In 1938, Daytona Beach was in a bit of a dilemma.
The town had used the annual late winter speed trials to attract spectators and business for over 20 years. It helped keep money flowing through the local economy during the typically slow winter months.
But after 1935, the trials moved to the Bonneville Salt Flats in Utah, and the next year, the city decided to promote a car race across a rough three-mile oval. It was a horrible affair to watch; cars often got stuck in the ruts, and the race was flagged with three laps to go due to just how bad the turns had gotten. What’s worse is that thousands of fans were able to see the race without paying for a ticket, and the city lost over $20,000 on the event. The year after, in 1937, there was another race promoted by the local Elks Club, which also lost money.
In 1938, neither the city itself or the Elks Club wanted to try their hands at promoting another race. Instead, a new person stepped onto the scene. A recent transplant from Washington, DC — the local gas station owner had established himself as a fairly decent racer in his own right, having finished fifth in the first beach race in 1936. He had never tried to promote before, but was willing to take a stab at it..
From then on, only one person would regularly promote the semi-annual races at Daytona Beach: one “Big” Bill France.
On April 27, 2018, NASCAR announced the acquisition of ARCA. At the time, it seemed like a good thing for everybody involved in the move. For NASCAR, part of it was ego; after 80 years of promoting stock car racing, the France family could finally claim a complete monopoly among the national touring series.
For ARCA, their racing series gained instant credibility and a needed financial bedrock. The small sanctioning body had been the butt of many jokes over the years, having gained a terrible reputation between inexperienced drivers, ancient cars that look like they’ve been through wars, and let’s just say “colorful” team owners.
ARCA was not in good shape at all when they came under NASCAR’s rule, in spite of what some critics may say; its defending series champion had been reduced to the role of guest commentator at Daytona and his Racing Reference page looks pretty darn barren for 2018.
But just a week later, a much bigger story dropped that put things into even more perspective, and one that NASCAR did not want to have come out.
On May 7, Reuters dropped the bombshell that the France family were exploring options, “including the sale of a majority stake” of NASCAR, through a partnership they’ve made with Goldman Sachs. Reuters made sure to note that a deal was nowhere close to being done, and it might not even come about.
The next day, then-NASCAR President Brent Dewar announced to employees in a company-wide memo (as reported by the AP) that the France family “remains dedicated to the long term growth of our sport,” and that the sanctioning body doesn’t comment on “industry rumors.”
A sale of NASCAR obviously hasn’t happened yet as of press time. But even with Dewar and Brian France spending much of the proceeding three months reaffirming the family’s commitment to racing, some of the moves NASCAR made in the second half of the season definitely looked a little suspect in that regard.
And apparently Brian wasn’t that committed to racing, taking an indefinite leave of absence following a DUI arrest in August. That whole story and all of its ramifications is for another time and place, but Brian and subsequently Dewar being out of the equation hasn’t changed any of the whispers or rumors of a possible sale.
On November 9, NASCAR announced that they were bidding to buy out International Speedway Corporation and officially put both it and NASCAR under one roof. It always kind of was; the France family already own a controlling stake in ISC, with it being rumored for years that ISC president Lesa France Kennedy basically used Brian as a puppet in his role at NASCAR.
But now, with those pesky shareholders perhaps eventually being out of the loop, NASCAR will have a very varied portfolio for any potential buyers in the future. Not to mention that this came about a week after ISC announced that they were purchasing Racing Electronics, the company that provides extremely pricey scanners and FanVisons to fans at just about every relevant racetrack in the country.
That portfolio, if it does come up for sale, is going to come with a hefty price tag. Think about what buying NASCAR means in 2019 and beyond. If a company were to buy NASCAR, they would be buying:
- The three national touring series already operated by NASCAR.
- International series such as the Pinty’s Series in Canada or the PEAK Mexico Series, regional such as K&N and Whelen All-American, and even two video game based racing series.
- ARCA, which is kind of in the middle between the Truck Series and the regional series now.
- IMSA, the biggest Sports Car series in North America.
- Iowa Speedway, which is already owned lock, shock, and barrel by NASCAR.
