This Silly Season All About Dollars, Not Sense
There’s a simple rule in politics and business that applies to NASCAR racing, too: Follow the money.
And if you look at the moves so far in this Monster Energy NASCAR Cup Series season, they seem to have a common theme:
- Matt Kenseth will be out at Joe Gibbs Racing next year, to be replaced by Erik Jones.
- Dale Earnhardt Jr. retiring after this season, with Alex Bowman taking over for him at the No. 88 Hendrick Motorsports Chevrolet.
- Stewart-Haas Racing declined to pick up Kurt Busch’s option.
- Danica Patrick told USA Today that she might be released from the final year of her contract because the team doesn’t have a sponsor for next season.
- Several midsized teams have not announced driver plans for next year, but could make major changes.
Follow the money
In the cases of Kenseth and Earnhardt, both will be replaced by drivers who presumably will make a lot less than they do.
In a moment of rare economic candor, Earnhardt perfectly explained the situation during his media availability at Watkins Glen International on Saturday. The CliffsNotes version is simple: Sponsorship dollars have shrunk, so what teams are willing or even able to spend on drivers has shrunk, too.
This is how Earnhardt explained it: “These sponsors aren’t giving teams the money that they used to,” he said. “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.”
And there’s a reason for it.
“You’ve got a guy that you think has got a lot of talent, very young, a lot of potential,” Earnhardt said. “And then you’ve got a veteran who is established. But he wants three, four, five, or six times the amount of money. You’re going to go with the younger guy because it’s a better deal financially.”
It’s not only a better deal, financially. It might be the only deal that keeps the race team afloat.
“You can’t pay a driver five to eight million dollars a year if you ain’t got but $10 million worth of sponsorship,” said Earnhardt. “That ain’t going to work. Guys aren’t getting $20, $30, $40 million a year on sponsorship. Owners aren’t getting that anymore.”
Follow the money.
“Drivers are having to sort of understand that change is coming down the pike,” Earnhardt said. “If it hasn’t happened to them yet, it’s going to happen to them. And the young guys, they don’t know any better. They want to race and they’re taking whatever they can get. That’s a good change for the owners.”
Of course, the one thing that makes this work for owners is the abundance of young talent coming up through the ranks.
Then again, that’s the very same thing that makes it not work for older, experienced and highly paid drivers.
Follow the money.
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