Report: NASCAR considering landmark decision on foreign wealth funds in new charter agreement

As the playoffs approach, teams are still engaged in talks with NASCAR over the next charter agreement, and what it will look like. There is now a new wrinkle that has been reported that would outline rules regarding private equity investments, and possibly banning sovereign investment funds completely.

A new report from Adam Stern of Sports Business Journal claims that NASCAR has added new provisions to the ongoing charter negotiations regarding private equity. There are already private equity investors in the sport. Joe Gibbs Racing to Trackhouse to RFK – they all have some kind of private equity investment.

That isn’t the most surprising nugget from Stern. NASCAR is looking to ban sovereign wealth funds. Like the one that helped create LIV Golf from Saudi Arabia.

“NASCAR is negotiating a new charter agreement with teams and — showing how active the private equity sector is — drafts include rules for such investments,” Stern wrote. “The guidelines could include a ban on sovereign wealth funds in NASCAR, a maximum percentage that a fund can acquire and language pertaining to who the main governing partner — or control person — can be.”

Stern noted that NASCAR has declined to comment. He also notes in his report that the negotiations are always changing. So, there is a chance that these provisions are done away with.

When it comes to investing in sports, the market is oversaturated in many areas. The NBA, NFL, MLB – it takes billions to be an owner in most cases. However, a NASCAR charter goes for roughly $25-$40 million a piece. A bargain in professional sports.

So, NASCAR has to be proactive. There are pros and cons to private equity and foreign investments. Ultimately, it feels like a good move to ban investments from such groups.

NASCAR charter agreement up in the air

While we have heard many reports about the NASCAR charter negotiations, it feels like an agreement is far away. Remember, there were rumors that NASCAR and teams wanted this done before the Daytona 500 this February. That came and went and it’s been up in the air ever since.

We know how many team owners feel. Denny Hamlin and Brad Keselowski are driver-owners who speak their minds. Teams want more money, they want to work closer with NASCAR on marketing deals, and they want to have stability.

Meanwhile, NASCAR wants to keep things more or less the same. A few rules and measures added here and there to keep everything running smoothly, but ultimately, keep the revenue sharing the same. Business as usual.

With teams and the governing body being at odds with one another, it’s hard to tell what will happen. However, we have racing back this week, and that is worth being thankful for.