Money & Awards
Common sense would tell you the winner would make the most and the payout would decrease consistently downward through the finishing order until the 43rd finisher received the smallest check. Right? Well, no, and welcome to NASCAR Math 101 a complicated formula for dividing money in NASCAR. The variables include track owners, television networks and more than three dozen corporate sponsors who dole out dollars to drivers who are willing to paste decals all over their racing machines. Although the primary sponsor's logo and colors dominate, cars are splashed with all sorts of decals in various colors, sizes and shapes. Several are mandatory. Most others are optional.
Prize money in all race competition shall be payable to the driver, and each driver will be solely responsible for the settlement with the car owner. drivers are independent contractors; they hire themselves out far the season to the best team possible. Each driver negotiates his own financial arrangement with the owner of his race team, so no two deals are alike. However, all drivers receive income from three basic sources: (1) racing, (2) personal endorsements, and (3) licensing revenue. Some drivers' contracts include clauses that compensate them for awards they would have won but didn't because their car owner doesn't carry a particular decal.
Prize Money Earnings from racing have two facets: a base salary, plus a percentage of the winnings. drivers who are just starting out at the Winston Cup level may get a salary of $100,000 and 10 percent of the purse.
Those with more experience but no record of recent success may be able to negotiate something between $100,000 and $200,000 in salary and perhaps up to 20 percent of the winnings.
For NASCAR's top drivers, those who have years of experience and have demonstrated the ability to win races, salaries range between $500,000 and $800,000 a year, plus 30 to 50 percent of the winnings. In a season, a top ten driver will win between $1 million and $3 million for the team. The driver's take, on top of his salary, could be anywhere from $300,000 to $1.5 million.
Owners, drivers, agents, sponsors and manufacturers, who are all part of the contract process, wouldn't talk about specific drivers and teams, but several sources say compensation at the top of the Sprint Cup food chain has been rising dramatically in the past year and a half.
Here are the parameters of what they've told me that drivers anywhere in the top 10, and not necessarily toward the top, are receiving this year: Retainers of $6.5 million to $7 million, $2 million in guaranteed prize money, a $500,000 to $1 million signing bonus and a personal services contract with the manufacturer or sponsor of $400,000 to $500,000. They also make big bucks on merchandising, but it's difficult to assign a hard number because of the broad range that is based upon a driver's popularity.
The bottom line: Every driver signing a new contract for 2009 can expect to make $10 million to $12 million over the life of a deal and ink a contract between three and five years in length.
To illustrate how much salaries have jumped, several years ago, Dodge offered Tony Stewart a $5 million per year retainer for three years to jump from Joe Gibbs to one of its teams. It would have made him the highest paid driver in NASCAR.
Carl Edwards re-signed with Roush. He's an emerging superstar - 28 years old with three wins this season and 10 in a five-season career - with an engaging personality and a trademark back flip after he wins. Of the $26 million per season from AFLAC (It's been reported, by Street & Smith's Sports Business Journal, that AFLAC is paying $78 million from '09 to '11 to sponsor Carl Edwards at Roush Fenway Racing.), it would seem likely that Edwards' salary should approach $10 million. Prize money and other sources would push his annual income to $15 million, not including the points fund money.
In a year defined by economic woes, negative press does nothing to assuage perspective companies to put their name on the side of a race car. By SI.com's count, only 28 full-time teams have confirmed, full-time primary sponsorship for the 2009 season as of July 31. Among those missing from the list are some of the higher-profile programs in the sport: All three Michael Waltrip Racing programs, both Yates Racing teams, at least two Dale Earnhardt, Inc. teams, Gillett Evernham's No. 10 car, both Petty Enterprises machines and the famed Wood Brothers No. 21.
While the number will surely increase, for the moment that's well below the 43 needed to fund a full field of competitive entries for the 2009 season. Furthermore, in the last few years, NASCAR has seen a litany of longtime sponsors choose to either leave the sport or seriously reduce their participation.
