Denny Hamlin - Drivers are underpaid

[LewTheShoe]

In the wonderful world of auto racing, prize money is not sufficient, has never been sufficient and never will be sufficient.

So true. I rarely agree with Hamlin, but this time he is right. The revenue distribution is way off, but it will be a while before it changes much. The structure of the sport, and its long history of being this way, are the reasons for this. Meanwhile, ISC books record earnings... and is spending the money like it grows on trees. I do not understand the economic rationale for their capital expenditures... I'm thinking there are non-economic factors involved, just a guess.

BTW, the last time a driver publicly addressed revenue distribution in Nascar, and complained about the dangers of over-reliance on outside sponsors, was Keselowski in 2013. He wound up being called upon Brian and Lesa France's carpet for a friendly little conversation. Despite that, I feel sure that revenue distribution wars will be waged by the RTA in the coming years.

 

[ChexOrWrex]

"Underpaid"

 

[Team Penske]

I agree that the revenue distribution is wayyyyy off. It boggles the mind why 75% of the tv money doesn't even reach the teams. Why the tracks need 65% of the money to not even update their facilities is bonkers.
............................................................................................................................................................
Your not really saying this?? Your not serious are you?? Are there any other Nascar fans out there that don't know that the track money is used in part to pay race purses??
Tracks don't update their facilities? I can't believe some one is this naive.

 

[LewTheShoe]

The tracks get their 65% of the TV money. The teams get 25% paid through purses and other payments to charter holders. Nascar gets 10%.

The tracks also contribute funds to the purse. There is more to the purse than just the TV money. IDK how much. I think it is pretty small in some cases.

The teams also get a points fund distribution at the end of the year, and that was always paid by Sprint, so I guess Monster now.

 

[Skoalbandit33]

The tracks get their 65% of the TV money. The teams get 25% paid through purses and other payments to charter holders. Nascar gets 10%.

The tracks also contribute funds to the purse. There is more to the purse than just the TV money. IDK how much. I think it is pretty small in some cases.

The teams also get a points fund distribution at the end of the year, and that was always paid by Sprint, so I guess Monster now.

The drivers never cared about this when sponsorship wasn't a big problem but they will all be squealing soon and when the broadcast deal ends they will be squealing like Ned Beatty in Deliverance. The gravy train is in the process of ending for Nascar and everyone involved in the series will learn to make do with substantially less or won't be part of the series. There is no silver lining or better days ahead and I know you understand that.

 

[darlingtonfan]

I don't see the tracks giving up any percentage of their money considering the attendance problems they have.

 

[Skoalbandit33]

I don't see the tracks giving up any percentage of their money considering the attendance problems they have.

For sure as there would be some tracks in serious trouble if not for the TV revenue they receive. Nascar will eventually go back to being a gate driven entity and when that happens it will be ugly.

 

[4tires17gals]

what is a gate driven entity ?

 

[kkfan91]

So...we should start the countdown to Dennys forced retirement?

 

[gnomesayin]

So true. I rarely agree with Hamlin, but this time he is right. The revenue distribution is way off, but it will be a while before it changes much. The structure of the sport, and its long history of being this way, are the reasons for this. Meanwhile, ISC books record earnings... and is spending the money like it grows on trees. I do not understand the economic rationale for their capital expenditures... I'm thinking there are non-economic factors involved, just a guess.

Yep. It seems a sure thing to me that if the majority of venues were owned by truly independent parties, the distribution would be significantly different. To what degree, I don't know.

It's humorous to me how many people fall into this shallow class warfare mindset of "He makes enough", the real subtext of which is "I'm jealous that he makes way too much". This regarding a significant performer in an entertainment enterprise that generates billions of dollars of annual revenue and tens of millions of annual profits for a few parties. When people shame star athletes for wanting more share of the pie, what they're really advocating for is that the much richer owners should keep more. NASCAR is different than the NFL and NBA in that it isn't the team owners making huge profits. It's the France family via their ownership of ISC and NASCAR. What did Hamlin specifically argue for? That teams should receive a bigger share, which would trickle down to drivers. He's correct. And Brian France is a f@$king buffoon with his "Don't worry for a minute" mindset while more hard-working teams are forced out of business every year.

