The high-octane world of NASCAR is yet again on the precipice of a dramatic twist. This time, the shockwave stems from a billion-dollar brand that once dominated the high-speed racing circuit with its iconic marketing initiatives. Hooters, a household name in NASCAR, is reportedly grappling with a severe financial crisis, a year after a sudden split with Chase Elliott and his team.
Speculation about Hooters filing for bankruptcy has been gaining momentum, causing ripples of concern amongst fans and industry insiders alike. The looming question is whether this once beloved brand can navigate its way out of the financial turbulence or become another unfortunate casualty of economic instability. A recent report by Bloomberg sheds light on the troubled journey of Hooters and what the future potentially holds.
The abrupt end of the partnership between Hooters, Chase Elliott, and Hendrick Motorsports sent shockwaves through the NASCAR community. Since 2017, the restaurant chain had been a reliable sponsor, but financial constraints led to an unexpected halt of this association in 2024. The inability to settle unpaid sponsorship fees amounting to over $1.7 million forced Hendrick Motorsports to initiate a lawsuit against the organization. The sudden termination of this contract also had significant implications on the NASCAR race schedule, as Hooters had sponsored two NASCAR races and had been set to sponsor one more at Richmond Raceway.
Recent reports suggest that Hooters of America is in discussions with creditors and has hired the legal expertise of Ropes & Gray to aid in preparing for a potential bankruptcy filing in the coming months. The main objective is to help Hooters restructure its business through bankruptcy court proceedings, though plans are not yet finalized. Should they proceed, the court proceedings are expected to commence within the next few months.
Hooters’ financial troubles run deep, with debt estimated at around $300 million as of September 2024, largely resulting from asset-backed bonds issued in 2021. As part of its turnaround strategy, Hooters has closed approximately 40 underperforming locations across Rhode Island, Virginia, Florida, Kentucky, and Texas. Additionally, it has initiated a new venture, “Hoots Wings by Hooters.” However, declining customer traffic and high operating costs continue to exacerbate the financial strain.
While restructuring through bankruptcy, akin to Red Lobster or TGI Fridays, may provide a lifeline for Hooters, it’s worth noting that casual dining chains like Hooters have been grappling with rising costs and decreasing patronage in recent years.
Despite the sudden end to the Hooters and Chase Elliott partnership, a new sponsor has stepped in, allowing Elliott to continue his racing endeavours. In August 2024, Coca-Cola took over the primary sponsor role for Chase Elliott’s No. 9 Chevrolet at the Richmond Raceway. Furthermore, Amazon Prime Video has secured a partnership with Hendrick Motorsports as a primary sponsor for Elliott from this season through 2027.
Stacey Rosenson, the head of U.S. Sports Marketing at Prime Video, expressed enthusiasm about the collaboration, stating, “We’re thrilled to work with Hendrick Motorsports and Chase…Chase is a wildly popular, championship-winning driver, and we can’t wait to see the No. 9 Prime Video team in action…” Prime Video’s sponsorship is expected to garner significant attention, particularly as they will be broadcasting select races in 2025.
Rick Hendrick, too, expressed satisfaction about the new partnership, stating, “Welcoming Prime Video to our team is a proud moment…Hendrick Motorsports is ready to support their efforts, and we look forward to building something special together over the next three years.”
Prime Video will sponsor three primary races annually and offer associate sponsorship each year. Their sponsorship debut for the No. 9 Chevrolet is set for April 27, 2025, at the Talladega Superspeedway, followed by Kansas Speedway on May 11 and the NASCAR All-Star Race at North Wilkesboro Speedway on May 18. The transition from the Hooters era to the Prime Video era is set to bring a new dynamic to NASCAR.
