Tommy Joe Martins, 30, is a driver in the Xfinity Series and Camping World Truck Series. His family’s race team, Martins Motorsports, currently fields entries in the Truck Series.
By Tommy Joe Martins
When NASCAR announced a 10-year, $8.2 billion television rights package with NBC and FOX in 2013, it became perhaps the greatest TV deal in the history of sports.
At the time the deal was signed, NASCAR Cup events averaged a 5-plus rating — and now that number is down to less than 3. But no matter the ratings, that $8.2 billion, long-term contract is locked in.
NASCAR hit the lottery and Brian France bought the ticket. He and his team deserve plenty of credit for negotiating a superb deal.
But how that average of $820 million per year is split has been a topic of much discussion lately — with Denny Hamlin among the recent voices to question the arrangement.
NASCAR gets 10 percent, so let’s round off and say that’s $80 million per year. The tracks get 65 percent — roughly $530 million — and if that sounds like a lot, then you’re not the only one that thought so.
I’m not going to act like I know the first thing about the expenses of running a racetrack. So for now, let’s just assume they need every dollar of it.
The teams get the remaining 25 percent of the deal, which is roughly $200 million per year — and that’s distributed through the purse money for each race. That money is then split again among the top three national series. And if you’re not sitting down, you’re going to want to before you read this next part.
As of 2014, the Cup Series got 93.75 percent of the team cut. NINETY-THREE PERCENT. The Xfinity Series got a whopping 5.75 percent (although maybe that wasn’t seen as a big deal since almost half of the Xfinity field is made from Cup teams or affiliates).
But the Truck Series? It got an almost unimaginable 0.5 percent. Half of a freaking percent. That worked out to roughly $1,000 per race, per team.
The entry fee alone for the Truck Series is $1,650 per race.
Thankfully, that horrendous split got restructured in 2015. But best I can tell, the Truck Series still only receives around a 2 percent take. Not exactly the jump we were looking for.
My family’s team, Martins Motorsports, received roughly $14,000 per race in prize money last season. A set of Goodyear tires costs roughly $2,300 per set, and we’re allotted five sets on most race weekends ($11,500). If we didn’t buy used tires from other teams, we’d be broke in a month.
Clearly, there needs to be a change. The goal should be to make teams profitable. Just like teams in every other pro sports league, NASCAR teams should operate in the green.
Now, that’s not to say that team ownership should be lucrative. For a team to do that, it’s always going to take sponsorship. I want small teams to be able to eke out a small profit — around 10 percent each year. It costs a LOT of money to start a NASCAR team. With equipment purchases, engine costs, shop expenses and weekly salaries, the initial investment is massive before ever receiving an awards check from the racetrack. There should be a return on that investment.
So how do we make the adjustment? I think the TV ratings are a good place to start. The ratings for this season are public knowledge, but I did the math for you. The averages are: Cup 2.8, Xfinity 0.8, Trucks 0.4. Theoretically, a TV revenue split based on ratings could be: 70 percent Cup, 20 percent Xfinity, 10 percent Trucks.
That wouldn’t change much for big teams. They don’t count on the prize money to balance the budget — it only makes up 15-20 percent of their income. A reduction to 15 percent of their income isn’t a big deal.
Taking the charter-weighted math out of it (I don’t even want to try; I’m struggling enough as is), each of the 40 Cup teams would still get roughly $3.5 million from the 36 points races. Factor in traditional prize money at only $30,000 per race (and I’m sure I’m low on that number), and that makes for a $4.58 million dollar budget.
Assuming they qualified for all 33 races, Xfinity teams would earn roughly $1 million from the TV money alone. That would be a huge increase from the current deal, and that doesn’t account for traditional track-paid prize money. Let’s say that’s around $15,000 per team, and would make a $1.25 million budget for each team.
It would be an even bigger deal for Truck teams. A $625,000 TV share would be close to double the total prize money our team won in 2015. Factor in $10,000 per race in traditional purse monies (which I’ve averaged out over the past two Truck Series seasons), and that would make for an $855,000 budget per team.
Big teams would tell you that’s not even close to enough cash to run a team for a season. For example, the Lilly’s sponsorship for Roush Fenway’s Xfinity team was reported at $10 million per year — $5 million competition, $5 million activation, while Cup sponsorships can range anywhere from $5 million to $35 million.
So when those teams say this wouldn’t make a difference for them, they’re not wrong. The prize money I’m talking about isn’t enough to run their teams for the season.
Rich teams will always be the best teams. They have the best facilities. They have the best people (because they can pay them more). They have more people and resources. So of course their costs are going to be higher.
But those aren’t necessary costs. They’re optional, self-inflicted costs. If you want to be a big team and you have the money, go for it! Money will always help in motorsports. But you shouldn’t have to spend big money to be successful. And sponsors should be a luxury, not a necessity to break even!
Can you imagine if the Minnesota Twins shut down because Target decided not to sponsor the team’s stadium anymore?
Small teams should always be the backbone of the sport, and if they’re financially viable on their own, they can develop talent for big teams to eventually steal away. And I don’t mean that as a negative thing. That’s no different than how the Yankees treat the rest of baseball. But the Yankees also don’t win every year, and nobody brings $5 million to play first base for New York.
Here’s a scenario: A small team takes a chance on an unproven, talented driver. Maybe they’re discovered in a Late Model or a sprint car. He or she does great, attracts a sponsor, makes the team and driver some money — and at the end, the driver gets a great offer from a better team.
Here’s another: A big team cuts a veteran loose, so the small team picks them up. The team gets a great leader to help develop their program and an experienced driver to take care of equipment and a name to sell to potential sponsors.
But right now, NASCAR owners have their hands tied. With the financial model we’re currently under, those scenarios are becoming rarer because driver talent is a secondary attribute — and that’s never going to work long term. Quality, veteran drivers are losing rides because they don’t have the funding behind them to balance the budget. Meanwhile, unproven drivers are getting top-flight rides because they have the financial backing.
It’s backward. We need to reward the people that invest in this sport with the power to control their team’s future — not have it decided by outside money like a sponsor or a funded driver.
NASCAR isn’t dying. Far from it. As a sport, we’ve never had more money flowing through the garage area in our history. We’ve got a die-hard fan base that we’re making some great strides to reconnect with.
But we’re never going to be where we want to be unless that kid at the local short track knows that if they keep winning, they’re going to get a shot in the big leagues.
The cream should rise to the top. It’s the same dream all of us have had since we first fell in love with this sport — or any sport — and it needs to come true again.
How this could work
Below are some hypothetical budgets of Cup, Xfinity and Truck Series teams, all under the current schedule and all of which would wind up with a profit at the end of the year.
These budgets assume five things:
1. All budgets assume teams own all necessary equipment.
2. No crash damage cost has been added (from my experience, if you tear up
race cars, you’re always going to be over budget).
3. Races are shortened, tire prices adjusted, or some other form of savings in
the tire budget (bias ply tires, just saying) to keep Xfinity and Truck teams from
spending the full $10,000-$12,000 per race on rubber.
4. Spec motors are used in Trucks and Xfinity competition – drastically reducing operating cost after initial purchase.
5. Travel budgets are kept light by the team driving to most events.