- ISC assists, including RE, the Motor Racing Network, and 12 of the 23 racetracks that host NASCAR Cup Series races.
If a sale were to go through, this would instantly be the news story of the decade for motorsports in North America. If nothing happens, it’s still going to be very interesting to see what will happen with the schedule over the next few years and the never ending tug of war between the Frances and the Bruton Smith owned Speedway Motorsports Incorporated.
Looking ahead, however, it seems like an inevitability that the France family will attempt to get SMI into the fold. Maybe not now; they’re about to spend $1.9 billion to buy the rest of ISC. It’s unlikely they have the pure capital to get the Smiths to sell. But the idea of something that brings those eight tracks into the fold sounds like an absolute license to print money.
There are four distinct possibilities as to what could happen in 2019. One being that NASCAR is outright sold in the calendar year, but I doubt a sale could be completed by 2020. I’m no financial expert, but lawyers are generally paid by the hour, and typically the bigger the transaction, the more lawyers are needed to be there. And a sale of this side is a pretty big transaction that could take years to finalize.
The second is that something happens between the France family and SMI, whether it be a buyout or a merger between NASCAR and SMI. This would almost certainly require the government to step in and approve the sale, and who knows what could be happening there over the course of the next year judging from how the last two have gone.
The third is that NASCAR/ISC buys up Dover Motorsports Inc. and Pocono Raceway. I doubt this happens in the same timeline as them getting involved with SMI, as all of these tracks together would almost surely bring about an anti-trust lawsuit.
The final possibility is that nothing happens and this story dies as nobody steps up. NASCAR acquiring ISC also came at the same time as Jim France and Steve Phelps coming into the spotlight as the faces of the company, and Phelps, in particular, has strongly hinted at wanting to change up the schedule in 2020 and beyond. Getting the shareholders out of the way for 19 dates on the Cup schedule would be a pretty easy way to make that happen.
But when there’s a lot of smoke, there’s usually some kind of fire. And there’s still a lot of smoke. Just this week Liberty Media’s CEO told NBC News that he’d be interested if NASCAR is for sale. Regardless of what happens here, the fact that sale talks have gotten far enough to involve a major financial institution like Goldman Sachs speaks volumes on just where the sport has gone.
In the face of declining ratings, lowering track attendance, and many of the sport’s most popular drivers retiring, the idea that the France family is even considering getting out instead of braving the storm speaks volumes. But if they can walk away with billions upon billions of dollars, and still with a minority stake in the company, it might be the most beneficial for them to do just that.
One could only imagine what the elder France would think. Considering this is a man who once claimed that he would plant corn in the infield at Daytona if a driver union were formed, he wouldn’t be able to take being a minority owner without controlling interest. At the same time, France was a great businessman, getting the land that would become Talladega Superspeedway for reportedly pennies on the dollar.
Obviously, the best time to sell NASCAR was when it was at its absolute peak in 2007, instead of where it is in 2018. But with the live sports TV rights bubble not showing any signs of bursting, now might be the best overall time to sell. The UFC was just bought last year for $4 billion, something a combined NASCAR-ISC-SMI effort could easily dwarf. Not only that, but even with declining ratings, the UFC just signed a massive new TV contract with ESPN.
Another part of all of this is the possibility of a streaming service in the future. NASCAR has been rumored to be interested in starting a streaming service ala the WWE Network. The idea is that, if NASCAR can get their base of about a million people to spend $10-$15 a month, that’s well over $100 million in additional revenue. Granted, there would be a lot in start-up costs and possibly rights fees they could miss out on (like losing MAV TV if they were to move ARCA races to the network).
What the possibility of a new owner means for fans or the sport in general is almost impossible to tell. Who knows what an outside company may do with NASCAR. They could try to go back to the pre-2004 era to recapture the magic of old NASCAR, but they could also go all-out with trying to attract younger, more impatient fans with wildly different rules and race structures.
The France family empire has ensured that there’s no real historical reference for this, and the reality is that nobody has been able to promote/sanction a major stock car racing series on a consistent basis in the past 80 years besides the Frances.