NASCAR is in scramble mode
NASCAR’s business model keeps downsizing to the scale of Groupon and Overstock.com, with a dash of the Dollar Store. Everyone wants to pinch pennies. Faced with drops in sponsorships, the inability to pay top drivers, sagging attendance and drops in TV viewership, NASCAR is in scramble mode going into the 2018 season. But that’s not just me talking. NASCAR chairman Brian France admitted over the weekend that the sport could be in for some drastic changes as it looks to keep expenses from escalating out of control.
“There’s a lot more we can do, and we’re going to do it,” France told NBC Sports at Charlotte Motor Speedway. “That’s what the charter opportunity gives us the chance to do. We’re working with (teams) to see how we can control expenses in a way that has not been done in motorsports before.”
The notion of a spending cap has been floated around. This is where things get complicated because it’s impossible to compare NASCAR to ball-and-stick sports and their salary caps.
Drivers are essentially independent contractors who work out a deal with team owners and sponsors, with NASCAR having no control over the particulars.
But those sponsorship deals — especially lucrative ones with top drivers — have been imploding in recent months. Matt Kenseth and Kurt Busch are among the veteran drivers out of a ride because they have priced themselves out of the market.
Denny Hamlin, another veteran driver, voiced concerns about revenue redistribution in the sport last week, suggesting drivers need to make more money.
“The pie has to be shifted for sure,” said Hamlin, who is fifth in the playoff standings. “The TV dollars coming into NASCAR is higher than it’s ever been, but we’re seeing fewer and fewer teams, and it just can’t survive. So it economically doesn’t make sense. The pie — the amount of TV money that the race teams share — has to go up, in my opinion.” Good luck with all of that, Denny. “I truly believe our guys are worth exactly what other top athletes are worth,” said Larry McReynolds, a longtime NASCAR insider and now an analyst on Fox Sports. “Unfortunately, because of what it takes to make our sport work, unlike stick-and-ball sports, the numbers just won’t get there.”
The cash-flow problem will no doubt be addressed in the off-season and will likely lead to cutting a day off the weekend schedule, which will add up considerably. But it’s still a tough road economically. NASCAR was fortunate to land a 10-year media partnership with NBC Sports Group that began in 2015. The deal was reportedly worth $4.4 billion. Coupled with Fox paying $2.4 billion over eight years of its contract (2015-22), NASCAR’s coffers now have a combined worth of $6.8 billion in the years ahead.
While that’s enough cash to keep NASCAR afloat for a number of years, everything else is skewing in the downward direction. Hence the worrisome prospects, including the marketing sledgehammer of losing the sport’s most popular driver (Dale Earnhardt Jr.), and its most polarizing one (Danica Patrick). Each moves the needle like no other driver.
Those who are staying on, like Hamlin, aren’t happy.
“We’re way underpaid as race car drivers,” said Hamlin, who is fifth in the playoff standings with six races to go. “There’s no doubt, doing what we do, the schedule that we have and the danger that we incur every single week, NASCAR drivers should be making NBA, NFL money.
“I’m sure this will be in some headline somewhere where Denny says drivers aren’t paid enough, but I’m basing it off all other sports. I’m not including myself. I’m including the back half of the field — those drivers are risking the same amount I am and they should be paid a hell of a lot more.”
So you have drivers asking for more money in a sport where dollars are dwindling.
I feel your pain, Denny, but as noted, good luck with that.