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|06-20-2008, 05:23 PM||#1|
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NASCAR's Highest Paid Drivers
No surprises, here, really....
NASCARís Highest-Earning Drivers
By Peter J. Schwartz, Forbes.com Jun 16, 3:24 am EDT
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The top-earning NASCAR drivers make more money off the racetrack than on it. Jeff Gordon, the sportís all-time leading money winner, made $32 million over the last year; $17 million came from endorsements and royalties on merchandise, and $15 million came from his salary and race winnings.
Dale Earnhardt Jr., the second-highest earner at $31 million, made $21 million from licensing and endorsement income from the likes of PepsiCo, Anheuser-Busch and Adidas. Earnhardtís passionate following, which has its origins in his famous fatherís career, has translated into an abundance of riches despite his declining performance (he won six Sprint Cup races in 2004 but only three since).
Sponsors are so eager to associate their brand with the most popular drivers that theyíre willing to invest millions in short-term deals even though their brand names are often blurred at 200 miles-per-hour. Example: In April, Subway restaurants agreed to pay race team Joe Gibbs Racing an estimated $4 million to be the primary sponsor of Tony Stewartís car for only three races this season. Of that sum, Stewart will personally pocket $700,000.
Drivers have also boosted their earnings by negotiating guarantees in their contracts that call for owners to make up the shortfall if a driver fails to earn a predetermined amount from race winnings, endorsements and merchandise royalties. Such agreements assure Joe Gibbs Racingís Kyle Busch and Denny Hamlin $10 million a year, regardless of whether they ever reach the winnerís circle.
Other drivers have ventured into direct ownership. Gordon, in addition to being Hendrick Motorsportsí highest-paid driver, is a minority owner of teammate Jimmie Johnsonís car as well as his own. Kevin Harvick owns Nationwide and Craftsman Truck Series teams, though due to escalating costs, turning a profit in NASCARís minor leagues has been difficult as of late. Tony Stewart recognized this challenge and ventured outside of NASCAR, investing in a lower-tier, open-wheel racing team that earned him an estimated $300,000 in the last year.
Then thereís Juan Pablo Montoya, who in exchange for one of NASCARís highest annual salaries Ė estimated at $6 million last season Ė retains few rights over his commercial sponsorship program. Instead, his team, Chip Ganassi Racing, reaps the lionís share of endorsement revenue generated by Montoya, who has a wide international following from his years competing on the Formula 1 circuit. Ganassi is leading NASCARís push to go global, aggressively pursuing sponsorship deals in South America, China and Dubai; a far cry from a decade ago, when the sport was almost exclusively popular in the American South.
Prize money and TV contracts go hand-in-hand. In a given race, the driversí purse is primarily fueled by 25 percent of broadcast rights fees and contributions by racetrack owners (which are made possible by their 60 percent cut of TV revenue). Last season marked the start of NASCARís new eight-year TV deals with four networks, ushering in a golden age for driversí paychecks. The networks will pay an average of $560 million a year Ė including $47 million from Fox for the Daytona 500 Ė a 21 percent increase from prior agreements.
The top five:
1. Jeff Gordon: Slideshow
2. Dale Earnhardt Jr.: Slideshow
3. Jimmie Johnson: Slideshow
4. Tony Stewart: Slideshow
5. Kasey Kahne: Slideshow
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