Building a racing team is more difficult than most can imagine. However, as tough as it is to build one, it’s even tougher to sustain one. For NASCAR owners, the brutal truth is becoming impossible to ignore: even the most successful teams barely break even, and many lose money year after year.
How Do NASCAR Teams Actually Make Money?
Recent discussions about NASCAR teams’ financial sustainability have intensified, particularly as the sport’s legal battle with 23XI Racing and Front Row Motorsports shed more light on the economic challenges facing teams, especially the smaller ones.
Several team owners and other prominent sports figures have vouched for the complexity of running a successful NASCAR team. NASCAR legend Kenny Wallace recently joined the conversation when he bluntly explained how NASCAR teams made money.
Wallace is famous for his hot takes on the latest developments in NASCAR, often sharing his thoughts on his show “Coffee with Kenny”. The former driver stays active on social media and frequently interacts with his fans.
Recently, a fan asked Wallace how NASCAR teams made money and how they survived on extremely slim margins. They asked:
“Hey @Kenny_Wallace, can you do a ‘Coffee with Kenny,’ and explain to all of us why NASCAR teams make no money. As a fan, I tend to think most of us are like, there is no way that’s true, otherwise, why even have a team? I’ve heard Gordon and Dale Jr. say this. How can that be and why even have a team!?”
When Wallace came across the question, he answered it without sugarcoating and explained precisely how the financial model worked for NASCAR teams.
He began, “You only make money through sponsorship and winning.”
Wallace then pointed to a specific scenario to give fans a better perspective on the earnings of a non-winning team. He continued, “If you finish fifth in the Daytona 500, the amount of money you’re rewarded is not enough to pay the bills.”
While Wallace gave his take on NASCAR teams’ financial earnings, he didn’t address the fans’ reference to Dale Earnhardt Jr. and Jeff Gordon. Since retiring as drivers, Earnhardt and Gordon have stepped into executive roles and gained firsthand knowledge of NASCAR team operations.
What Do Dale Earnhardt Jr. And Jeff Gordon Say About Team Finances?
When Gordon sat down with Earnhardt and discussed his career after racing, the four-time champion revealed how difficult it was to sustain a race team financially. He even opened up about the books at Hendrick Motorsports and said:
“These discussions are not just about splitting revenues, right. It’s about how we look at the business value of a race team and build enterprise value, be more collaborative with NASCAR in how we come up with ideas that grow the sport, and bring in new fans. We’re still very heavily reliant on sponsor income… We don’t make money. I don’t think Hendrick Motorsports has made a profit in 10 years.”
The revelation that even Hendrick Motorsports, one of NASCAR’s most successful organizations, struggles to turn a profit illustrates the depth of the sport’s financial challenges.
ALSO READ: NASCAR Veteran Kenny Wallace Spills Rare Story From Early Career Duel With Jeff Gordon
Earnhardt has opened up on several occasions about the difficulty of making money as a racing team. In an episode of his podcast “Dale Jr. Download” from last year, the NASCAR Hall of Famer described exactly how little money teams made. He said:
“I’ve never made any money racing. I would love to know where somebody is racing a race car and making money. It ain’t happened in my life. And every Cup team I’ve ever known didn’t make money.”
Despite these financial realities, passion for the sport continues to drive most teams forward, even when facing ongoing economic challenges. While the big players might manage to stay afloat for years without turning a profit, the real struggle falls on the smaller teams’ shoulders, who often operate with even tighter margins and fewer resources.