double down on its strongholds in the US rather than looking to new markets. Pursuing the latter could draw unfavourable comparisons with the more globally established Formula One.
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