Michael Jordan's Next Multi-Million-Dollar Investment
With 23XI Racing, Michael Jordan is giving professional motorsports another try — but will it succeed this time around?
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NBA legend Michael Jordan and current Nascar driver Denny Hamlin announced their intention to team up and form a new NASCAR racing team earlier this year, called 23XI Racing.
The superstar ownership group purchased Germain Racing’s team charter, which guarantees them entry (and therefore, a portion of the purse) into every NASCAR Cup Series points race.
Now, as the debut of 23XI Racing nears, the team has announced five lucrative primary sponsors that will be necessary to maintain the financial viability of the team going forward.
Their primary sponsors are:
As a primary sponsor, these companies pay anywhere from $5 million to $35 million annually to have their logos placed on the hood, rear quarter panel, TV panel, deck lid and roof panel.
The primary sponsors rotate throughout the season, depending on how much they are paying, but also have a say on the overall color scheme of the car and the driver’s fire-suit.
Outside of primary sponsors, 23XI Racing will surely have a wide array of associate sponsors also — which pay between $250,000 to $2 million annually but receive much less exposure than their primary counterparts.
In case you didn’t already know, this isn’t Michael Jordan’s first foray into the world of competitive motorsports.
From 2004 to 2014, the NBA legend ran “Michael Jordan Motorsports Racing Team” — a full-time participant in the American Motorcyclist Association (AMA) Pro Superbike racing series.
Despite up-and-down success, which saw his team finish as low as 35th one year and as high as 3rd another, the team eventually disbanded after a decade.
It was too expensive.
Not only did a bike costs over $5 million annually just to operate, but if you really wanted to compete, you needed to be willing to spend much more — think Mercedes & Ferrari in Formula 1.
When it comes to NASCAR, here’s how the economics shake out:
It costs around $400,000 to build a car
Expenses per race can be $1 million or higher
Annual costs to run a competitive team are $20 million to $30 million
The interesting part?
Michael Jordan is taking a different approach.
When it comes to his reintroduction to Motorsports through NASCAR, Michael Jordan is taking a much more calculated approach.
Rather than taking years and millions of dollars to develop the technical expertise required to build a competitive car within NASCAR, Michael Jordan’s 23XI Racing Team has signed partnership deals with Toyota & Joe Gibbs Racing.
In simple terms, 23XI Racing will write Toyota & Joe Gibbs Racing an annual check for purchased equipment—including cars—and services centered around technical information and updates throughout the year.
The best part?
It gives them a chance to compete right away.
Here’s what MJ had to say (Source):
"My main goal for 23XI Racing is to be competitive for a championship as soon as possible. Our partnership with Toyota and Joe Gibbs Racing gives us the equipment, resources and expertise to do it."
With Michael Jordan running the ownership group, did we really expect anything less?
With 23XI Racing—driven by Bubba Wallace—expected to debut at the 2021 Daytona 500, our initial expectations should be limited.
While some teams like Stewart-Haas Racing, who won four times in their first season, have seen initial success — much more have failed, including celebrity backed teams from Dan Marino to Julius Irving.
In the end, with a seasoned NASCAR professional in Denny Hamlin running the show, Michael Jordan’s next investment into motorsports seemingly should go much better than his last.
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