Salaries skyrocketing in NASCAR
Unlike other big league professional sports, NASCAR's teams and drivers don't disclose compensation. The public knows what Peyton Manning, Alex Rodriguez and Kobe Bryant earn, but can only guess and wonder about Jeff Gordon, Dale Earnhardt Jr. and Kyle Busch.
NASCAR does release money won from purses, and it's a recognized fact that drivers get a healthy percentage, splitting the rest with the team. But how big a cut is open to negotiation and also can be dependant upon where a driver finishes in races and the season standings. It's safe to assume, for example, that with four wins and $3,245,614 in official Sprint Cup earnings in 13 races this year, Kyle Busch has already cleared more than $1 million in prize money.
Salaries and bonuses are closely guarded secrets by both sides. There are no salary caps or player unions or minimums based upon years in the league in NASCAR, or any other form of racing, and it allows them to keep their business private. They like it that way.
When Jeff Gordon was going through his divorce with first wife several years ago, she sued to force Hendrick Motorsports to open its books and show what Jeff had made. Hendrick and Gordon were able to block the demand in court, but it points to fact that even some husbands don't tell their wives about their contracts on the circuit.
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.
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. Edwards re-signed with Roush this spring. 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 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.
Those may be the type of numbers Greg Biffle is looking for as his contract negotiations with Roush have dragged on for more than a year. He keeps saying he wants to finish his career at Roush, but you wonder what could be taking so long? The obvious answer is agreeing on money. Biffle, fifth in the Cup standings, undoubtedly wants that $10 million-$12 million, three-to-five year package. He's a proven race winner, having taken 12 checkered flags over the past five seasons, but he's missed the Chase the past two years. Roush's problem is, who else is available with the same ability at the same price?
The answer is Ryan Newman, who might be looking for a change of scenery and is in the last year of his contract with Penske Racing. Newman also has 13 Cup wins, including this year's Daytona 500, but he's faded to 14th in the points and has only one top-five since then.
Newman has missed the Chase the past two years, but he's only 30 and would be worth locking in for five years.
Though five weeks have passed, Newman characterized his options thusly: "There are some options out there. Obviously, team-wise, people who have gone public about wanting to start fourth teams and other teams that are changing drivers and crew chiefs and things like that. It seems to be starting earlier than it ever has, at least in the last couple of years. I'm sitting happy in my seat right now, but that doesn't mean that I can't be happy somewhere else."
On the other end of the scale is a driver such as Martin Truex Jr., a 27-year-old with one Cup win who made the Chase last year. Dale Earnhardt Inc. wants to sign him and he says he wants to stay, so maybe he's not in the market. But things change and how quickly DEI gets his signature on a contract could be critical to retaining him.
The key to how this silly season plays out, though, is Stewart, who has been presented an offer from Haas CNC that would give him part ownership and make him, sources say, the highest paid driver in NASCAR. Stewart wants to leave, but Gibbs says it will enforce his contract for next year.
In addition to the domino effect from Stewart departing, there is an open seat for the fourth car at Richard Childress Racing to fill.
No matter how the dollars fall, it's going to be interesting to see how it all shakes out this summer. And while it's certainly going to be expensive for teams, sponsors and manufacturers, it will be lucrative for drivers.