 

[ReturnTrip]

Denny will kneel during the next anthem to protest this injustice.

 

[Hotrod]

Most of these drivers live the Ricky Bobby lifestyle on a lake somewhere so I think they have or get enough.

Tracks , IMO, always need to be the top beneficiary in this equation so they can keep the
doors open and make improvements for the fan experience. When a track closes, its
ripple effect is huge to the community. When a driver leaves or retires, he is replaced
mere moments later.

 

[Skoalbandit33]

what is a gate driven entity ?

Something that depends on people buying tickets in order to turn a profit.

 

[Skoalbandit33]

Yep. It seems a sure thing to me that if the majority of venues were owned by truly independent parties, the distribution would be significantly different. To what degree, I don't know.

It's humorous to me how many people fall into this shallow class warfare mindset of "He makes enough", the real subtext of which is "I'm jealous that he makes way too much". This regarding a significant performer in an entertainment enterprise that generates billions of dollars of annual revenue and tens of millions of annual profits for a few parties. When people shame star athletes for wanting more share of the pie, what they're really advocating for is that the much richer owners should keep more. NASCAR is different than the NFL and NBA in that it isn't the team owners making huge profits. It's the France family via their ownership of ISC and NASCAR. What did Hamlin specifically argue for? That teams should receive a bigger share, which would trickle down to drivers. He's correct. And Brian France is a f@$king buffoon with his "Don't worry for a minute" mindset while more hard-working teams are forced out of business every year.

Denny can advocate for anything he wishes but as I said earlier the market will determine what he makes as well as what form Nascar ends up taking. If you are involved with Nascar you are involved with a benevolent dictatorship and that is not likely to change.

 

[Team Penske]

At one point in time the King/Queen lost their authority to rule.

 

[Ford 222]

I have talked to people at the shop and they say Denny spends a lot of money lol.. they said he going to go broke if he don't stop spending so much

Makes sense. Hope it happens. He strikes me as much a douche as his teammate, only able to hide it.

 

[Zerkfitting]

As one team owner pointed out (before the multi-car teams) - to make a small fortune in racing, start with a big fortune.

 

[Skoalbandit33]

"Money, it's a crime. Share it fairly but don't take a slice of my pie."

 

[Snowman]

It's humorous to me how many people fall into this shallow class warfare mindset of "He makes enough", the real subtext of which is "I'm jealous that he makes way too much".

He can make his money, there's no problem with that. However, it is ridiculous for Denny Hamlin, more than likely one of the highest paid drivers next year, to say drivers are underpaid. Now if McDowell, Matt D., Cassill, or Whitt said that they don't get enough of the pie and are barely scraping by, that's acceptable. Denny is just the worst possible candidate to bring this issue to light and IMO it discredits the argument.

 

[Allenbaba]

I bet @Allenbaba is chuckling....

I kinda get what Denny's saying in theory. But in financial realities? I mean, I don't know. I've stood next to many of these drivers during autograph sessions, my job being to hold the stack of hero cards and hand them to drivers one at a time to sign. Some days that's my only contribution to the entire machine...and yet, somehow, my family and I are able to live pretty comfortable lives. So I suspect we'd be quite content if we were forced to slum it on a Landon Cassill budget.

 

[Conover]

His comments given the current situation are almost laughable. I do not claim to know anything about where revenue/expenses reside for the tracks or the teams. I believe Speedway Corporation is a public company so I might check out their annual report. The expense factor for racing, maintenance and capital improvements is big. Tracks are reportedly not making money even with the share they have. Race teams are obviously scaling back due to sponsor withdrawals and reduced $ for funding. Drivers are important but are possibly the most replaceable asset in this sport.

Writing is on the wall. Reduced attendance = lower gross revenue. Where does the track make up those $$? Can't sell more food or beer with fewer fans. If they didn't have a ton of volunteers eager to just be around racing they would close. As for TV; NASCAR is lucky if there is no clause in the contract for revenue adjustment due to ratings.

