Motorsports | Analysis: As sponsorship dollars dwindle, NASCAR’s stars fade

Matt Kenset, famous NASCAR driver

Matt Kenseth, a future Hall of Famer, likely has two races left in his life as a famous NASCAR driver.

The final seat in the carousel of job options will be filled Thursday [Macau time] when Stewart-Haas Racing is expected to announce Aric Almirola as its new driver.

Yes, a two-time Daytona 500 winner and former series champion was passed over for a driver with one victory in 242 career starts. It is yet another seat that didn’t go to Kenseth, who embarrassingly has become the odd man out in a free agency period that has focused far more on salaries and sponsorship than talent.

Kenseth, who told reporters over the weekend that he will take time off in 2018, is hardly alone in his plight. Danica Patrick has nothing lined up for next year, same for reigning Daytona 500 winner Kurt Busch. Greg Biffle quietly went away at the end of last season, and Carl Edwards announced his retirement after coming 10 laps shy of winning the championship a year ago.

All but Patrick started in a robust economic period for NASCAR, where teams were flush with sponsor dollars and could basically hire any driver they wanted. Jack Roush was the fat cat in the early 2000s, and he’d hold gong-show style auditions for drivers to see who got paired with his newest open seat.

Kenseth, Busch, Biffle and Edwards all went on to become stars in Roush’s system while launching lucrative and lengthy careers.

But the math has changed considerably. Sponsors are paying far less for the right to advertise on a car during a NASCAR race, and they are increasingly difficult to get. In the days of exploding popularity, a top team might spend USD30 million to run a race car. Most of that money came from sponsorship, and top drivers were making $10 million per year.

Now owners are running teams for half of what they did 15 years ago, and driver salaries are slowly being adjusted accordingly. If a team owner can’t get a driver that financially matches the sponsorship level, then the owner has to pay expenses out of pocket.

Brad Keselowski is widely regarded as the driver of the Miller Lite car, but Team Penske last week revealed its sponsorship program for the No. 2 car in pieces, and it only includes 11 races with Miller Lite as the primary sponsor.  Discount Tire was sold the rights to be on Keselowski’s car in next year’s season-opening Daytona 500 and season finale at Homestead, as well as eight other events. The Würth Group was announced as a three-race sponsor.

Still, Penske was able to do what few others can manage right now: Put together a sponsorship package that is valuable enough for him to afford a high-priced driver.

Kenseth struck out time and again in a search that began when Joe Gibbs Racing unexpectedly told him it was bringing development driver Erik Jones in-house next season, a decision that cost the 45-year-old Kenseth a spot in the lineup.

The 19-year Cup veteran didn’t get rides at Hendrick Motorsports, which will see Dale Earnhardt Jr. and Kasey Kahne depart after the season. Alex Bowman and William Byron will allegedly drive next year for something like $500,000 in salary.

It is clear that sponsorship budgets have been decreased, reflecting in many ways television viewership for NASCAR races and attendance at various tracks. With fewer dollars coming in, car owners have to be careful to avoid paying too many expenses out of pocket. Driver salaries don’t seem to be a priority right now, and a guy like Kenseth would lose money on travel for himself, his wife and four children to some or all of the 38 races on the Cup schedule.

Earnhardt warned earlier this year that NASCAR’s financial system was in for a major reset, and it has happened faster than anyone expected.

“On a big scheme of things, I feel like things have happened quickly, but yet on the other hand, it kind of does surprise me how, you know, the reset, hasn’t been totally linear,” Kenseth recently said. “Some people have been able to make it work, some people haven’t. Certainly right now is a very interesting time.

“I think it’s a very tough time for car owners to find the money that they need to field competitive race cars with competitive personnel. I think it’s probably harder than at least it’s been since I’ve been around. And the cost is higher than when I started, as well. Certainly a challenging environment.”

Tony Stewart had been exposed to the changing NASCAR sponsorship landscape once he joined Gene Haas as co-owner of their four-car team, but even he’s been surprised at the difficulties in finding funding.

The team had a massive stock of open inventory on Clint Bowyer’s car this year, ran into a sponsorship dispute with Patrick’s backers right before the start of the season and Haas has been primarily funding Busch’s car out of pocket. For Busch to return to the team, he is likely going to accept a significant pay cut.

SHR now has Smithfield Foods coming aboard, and Almirola seems pegged to continue a driver-sponsorship relationship he began at Richard Petty Motorsports. SHR could have Kenseth or even Brickyard 400 winner Kahne, but instead is going with the driver the sponsor is already comfortable with.

Stewart is careful to note it’s not a sponsor-driven decision, though.

“I’m not hiring drivers that have money. I’ve been the route that in the dirt-track stuff. I’ve seen it, it’s not the way to run a race team,” Stewart told The Associated Press last month. “I know there’s people that have to do that to survive, but if that’s what I had to do to survive, I wouldn’t do it, it’s not worth it to me.

“I want to hire drivers that I feel like can go out and run well and win races, and if I can’t hire them on their talent, I don’t want to do it all.”

Stewart said he’d dump a car before he’d hire a driver bringing in sponsorship money. However, that’s essentially what Patrick did when she came to NASCAR with her GoDaddy Funding. When that ran out, SHR did find her new sponsorship.

Stewart believes the model needs a ton of work and the project begins with increased viewership. If ratings and attendance improve, the sponsorship dollars grow again.

Until then, NASCAR is in a cycle where drivers such as Kenseth will be sidelined next year. He finished fourth at Texas on Sunday. He’s ninth in the standings.

“You do this because you want to compete and you want to go out and try to contend for races and championships, and if you’re having to do it just to get by, there’s no fun in that,” Stewart said.  Jenna Fryer, Charlotte (N.C.), AP