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Veteran Drivers Being Displaced by Cheaper Labor

| Senior Writer, RacinToday.com Saturday, August 12 2017

Matt Kenseth is looking for work. Is he a victim of teams slashing salaries under new NASCAR economics? (RacinToday/HHP file photo by Rusty Jarrett)

By John Sturbin | Senior Writer
RacinToday.com

The current lame duck status of longtime NASCAR Cup Series regulars Kasey Kahne and Matt Kenseth, and the unsettled future of Kurt Busch, might best be summed-up in one word:

Recalculate!

As the Monster Energy NASCAR Cup Series winds toward the conclusion of its 26-race regular season and the impending 10-race playoff, Silly Season could become a serious job search for a handful of veterans ousted by younger talent.

Kenseth, the 2003 Cup champion with Roush Fenway Racing, announced earlier this summer he would not be returning to Joe Gibbs Racing’s No. 20 Toyota Camry after the 2017 season. Kenseth will be replaced by Erik Jones, a Cup rookie currently competing in Furniture Row Racing’s No. 77 Camry as a satellite operation of JGR.

On Monday, Kahne’s nearly six-year tenure at Hendrick Motorsports similarly was put on end -of-season notice. Wednesday, team-owner Rick Hendrick introduced NASCAR Xfinity Series wunderkind William Byron as the next driver of the No. 5 Chevrolet, intent on restoring the car/number popularized by two-time Cup champion “Texas” Terry Labonte to title-contending status.

Busch, the 2004 Cup champion also with Roush Fenway, may or may not re-sign with Stewart-Haas Racing…despite winning the season-opening Daytona 500, NASCAR’s so-called Super Bowl.

And of course, one of the most sough-after rides in Cup was taken off the board when Hendrick named journeyman Alex Bowman to replace superstar Dale Earnhardt Jr. in the No. 88 Chevrolet in 2018, when Junior joins NBC’s NASCAR announcing team.

So, what’s at the root of this particular changing of the guard? Dale Junior offered his opinion last Saturday at Watkins Glen International, two days before Kahne’s pink slip was announced to the public.

“A lot of these young drivers are taking smaller contracts,” Junior said. “You’ve got to look at guys like myself. There’s sort of been a major shift in how much drivers are getting paid…with the new agreement we had a couple of years ago. Drivers started taking more of the purse. I don’t know everybody’s contract situation, but there is a less of a base and more purse-driven.

“One thing that’s changed is that you’ve got a lot of young guys coming in being offered and accepting contracts that are a fifth to a tenth of what veterans are getting paid. And, that’s money that can go into the team, you know? These sponsors aren’t giving teams the money that they used to. So, the owners and everybody’s got to take a little cut. Everybody’s got to dial it back. Everybody’s got to realize that they have to accept some of that fallback and difference.

“And that’s the same with the drivers’ contracts. A lot of these veteran drivers are getting paid multi-million dollars; and a lot of these guys coming in are getting a fraction of that.”

Junior certainly is well-versed in the makeup of multi-million-dollar contracts. According to Forbes, Dale Jr. takes in an annual salary of more than $10-million. Including income from merchandise sales and endorsements, Junior is expected to earn approximately $25-million in 2017, his 18th in Cup, which will raise his career earnings total to $410-million. That will place him second all-time to four-time Cup champion and former HMS teammate Sir Jeff Gordon, who turned the No. 24 Chevrolet into an ATM paying out $425-million during a 23-year career.

When Dale Jr. joined the Hendrick stable from Dale Earnhardt Inc. in 2008, his earnings shot from $20-million to $25-million annually past $30-million.

“Somewhere in a quote years ago, I do believe I admitted to being overpaid,” Junior said, a comment that elicited laughter from himself and the media in attendance. ”But I wasn’t going to complain.”

Junior currently is fielding the No. 9 Chevrolet Byron is driving in the Xfinity Series for JR Motorsports, a satellite organization of Hendrick Motorsports. In 2016, Byron, now 19, won seven races in the NASCAR Camping World Truck Series. This year, the Charlotte, N.C., native moved to the Xfinity Series, where he already has earned three wins _ Iowa, Daytona and Indianapolis _ and currently ranks second in the standings prior to Saturday’s event at Mid-Ohio Sports Car Course.

