NASCAR, the American auto-racing sanctioning and operating company, is reportedly considering a ban on investments in team charters from sovereign wealth funds amid negotiating charter agreements with its teams.
NASCAR, the National Association for Stock Car Auto Racing, issues 36 charters, which guarantee a team’s placement into races; underperforming teams can have their charters revoked. Front Row Motorsports in May reported that it bought a charter to expand its team. It did not disclose the purchase price. Another charter was sold for between $20 million and $25 million, according to published reports.
The charter negotiations, which are not finalized, can include clauses on private equity stakes in teams, including maximum stakes that funds could take in teams.
Institutional investors, including sovereign wealth funds, have increasingly purchased stakes in sports teams and leagues. The $925 billion Saudi Public Investment Fund owns stakes in several sports ventures through its subsidiary SRJ Sports Investments. It also owns sports leagues such as LIV Golf and the Saudi Pro League and owns an 80% stake in the Premier League’s Newcastle United Football Club through a controversial takeover.
The Qatar Investment Authority purchased a 5% stake in Monumental Sports & Entertainment, the parent company of a number of Washington. D.C.-based sports teams including the NHL’s Washington Capitals, the NBA’s Washington Wizards and the WNBA’s Washington Mystics.
The rumored ban on SWFs investing in NASCAR would not be the first such ban. The U.S.’s National Women’s Soccer League excluded ownership stakes from sovereign wealth funds in new rules codified in March.
Sovereign wealth fund ownership stakes in sports leagues, specifically from funds from the Gulf states have been controversial, with some accusing these funds of sportswashing, or using their ownership in these leagues to redirect public attention from human rights issues in these countries.
While institutional sovereign capital is flowing into sports, private equity ownership in sports is ubiquitous. PE funds have ownership stakes in several NASCAR teams, and PE ownership is widespread across almost all sports leagues.
A spokesperson for NASCAR did not respond to requests for comment.
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Tags: NASCAR, Qatar Investment Authority, Saudi Public Investment Fund, sovereign wealth funds, sports, SWFs
