The Live Fast charter was purchased by Spire Motorsports
Want to get into professional sports as an owner?
If the answer to that question is yes then you better have a major source of revenue backing that desire because it takes what for the vast majority of us would be unthinkable amounts of money to get involved with an NFL, NBA or MLB franchise. By the time a potential owner acquired a franchise in one of those sports then began paying salaries of players, coaches and management, the cost would run well into the billions of dollars.
NFL teams appear to come with the highest valuations among the sports that dominate the United States.
According to a story recently published on CBSsports.com, the NFL’s Dallas Cowboys are valued at more than $9 billion with the New York Giants ranking second with an estimated worth of $7 billion. That posting states that each of the 32 franchises increased in value by significant amounts over the past year.
If the NFL is too rich for your blood, there aren’t very many cheaper alternatives in the stick-and-ball world.
The NBA isn’t far behind pro football as NBCsports points out that every one of that league’s 30 teams is valued at more than $1 billion with the Golden State Warriors leading the way at just over $7.5 billion.
Maybe owning a baseball franchise would be a more affordable option, but that mostly depends on your definition of affordable.
A story published by Forbes.com earlier this year indicates that the average valuation of Major League Baseball teams is up by 12% over last year. The New York Mets were purchased in 2022 by Steve Cohen for $2.42 billion which is believed to be a record amount within the sport.
So with all of that taken into account, how much would it cost to get heavily involved in NASCAR? Well, it’s still a lot, but compared to other sports it’s not as expensive.
In a recent story run by TheAthletic.com it was reported that Live Fast Motorsports has sold its charter for the No. 78 team to Spire Motorsports for an unprecedented $40 million. Spire currently fields the No. 7 car for Corey LaJoie and the No. 77 machine for Ty Dillon. Almost immediately afterwards, it was announced that Spire, in a partnership arrangement with Trackhouse Racing, will have Zane Smith behind the wheel of that newly created NASCAR Cup Series ride.
Keep in mind that Spire paid that amount for the charter, which is an ownership guarantee of making every race as well a cut of the sport’s revenue sources such as television rights and sponsorships. Spire still has to purchase the equipment and hire the personnel necessary for competing on the NASCAR Cup Series. Buying the charter, even at the amount that was reportedly paid, was just the tip of the iceberg in terms of fielding a competitive car week after week.
A team can race without a charter but with no guarantees of entry into race fields. But just in case anyone had any idea that a startup team working out of a small shop in the way the Elliotts did back in the 1980s, the sale of this charter forever put that notion to rest.
While it might seem as though a wealthy person would be better off to invest in racing, there is much more to it than simply buying a charter. But now that the Spire-Live Fast transaction has occurred, it is almost certain that the price just rose significantly for any organization that might have been considering a sale.
So why give that much just for a charter?
NASCAR is approaching the end of its current television rights contracts. The belief is that the new deals will include much more than simply selling the rights to a network or networks to air the races. Streaming has now become a major part of sports broadcasting with whole new revenue streams being opened up with that. In some way, the chartered teams are likely to get some piece of that income.
Managed efficiently and creatively, streaming could be every bit if not more valuable in the future than the traditional broadcasting rights. We might come to realize in a few years that Spire got a bargain with its recent purchase.
Of course there is a difference between owning a NASCAR operation opposed to a team in one of the other sports. MLB, NBA and NFL valuations are influenced by numerous factors such as the team’s place in the history of the sport, geography, television revenues, ticket sales, stadium values, concession revenues and more.
NASCAR teams don’t own stadiums or earn concession revenues or sell tickets so those things are not figured into their worth.
Yes, this is a comparison of apples to oranges here, or maybe even apples to prime rib. But NASCAR valuations are most definitely on the rise. The point of this is to show that the amount of money it takes to get into racing is no where close to what it takes to become an owner of a team in other sports. However, Spire’s purchase of the Live Fast charter at many times the value previously paid for the right to join the sport indicates that ownership is very much intended for the richest individuals in our society or for investment opportunists.
It’s very much a rich person’s game more so than ever before.
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