SBD/December 7, 2012/Marketing and Sponsorship

NASCAR Driver Earnings Examined: Salary Often Based On Percentage Of Sponsorships

Earnhardt Jr. earned $24M in endorsements and $4.1M in salary last year
NASCAR drivers "make their money in three primary areas -- salary, percentage of race winnings and bonuses" -- and those at the top of the sport "can significantly supplement their income with merchandise sales and personal endorsements," according to Bob Pockrass of SPORTING NEWS. NASCAR's highest-paid driver is "believed to be Dale Earnhardt Jr." Pockrass cited an SI report as showing that Earnhardt Jr. made $28.1M in '11, made up of $4.1M in salary and earnings and $24M in endorsements. NASCAR insiders "shake their heads at suggestions that any driver currently in the sport" makes more than $10M in endorsements, as "rarely does any endorsement deal eclipse a half-million unless it's a major endorsement for someone like Earnhardt." Sometimes a team will "base the salary of a driver on the team's sponsorship." NASCAR team owner Roger Penske said that sponsorships for top teams currently "bring in $12-15 million, although it is believed that top drivers can attract more sponsor dollars." Pockrass noted drivers typically "command between 30 and 50 percent of what the sponsor pays the team, with the more the sponsor pays, the more that can go to the driver." Driver Jeff Gordon said, "I feel like every driver should be paid based on the sponsorship. ... In my case, I know I'm getting a percentage and (exactly) what percentage I'm getting of the sponsorship." Pockrass noted drivers "often get 33 percent of the apparel and merchandise profits that bear their likenesses, although sometimes it's 30 percent as the team takes a little more as an administrative fee." Some drivers, if the sponsor "does not take a cut, will get 40-45 percent." Sources said that while the most popular drivers in the Sprint Cup Series can "earn more than $500,000 in merchandise sales, only a driver such as Earnhardt could crack more than $1 million a year in merchandise royalties" (SPORTINGNEWS.com, 12/4).
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