Denny Hamlin’s comments about the revenue sharing format in NASCAR and what drivers get from it shouldn’t be taken as an argument that NASCAR’s highest earners deserve more money.
Hamlin, a 31-race winner in the Cup Series, is one of the Cup Series high earners. He’s a guy who has a basketball court at his lakeside house and his living room includes his Daytona 500 winning car in a glass display.
Hamlin’s also become one of the most outspoken drivers in the garage and a key force behind the realization of the driver’s council, a group of Cup drivers who have the ear of NASCAR executives. Hamlin knows he’s got some of the most leverage in a sport where its participants generally have the least. While other major sports in the United States have players unions, NASCAR drivers don’t. There was hell to pay when drivers tried to unionize many moons ago.
So when Hamlin talks about NASCAR revenue sharing, like he did Wednesday at a promotional appearance, his comments are worth listening to. After he said that NASCAR revenue from television needed to be distributed differently, Hamlin said drivers weren’t paid enough relative to their other professional sport counterparts.
But that increased pay shouldn’t be coming from funds team owners aren’t already getting.
“It’s a combination of all those things,” Hamlin said. “Essentially the drivers get two months off. The teams get no months off. There just has to be some kind of different revenue sharing. I’m sure this will be in some headline somewhere where ‘Denny says the drivers aren’t paid enough.’
“I’m basing it off all other sports. I’m not including myself. I’m including probably the back half of the field that those drivers are risking the same amount I am, and they should be paid a hell of a lot more.”
The disparity in driver salaries is becoming more and more evident in NASCAR as the teams that aren’t struggling to field cars or shutting down go for lesser-priced talent. It’s easy to envision a NASCAR world 10 years ago where Hendrick Motorsports picks a champion driver like Matt Kenseth to fill one of its open seats or where Stewart-Haas Racing doesn’t hesitate in picking up the option on 2004 champion Kurt Busch’s contract.
Instead, Hendrick chose two younger drivers who command a salary commensurate with their achievements. Meanwhile, Busch may be in limbo as Monster decides what it’ll do with its SHR sponsorship and Kenseth hasn’t publicly said what he’s doing in 2018. When sponsor dollars are shrinking, teams have to shrink correspondingly.
And it’s the teams that have been forced to shrink the most. Tracks currently get 65 percent of all television money from the massive multi-billion dollar contracts the sport has with Fox and NBC. Teams get 25 percent of the television money. The rest of their income has to come via sponsorships. The share of revenue that goes to NFL and NBA player salary pools is much closer to a 50/50 split.
Hamlin isn’t the only one who thinks teams (and drivers) should get more, and it’s an incredibly fair thought to wonder if NASCAR would be healthier if the track and team split was far more equitable. If tracks got 50 percent and teams got 40 percent of the television pie, could a team like Richard Petty Motorsports afford to keep the doors open for a couple of years without sponsorship? Could teams that currently hire drivers based off the amount of sponsorship they bring along go out and hire strictly on merit?
Possibly. But we’re also realists. Significantly changing the distribution of income in NASCAR seems impossible from our vantage point.
Both International Speedway Corporation and Speedway Motorsports Incorporated, the two track conglomerates that own and operate a majority of NASCAR tracks, are publicly owned. ISC’s annual revenue was $645 million in 2015 and $661 million in 2016. Cutting the percentage of television money the tracks get is going to make those numbers go down substantially.
And shareholders aren’t going to go for that. When was the last time you saw a publicly owned company volunteer to have reduced revenues? With less money coming in, tracks would be forced to find even more ways to be profitable and potentially do that with fewer staff members.
Doing more with less rarely works out in the corporate world. Just take a survey of teams in and around NASCAR. They’ll tell you how hard it is.
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