If drivers were paid like golfers, strictly on performance via the purse, that might be optimal. Best teams with the best cars would attract the best drivers. Contracts today are fairly locked in for the top talent. Big bucks are being left at the curb for young risers with plenty of talent at a much reduced price. The free market decides (and should) value in this sport.

 

[aunty dive]

... I do not claim to know anything about where revenue/expenses reside for the tracks or the teams. ... Tracks are reportedly not making money even with the share they have.

You're right in the first instance and wrong in the second. The information is out there.

 

[StandOnIt]

Hambone needs the "you need Nascar, but Nascar doesn't need you" speech.

 

[Skoalbandit33]

I wish I had an operational crystal ball as I could look into the future and see what Nascar's next broadcast deal would look like. If it is similar to the one they currently have in place they will do exceedingly well but if it is not worth nearly as much it will cause complete chaos as the goose that laid the golden egg will be gone.

 

[Skoalbandit33]

Hambone needs the "you need Nascar, but Nascar doesn't need you" speech.

Most of older established drivers don't need Nascar anymore at least from a financial perspective.

 

[aunty dive]

He can make his money, there's no problem with that. However, it is ridiculous for Denny Hamlin, more than likely one of the highest paid drivers next year, to say drivers are underpaid. Now if McDowell, Matt D., Cassill, or Whitt said that they don't get enough of the pie and are barely scraping by, that's acceptable. Denny is just the worst possible candidate to bring this issue to light and IMO it discredits the argument.

Did you read the article in its entirety?

 

[Snowman]

Did you read the article in its entirety?

Yeah, did he or did he not say they should make NFL, NBA money? That refers to drivers not making enough money. The fact of the matter is, those sports are much more popular and more successful at a revenue standpoint then NASCAR is. Always has been, always will be. In any business, the money flows from the top to the bottom. If NASCAR was more popular and was more profitable, the drivers would be making more, the owners would make more, etc etc. IMO we're seeing a return to what NASCAR used to be, the big money is slowly leaving and with it, the days of big salaries.

 

[StandOnIt]

They need to put Hambone on the line at the Toyota plant for a day.

 

[Zerkfitting]

I recall reading that when the charter system started and the purse money became distributed to the teams, drivers had to renegotiate their contracts because some of their income came from the purse money (performance compensation). I don't think the purse supported a team since the driver/owner days decades ago.

Comparing driver salaries to other sports is apple/oranges. Ball and stick sports don't have to pay for a car and the huge costs associated with it (and cities usually pay for the stadium for ball & stick sports).

 

[aunty dive]

Yeah, did he or did he not say they should make NFL, NBA money? That refers to drivers not making enough money. The fact of the matter is, those sports are much more popular and more successful at a revenue standpoint then NASCAR is. Always has been, always will be. In any business, the money flows from the top to the bottom. If NASCAR was more popular and was more profitable, the drivers would be making more, the owners would make more, etc etc. IMO we're seeing a return to what NASCAR used to be, the big money is slowly leaving and with it, the days of big salaries.

He referenced people at the back of the field. You said he is the worst possible person to speak to that. I disagree. If you read the thing, it should be obvious to you that he hasn't sad he's underpaid. People are more inclined to pay attention to front-runners than they do to back-markers when they have something to say.

We often lament the fact that these guys are all just corporate shills and don't speak their minds. When they do and we don't like what they have to say, we vilify them.

 

[ChexOrWrex]

I kinda get what Denny's saying in theory. But in financial realities? I mean, I don't know. I've stood next to many of these drivers during autograph sessions, my job being to hold the stack of hero cards and hand them to drivers one at a time to sign. Some days that's my only contribution to the entire machine...and yet, somehow, my family and I are able to live pretty comfortable lives. So I suspect we'd be quite content if we were forced to slum it on a Landon Cassill budget.

As of 2016, SportsMaza claims that Cassill makes $950k/year.

If true, I think he will survive on that slum.

 

[Snowman]

He referenced people at the back of the field. You said he is the worst possible person to speak to that. I disagree. If you read the thing, it should be obvious to you that he hasn't sad he's underpaid. People are more inclined to pay attention to front-runners than they do to back-markers when they have something to say.

