In racing, costs can add up rapidly, and although it is not always openly acknowledged, Dale Earnhardt Jr., who runs JR Motorsports, spoke honestly about the financial realities of the sport.

“Running a race car at the Cup level is not a mega profitable business," said Dale Jr. on the June 17 episode of the podcast. "You can do it and break even. You can do it and make a little bit of money. In some years, there’s a 2-3 million dollar profit, but there’s just as easily a 2-3 million dollar loss the following season, depending upon how much you tear up and where you finish in points.”

Dale Jr. was in conversation with TJ Majors on his Dale Jr. Download podcast and spoke about the nuances that come with being a race team owner, having seen the balance sheets of his own team, JR Motorsports.

“You’re literally out there racing for owner’s points purse, and the race purse, and your success or lack of success will determine your final profit or loss,” the 26-time Cup race winner said on the podcast.

The conversation flowed in the direction of the business aspects of racing, as NASCAR’s charters and their current values were being discussed. Each charter is estimated to be around $100 million, which was established after the outcome of the anti-trust lawsuit filed by 23XI and Front Row Motorsports against NASCAR. 

Speaking on how teams would view that valuation and whether it makes a difference if you sell a charter now or 10 years down the line, Dale Jr shared his thoughts.

Addressing how valuation and timing affect charter sales, Dale Jr. said that race teams spend tens of millions to operate, so the return needs to be far greater than a modest gain from the charter itself for franchises to realistically reach $300–500 million valuations.

According to him, while it is possible, it will take considerable effort to improve profitability across the sport.

Dale Jr. didn’t mince his words and even compared NASCAR charters to other sports on how teams  are valued and sold across the American landscape, being vastly different from NASCAR’s charter valuations

Why the charters aren’t profitable yet?

There were rumors that NASCAR would remove charters completely, and that meant that teams would have been under threat to lose their cars without making any money. Dale Jr. alluded to the fact that while the lawsuit may have been seen as a means to gain better profit, the primary target was security. 

“They were basically more apt to lose money than they were to make money," he said. "So they did go after some more TV money to make their opportunity to break even or profit somewhat better. But the most important thing was the permanent charter because there was this threat.”

The charter valuations haven’t really gone up, and Dale Jr pointed to exactly why that is the case.

“When you have a lot of buyers, then the value of that charter goes up," he came up with the reason. "Right now, the only people really wanting charters are the people that are already here.”

Dale Jr. explained that racing’s business model has stayed relatively the same for years, and while he would like to be earning money from the Auto Parts series, that goal has not been met. He said he continues to manage JRM despite its lack of profitability because he wants to stay involved in racing.

While Junior continues racing for the love of it, RFK Racing is looking to secure a third charter for next season, while there are none currently open and available. 

What do you think of Dale Jr.'s take on the profitability of the motorsport business? Let us know in the comments.

Read more at Daytona Racing Digest.

Written by

Debrup Chaudhuri

Edited by

Soheli Tarafdar