[h=2]CRANDALL: Is the NASCAR paddock facing a cash crisis?[/h] Friday, 25 August 2017


Kelly Crandall / Image by Kinrade, Harrelson/LAT








There are two certainties in NASCAR these days: Youth is taking over, and the cost of racing is a permanent hot topic.

Whether or not these two are intertwined has been the focus after Dale Earnhardt Jr. opened the door at Watkins Glen with comments about young drivers being cheaper than the veterans. Consequently, team owners are bringing in the younger talent for the rides that had been consistently occupied by established drivers.

"There's sort of been a major shift in how much drivers are getting paid," said Earnhardt. "How they're getting paid obviously changed with the new agreement we had a couple of years ago. Drivers started taking more of the purse. I don't know everybody's contract situation, but there is a less of a base [salary] and more purse-driven [income]. But one thing that's changed is that you've got a lot of young guys coming in being offered and accepting contracts that are a fifth to a tenth of what veterans are getting paid. And, that's money that can go into the team.
"These sponsors aren't giving teams the money that they used to. So, the owners and everybody's got to take a little cut. Everybody's got to dial it back. Everybody's got to realize that they have to accept some of that fallback and difference. And that's the same with the drivers' contracts. A lot of these veteran drivers are getting paid multi-million dollars; and a lot of these guys coming in are getting a fraction of that."
While no team owner has outright admitted to hiring a younger driver for that reason, many have pointed to the recent announcements of Matt Kenseth and Kasey Kahne (below) being out of jobs for next year. Both will be replaced by drivers under the age of 25.

But it's also important to note those drivers, Erik Jones and William Byron, come with sponsorship support. On the other hand, Kurt Busch is a technically free agent since Stewart-Haas Racing declined to pick up the option on his contract. While that doesn't mean the Daytona 500 winner will be out of his ride, things have reached a point where the numbers involved in the deal need to be renegotiated.
Sponsorship values have continued to change over the years. The entitlement sponsor of the premier series, Monster Energy, is widely rumored to be paying less than predecessor Sprint was. Sponsors from major organizations have either cut back on the number of races where they want a logo on a car, or have left the sport altogether (see National Guard and Dollar General, with Target and Great Clips shortly to follow)
Chip Ganassi does not talk about his drivers' contract situations, or those of drivers from other teams. The veteran motorsports team owner did admit to RACER the cost of racing is always going up, but said it was not limited just to what happens in the garage area, but also variables such as hotel bills, rental cars and so forth.
Ganassi elaborated further when speaking to reporters earlier this week at the NASCAR Hall of Fame.
"There's lot of different ways to do it," Ganassi said of cutting expenses. "You either increase your sales or decrease your costs, one of the two. Right now... it's a combination of both. But I think the important thing to understand is, we're constantly doing that.
"This is not something new to our business. These businesses are constantly evolving where you have to change the way you spend money in certain areas. This business changes dramatically each year: where you spend, where you don't, what you spend it on, what you don't spend it on, where the money comes from, where it doesn't. So, your revenue and expense is constantly changing.
"It's not a static thing where we sit down at the beginning of the year and say, 'we're going to spend money on this, this, this and this'. Motor racing is one of those sports come June or July or August, if you need something you got to go get it. And you don't always have the money to go get it, so you have to cut some budget [or] add to this.
"Those kind of things, you're always taking from this bucket and putting it in that bucket in our sport. It's a constantly evolving thing, it's not something that's set for the year by any stretch."
Other team owners, speaking anonymously, echoed Ganassi's sentiments. Barney Visser, the owner of Furniture Row Racing, fields two cars in the Monster Energy NASCAR Cup Series. One of those cars could disappear next season if sponsorship is not found.
"We've got to get the cost to come down," Visser said a few weeks ago.
Cost was one of the reasons why 2012 Cup champion Brad Keselowski decided to shut down his Camping World Truck Series operation. Keselowski has fielded a truck since 2008, expanding to two full-time entries last season. However, Keselowski made it no secret he was not making money in the series, which factored into his decision.

While Keselowski said it was not NASCAR's responsibility to look out for his team, the sanctioning body acknowledges it continues to explore ways to cut costs in the sport. Discussions between NASCAR and many of its councils (owner council, driver council, OEM council, etc.) are always taking place.
"I think that they continue to look at ways to cut the cost," said Tad Geschickter, owner of JTG Daugherty Racing. "Cutting back some tires this year, certainly, was a help to us. But, I will say that what we spend today versus what we spent 10 years ago, it's crazy to look at.
"We keep working along and before you know it we've got the sponsorship to do it, but certainly I think NASCAR is serious about it and the team owner council is serious about continuing to find ways to cut back on that anyway we can, as quickly as we can."
Until then, the chatter about the economics of NASCAR won't be going away anytime soon.