We often lament the fact that these guys are all just corporate shills and don't speak their minds. When they do and we don't like what they have to say, we vilify them.

Let me hear the above drivers I mentioned say they believe they are owed more money then they currently make. If indeed the back markers get a pay raise, no matter where it comes from, the other drivers will also want more. The market and their performance decides what these guys make. If Mike Harmon gets a raise being 40 laps down riding around, Elliott Sadler and Justin Allgier will believe they're worth more than they are currently because Harmon got a raise for doing literally nothing on track. That way of thinking says a company gives the lower performers better money just because of their job and that doesn't resonate with me at all.

 

[ChexOrWrex]

We often lament the fact that these guys are all just corporate shills and don't speak their minds. When they do and we don't like what they have to say, we vilify them.

Happens when people disconnected to reality say how something should be.

Politicians, sports stars, mega corporate business leaders - none above reproach.

 

[aunty dive]

He referenced people at the back of the field. You said he is the worst possible person to speak to that. I disagree. If you read the thing, it should be obvious to you that he hasn't sad he's underpaid. People are more inclined to pay attention to front-runners than they do to back-markers when they have something to say.

We often lament the fact that these guys are all just corporate shills and don't speak their minds. When they do and we don't like what they have to say, we vilify them.

Let me hear the above drivers I mentioned say they believe they are owed more money then they currently make. If indeed the back markers get a pay raise, no matter where it comes from, the other drivers will also want more. The market and their performance decides what these guys make. If Mike Harmon gets a raise being 40 laps down riding around, Elliott Sadler and Justin Allgier will believe they're worth more than they are currently because Harmon got a raise for doing literally nothing on track. That way of thinking says a company gives the lower performers better money just because of their job and that doesn't resonate with me at all.

Perhaps if we wait a while, others will chime in ... I really don't know.

Mike Harmon employs himself. There's a distinction to be made between a paid driver's salary and a car owner's points performance on-track earnings.

 

[gnomesayin]

As of 2016, SportsMaza claims that Cassill makes $950k/year.

If true, I think he will survive on that slum.

Again with the petty jealousy. Those "How much does X make?" sites are notoriously unreliable and use nonexistent data. Few commenters here actually bothered to read the article and Hamlin's full quotes in it. Let me recap:

1. “The pie has to be shifted for sure. The TV dollars coming into NASCAR is higher than it’s ever been, but we’re seeing fewer and fewer teams, and it just can’t survive. So it economically doesn’t make sense. The pie, the amount of TV money that the race teams share, has to go up, in my opinion."

2. “You’ve got the wrong guy to ask me on that, because I think we’re way underpaid on that as race car drivers. That’s a fact. I think there’s no doubt doing what we do, the schedule we have, the danger we incur every single week, NASCAR drivers should be making NBA, NFL money. I really, truly believe that. But it can not come out of the owners’ pockets."

3. “It’s a combination of all those things. 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.”

4. “Racetracks are making a lot of money. And I’m not trying to throw anyone under the bus, but they’ve either got to reinvest that money, which some tracks are. I’m not going to put some on the same island as others, but Dover (has) terrible garage stalls. It’s not even a garage. A garage is defined as something that’s enclosed. We have lean-tos that we’re working under. The crew members deserve better working conditions than what they’ve got. We’ve got to hold these tracks to a higher standard, not only with the race surface but the fan experience, the team experience. That money has to be reinvested to give us a better product and something for fans to see.”

5. "One of the most disappointing things I saw this weekend was eight cars running at the end of a K&N race at Dover. The model is not right. Someone’s got to come in and say, ‘Let’s reset.’ We have to start over from scratch. And I get it. Hey, it’s the way it’s been done for 50, 60 years, but the economics of sports have changed since then, and I believe there’s got to be a reset, and it doesn’t come from drivers. It comes from NASCAR switching and helping teams survive on a better basis. You’re going to get a better product on the racetrack. Listen, we don’t want only six race teams to be in NASCAR five years from now, but that’s the way it’s heading.”