Tide, Yellow Transportation, Dodge Dealers, Burger King and Domino's Pizza are just some of the higher-profile companies who have made their way through the exit doors. AAA will join AT&T and Alltel in that department following the 2008 season, the latter two companies pushed out due to the "grandfather" clause prohibiting other cell phone companies to be a primary sponsor in a series sponsored by Sprint.
And while these corporations are leaving, it's been a struggle to see them replaced. Old Spice joins Office Depot on the No. 14 next year, joining AFLAC as the only companies to significantly increase their involvement for '09. At a cost of $26 million to sponsor the No. 99, AFLAC's deal illustrates just how expensive the process has become. Becoming a primary sponsor is no longer as simple as one guy from a small company cutting a check for the whole season. Teams are now dealing with Fortune 500 boardrooms, an extensive process that ends with a sizable chunk of marketing budget focused on the sport.
Of course, the more money you spend, the more you focus on what you're spending it on. And as the intensity of the spotlight increases, NASCAR's struggling under the weight of some negative publicity. Attendance is down this year, and the $225 million lawsuit involving Mauricia Grant remains unresolved. An extension has been filed in that case, and NASCAR's response is expected by the end of August; but at the moment, it remains the elephant in a room now filled with plenty of other issues to juggle. The last thing the sport needed was for its second-biggest race to be plagued by faulty tires and questionable decisions.
A number of Cup teams are courting sponsors who are on the fence about their future involvement. Target, NAPA, UPS and the U.S. Army are just a few of the companies taking a step back and looking at how to best invest in the future of the sport. Unfortunately, companies looking to sign on the dotted line don't have until November to see what's going to happen with this sport. Investments need to be made now for the coming season, and that means reaction, fan support and the racing on the track will be closely watched for the next few weeks. Some marketers may need to see the sport moving in a positive direction in order for them to be significantly invested in its future.
Besides race contingency awards, there are manufacturers' awards, dispersed at the end of the season. Qualifying And Special Awards vary from race to race, but only those awards that are guaranteed to be paid out are listed on the announced purse and on the entry blank.
A NASCAR race car is covered in decals. They are called contingency decals, and they have been around since the days of beach racing in Daytona. Car parts companies would give the teams parts and money if they agreed to put their stickers on the car. And that was just for exposure to the modest crowds that gathered at the beach to watch in person. Today, cars are shown up close and personal with in-car cameras and tight camera shots before a national television audience.
There are roughly 30 contingency sponsors. Richard Petty used to refuse to run alcohol-related companies for moral reasons. There are other examples, but almost all of the teams choose to take the easy money.
One of the earliest was Pure Oil. In the early days, if a guy put a Pure sticker on the car, he got free gas and oil. Over the years it has mushroomed and car owners gleefully decorate their 200-mph billboards with all of those stickers.
The generous participation of many corporate sponsors in special awards programs adds a unique dimension to the excitement and competition of NASCAR racing. These programs provide drivers and crew members the opportunity to compete in "races within each race" throughout the entire NASCAR season and the chance to win cash and prizes.
Any discussion of race purses reminds me of a story Bud Moore told, about how he and the half-dozen or so other top team owners once badgered Big Bill France to increase prize money. France did, but the increase went to the bottom of the finishing order, not the top. When the irate winning car owners asked him why, France told them: "Because you sons-of-b-----s need somebody to pass!" "You know what? He was right," Moore said. "Wasn't nobody going to pay good money to see six cars race."
As far as I'm concerned, the prize money structure is the least logical thing about auto racing economics. This, after all, is the sport in which, if you want to make a small fortune, you should start with a big one. At the first beach race in 1938, the spoils awarded the winner included a box of cigars, a bottle of rum, two cases of Pabst Blue Ribbon and a pair of sunglasses from the local Walgreen's. In today's society, that doesn't sound like a grocery list of items you'd supply for a man who likes to drive fast.
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