Things are going well for NASCAR's top team, Hendrick Motorsports, which includes some of the sport's top drivers, including Jeff Gordon, Kasey Kahne, Jimmie Johnson, and Dale Earnhardt Jr. But a closer look at the value and profit of the other top teams reveals a sport that is trending in the wrong direction.
According to Forbes.com and its valuations of NASCAR's top nine teams, the current value of Hendrick Motorsports ($348 million) is relatively unchanged since 2010 ($350 million). However, the average team has seen a 31.1% drop in profit since 2010 which has translated into an average team value of $139.7 million, down 16.4% during the same span.
NASCAR's popularity surged up until 2007, but then the bubble burst. Forbes blames the recent decline in values on plummeting attendance and TV ratings.
What is particularly interesting is that the last decade has seen the number of teams reduced through mergers and acquisitions, which you would think would increase the value of larger teams. But that is not happening.
A recent report by Andrew Maness of Racingnomics.com shows that the top nine teams represent what was once 15 different teams just eight years ago. In other words, there are fewer teams, but the pie they are fighting has been shrinking even faster.
This suggests that there are still too many teams for the current economic climate and further reduction to 6-7 major teams would help teams return to the profit margins seen in 2010.
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