6. “I think the radiators will be the biggest expense. I think really they’re just trying to stack pennies and trying to get to a bigger cost savings. Because ultimately what do we want to see in NASCAR? We want to see teams be able to fund race cars without sponsors being on the side of it. We need to keep this sport healthy. We shouldn’t have to rely on the money that comes in from the sponsors. (That) should be bonus money that goes to the team. That’s where I’d like to see it. These teams should be able to survive on purse money, and right now they can’t.”

It appears that most everyone was able to read the headline, and thus knows about the gist of quotes #2 and #3. The bulk of his statements concern the financial viability of race teams, and the percentage of TV money they receive vs. the corporations that own the tracks. I find that a far more interesting discussion and legitimate concern for everyone who cares about racing than what Driver X makes, what his house is worth, what he drives, etc.

 

[gnomesayin]

Denny can advocate for anything he wishes but as I said earlier the market will determine what he makes as well as what form Nascar ends up taking. If you are involved with Nascar you are involved with a benevolent dictatorship and that is not likely to change.

Part of the market is negotiation, and part of negotiation can be speaking publicly and using media as a means to attract support. Hamlin may be helping or hurting the causes he's concerned about, but the concept of free markets is inclusive of all of these tactics.

 

[Snowman]

Perhaps if we wait a while, others will chime in ... I really don't know.

Mike Harmon employs himself. There's a distinction to be made between a paid driver's salary and a car owner's points performance on-track earnings.

Mike Harmon wasn't really the best example but in regards to the performance aspect I was going for, hes perfect haha.

 

[aunty dive]

Mike Harmon wasn't really the best example but in regards to the performance aspect I was going for, hes perfect haha.

I knew what you meant.

Since people started racing, the haves and the have-nots have existed. The payout has always been scaled from the front of the field to the back. I don't see that changing for any reason.

 

[Skoalbandit33]

Part of the market is negotiation, and part of negotiation can be speaking publicly and using media as a means to attract support. Hamlin may be helping or hurting the causes he's concerned about, but the concept of free markets is inclusive of all of these tactics.

I am not saying that what Hamlin is doing isn't part of the game but as you say it is only just a part. If I was a Nascar driver I would not poke the bear very hard as there are hundreds of drivers that could take the place of the current crop and they would gladly work for 500K per year. They would not be as talented but the competition would likely be similar.

 

[LewTheShoe]

The drivers never cared about this when sponsorship wasn't a big problem but they will all be squealing soon and when the broadcast deal ends they will be squealing like Ned Beatty in Deliverance. The gravy train is in the process of ending for Nascar and everyone involved in the series will learn to make do with substantially less or won't be part of the series. There is no silver lining or better days ahead and I know you understand that.

Financing the race team operating budget is traditionally an ownership function, not a driver function, duh. And what is or isn't a "gravy train" is a matter of perspective and point of view. I believe racers are almost universally underpaid, although the few at the very tip of the iceberg are doing fine. Compared to other sports, Nascar drivers are significantly underpaid relative to several major stick-and-ball leagues... primarily NBA, MLB, the major soccer leagues, and maybe NFL. There are many reasons for this... business models, organizational structures, popularity of the sport, and others.

OTOH, comparing the many branches of the motorsports tree, Nascar has long been the most lucrative and financially vibrant branch. According to the annual Forbes analysis, last year Nascar had 13 drivers at or above the $12 million range. In contrast to this, F1 has probably three in that range, probably three in MotoGP, and zero elsewhere in racing. I'm sure Nascar will have fewer this year... Tony Stewart has retired, Carl Edwards has retired, Danica has substantial sponsorship shortfalls.

And perhaps still fewer next year, but it's still a damn good job, driving stock cars for a major Nascar team. It's likely to remain a damn good job, because the driver makes a huge difference in results in Nascar. @Acs may not believe it, but all he has to do is compare results... JJ versus KK, the 42 versus the 1, the 18 versus 11 or 20. By contrast, F1 is two-by-two according to team. Owners will gladly pay for that, unless they absolutely cannot pay for it. That's not a bad place to be, IMO.

The only "gravy train" in Nascar is the amount of TV money flowing to the racetracks, IMO. The cozy and incestuous relationship between Nascar and ISC is the real culprit here, as @gnomesayin pointed out.