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The High Cost of Fielding a Racing Team

Jimmie Johnson is looking for Brickyard 400 win number five. [John Wiedemann Photo]

Jimmie Johnson won’t have the Lowe’s sponsorship on the hood following the 2018 season.  [John Wiedemann Photo]

 

Turk’s Tracks – A Few Loose Lug Nuts from Pit Row

By Gene Turk

 
March turned out to have some very interesting news released that wasn’t all good. To start,I was shocked to find out that Lowe’s will end their sponsorship with Jimmie Johnson and the number 48 team at the end of this year’s season. Lowe’s and the number 48 team has had one of the longest running sponsorship with one car,one driver, and one team in the history of NASCAR. Lowe’s has sponsored Jimmie Johnson since 2001. A spokesperson for Lowe’s commented that sponsoring Jimmie Johnson was like “winning the lottery”. Since teaming up with Lowe’s, Jimmie Johnson has 83 wins and 7 championships. I believe that Jimmie Johnson will get into the NASCAR HALL of FAME on the first vote after he announces his retirement. Some of his fellow drivers consider him the best driver that NASCAR has ever seen. It will be interesting as to when and who will be the number 48 team’s next sponsor.

Although this news is not good for the 48 team, it really is not that surprising. We have seem one major sponsor after another pull out of NASCAR. Just a few examples are Aflac, BB+T, Carhartt, GM Goodwrench, GoDaddy, Hardees, Office Depot, Purolator, Hooters, Western Union, Wal-Mart,National Guard, BP, Amoco, Haveline, Zerox.

 Another big news event was the announcement that BK Racing has filed for bankruptcy. BK Racing is a low funded team that was trying to stay afloat with little sponsorship. BK racing is fielding car number 23 with Gray Gaulding as the driver. BK Racing has also fielded cars number 26 and 83. However,not all three cars have raced in all the races at the same time.

The basis for the bankruptcy filing is that Union Bank and Trust claims that BK racing owes them 9.1 million dollars on a loan.The team lost 11 million dollars in 2014,10.1 million in 2015 and 8.45 million in 2016. They were trying to survive on just 1.055 million dollars in sponsorship in 2015 and 1.513 million in 2016. BK Racing claims their race winnings in 2016 was 7.82 million dollars. On a fully funded team,the sponsorship money far exceeds the winning money. BK Racing has listed their total expenses in 2016 as 18.144 million dollars. Thus,expenses were twice of revenue.

Because of this bankruptcy filing,BK Racing was required to make all of their expenses public. I have decided to share those details of expenses so you can have a better understanding into the high cost of fielding a racing team. The costs are as follows:

 Payroll and wages   5.896 million
 Engine lease-          4.093 million
 Tires-                       1.916 million
 Travel-                     1.801 million
 Enter fees/licenses-  $572.472
 Transmissions-         $ 292,512
 Brakes-                     $ 162,494
 Decals-                     $138,880

So there we have all the costs. The best guess is it takes approximately 30 million dollars to fully sponsor a NASCAR team.

After I looked at these numbers, I have come to the conclusion that I am in the wrong line of work. I’m going to be a brake salesman and get the decal business. In no time at all I’ll be able to buy that island in the South Pacific and retire in style.

In 2017,a report came out that attendance and viewership was declining. It looks like that trend is to continue in 2018. The latest news out of the Fontana race indicates a drop in viewership by approximately 22% and a drop in rating of 25%. Not good news for someone that wants to sponsor a race team. Seems like the old quote rings true”if you want to make a million dollars in racing,start with two million”. The real question now becomes, “Has NASCAR simply become too expensive to continue to survive at these present levels of expenses?
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Gene Turk was born with racing in his blood. At age 8 he started racing Quarter Midgets as member of the Great Milwaukee Quarter Midget club. For five years he raced the #7 car that his father built. He then graduated from the Milwaukee School of Engineering (MSOE) with a degree in Industrial Engineering and Internal Combustion Engineering.

While in college he obtained his Private Pilot’s License.

Along the way he has attended numerous Indy car and stock car races at the Milwaukee Mile during the 60s, 70sand 80s along with area Midget car races. He would also frequently fly to the Brickyard to watch the Indy 500 time trials in the 60s and 70s and more recently attended the 2014 Indy 500.

He has also attended numerous sports car and NASCAR races at Elkhart Lake Road America. Finally, Gene has owned many classic cars including his present 1990 Corvette and is a self-described “Gear Head.”