NASCAR’s impending financial crisis

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It’s no secret that NASCAR teams are struggling for sponsorship, which becomes a real problem since it makes up the bulk of the race team’s money.

Denny Hamlin was asked about the financial struggle earlier this week and his answer has people talking. When asked if cutting drivers’ salaries was a way to address the team financials, Hamlin said the drivers, who get two months off a year and face danger every week, are already underpaid.

Now, when I first read this, I thought of the pictures I see on Instagram of Hamlin’s girlfriend, Jordan Fish’s gigantic closet, their child’s amazing nursery and the fact that they have a giant house on Lake Norman, and I said to myself, “Your life must suck.”

But when put into context, Hamlin said when compared to other sports, such as the NFL and NBA, drivers are underpaid.

As it stands, the largest percentage of the revenue distribution goes to the race tracks, which Hamlin said needs to prove worthy of their share by making upgrades and growing the experience for the fans and teams. In other words, they need to be reinvesting the money they’re currently pocketing.

Hamlin called out Dover for its “terrible garage stalls” that aren’t enclosed.

“The crew members deserve better working conditions than what they’ve got,” Hamlin said. “We’ve got to hold these tracks to a higher standard, not only with the race surface but the fan experience, the team experience.”

Hamlin also mentioned the TV dollars. It’s estimated to be about $8 billion, but it’s divided up where the tracks receive their 65 percent and teams receive 25 percent and NASCAR receives 10 percent.

It wasn’t long ago that Dale Earnhardt Jr. mentioned it was cheaper for a team to take on a new driver than keep a veteran.

“You’ve got a lot of young guys coming in being offered and accepting contracts that are a fifth to a 10th of what veterans are getting paid,” Earnhardt said. “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, everybody’s got to take a little cut. Everybody’s got to dial it back. Everybody’s got to realize they have to accept some of that fallback and difference. That’s the same with the driver’s contracts.”

According to NASCAR on NBC, a driver salary was in the $20 million to $30 million range annually in NASCAR’s peak climate in the mid-2000s.

This is how Jeff Gordon’s current net worth is estimated at $200 million and Earnhardt’s at $300 million. It was not uncommon to find drivers in commercials outside of the NASCAR broadcast, chip bags, etc, and merchandise was a lot easier to find in local stores.

The harsh reality is, sponsorship money is not going up anytime soon, if ever. Yet, teams are so heavily reliant on it. Perhaps financial redistribution is the key to the longevity of the sport or maybe the length of the schedule should be revisited.

Switching gears, last weekend was the first knockout round of the playoffs. Kurt Busch, Ryan Newman, Austin Dillon and Kasey Kahne are out of the running for the championship.

Kyle Busch won the race last weekend and advanced alongside Martin Truex Jr., Kyle Larson, Brad Keselowski, Jimmie Johnson, Kevin Harvick, Hamlin, Ricky Stenhouse Jr., Ryan Blaney, Chase Elliott, Matt Kenseth and Jamie McMurray.

The second round begins this weekend at Charlotte Motor Speedway. You can catch the action Sunday at 1p.m. on NBC.