Monday, July 02, 2007

NASCAR teams worth less than other sports teams

Forbes has estimated the values of NASCAR teams. They run cheaper than in other sports, averaging about 10x operating income. The NHL averages around 43, for instance.

I suspect they're cheaper because they're not as much fun to own. But I have no evidence or argument to support that.

My comments about team ownership in other sports are here.

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At Monday, July 02, 2007 12:48:00 PM, Blogger Brian Burke said...

For one thing, there's no home stadium or arena. The owner doesn't have a regular luxury box to impress his rich friends night after night.

At Monday, July 02, 2007 12:52:00 PM, Blogger Phil Birnbaum said...

Yes indeed, good catch! Not just the stadium ... there's little link between the owner and the city he lives in, which means he won't be a celebrity like even the crappiest MLB owner.

I think you nailed it.

At Monday, July 02, 2007 5:19:00 PM, Blogger Unknown said...

The way that revenue (and profit) is dispersed in motor racing tends to be radically different to, say, baseball. I can't speak for Nascar but in F1, for instance, F1 makes a ton of money at the expense of the teams ... the teams have fought back in recent weeks but they have few assets, except for team brand. It is a completely different business, with different economic drivers (in F1, at least, to drive auto sales) so it isn't suprising that values diverge from other sports.

It is worth pointing out that Forbes (lack of) rigor in doing baseball valuation must cast doubt on these and other valuations.


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