Junior laid out scenario typically facing team-owners like Gibbs, Hendrick, Tony Stewart and Gene Haas.

“Well, when you look at it, you’ve got a car, right? Say we all are sitting here with race cars and nobody to drive them,” Junior said. “You’ve got a guy that you think has got a lot of talent, very young, a lot of potential. And then you’ve got a veteran who is established. But he wants three, four, five or six times the amount of money. You’re going to go with the younger guy because it’s a better deal financially.

“So, that’s something that I think is transitioning in the sport. It took a while but when we had our major reset when the recession hit and everything sort of changed and the value of everything changed, the trickle-down effect, I think, is coming down through the drivers’ contracts and it’s making a big difference in the decisions these owners are making. You can’t pay a driver $5-to-$8-million dollars a year if you ain’t got but $10-million worth of sponsorship. That ain’t going to work. Guys aren’t getting $20, $30, $40-million a year on sponsorship. Owners aren’t getting that anymore. Drivers are having to sort of understand that change is coming down the pike (and) if it hasn’t happened to them yet, it’s going to happen to them.

“And the young guys, they don’t know any better. They want to race and they’re taking whatever they can get. That’s a good change for the owners. That’s a shift that’s going to be better for the sport and get those salaries into a realistic range for how much money we have from corporate America.  All those things have to change, you know? Drivers’ salaries included.

“And yeah, all those drivers out there in the garage are going to say, ‘That’s easy for him to say!’^”

For example, look up SHR’s Kevin Harvick for his recent incendiary comments on Junior’s Cup resume and how he has “stunted” the growth of the sport.

For his part, Hendrick said he offered the No. 5 ride to Byron during a meeting last Sunday night.

“He didn’t know why we were meeting,” Hendrick said during a national teleconference. “I said, ‘William, how would you like…are you ready, would you like to drive in Cup next year?’And he said, ‘I’m ready.’ I mean, there was no hesitation. It was a special moment, he had his dad with him, Marshall Carlson was over at the house and just to see his face and the excitement there. Those were the real special moments when you can break the news.”

Hendrick specifically asked if the Byron promotion was a “reset” in terms of finances and sponsorship.

“We’re always, as a sport, looking for ways to save money,” said Hendrick, who will see Axalta and Liberty University follow Byron into the Cup Series as primary sponsors. “So the cost to race has gone up and that’s no secret, all the team owners _ and NASCAR _ are looking for ways to save some money. Usually if you can work with people you work with off the track, it’s a lot easier. We’re fortunate we’ve got some good partners that have been with us and been with us a long time.

“In our business, we just want to win. Our brand is all about trying to win races and grow for the future. I plan to be in this a long time. I’m real excited about having a guy that’s won as much as William has. I love the dedication that he’s shown and Chase (Elliott) and then Alex. I think we’re positioning ourselves for the future. We want to be here, I’ve been in it a long time and I want to see our organization grow and grow with these talented drivers.”

While Kahne won the prestigious Brickyard 400 at Indianapolis Motor Speedway last month to qualify for the postseason, the No. 5 team admittedly has underperformed.

“I have to take responsibility for that,” Hendrick said. “For whatever reason we have not performed in that car. I’ll take the blame myself for whatever reason. We just haven’t gotten the job done like we should. Sometimes when you have those situations you just have to change something up to get a fresh start. I take responsibility for that. I’m not blaming anybody, crew chief or driver. For whatever reason we weren’t hitting it.

“I have an obligation to Kasey, so I’m paying two drivers and I’m also trying to help Kasey in another situation that we could be involved with helping another team. Therefore, it’s not so much the money, it’s about the future and building for the future, getting a fresh start. We talked to people, we got close to some deals, we had some deals that drug out too long and it wasn’t fair to Kasey or me.”

Kahne, 37, has been with the team for five and a-half seasons. During that time he has won six races; he has won a total of 18 Cup races.

“Kasey and I talked constantly about having a deadline to have something done,” Hendrick said. “But when William is running like William is running, for me, I don’t do this for the money. I do this to win and it’s our brand. I’m investing in the future all the time. I signed William with no sponsors and was going to run him regardless and that’s been the plan with Chase, with William, with Jeff Gordon _ that’s been the history of our company.”

Hendrick declined to name the team(s) he is negotiating with on Kahne’s behalf. “I know there are several situations that we’re talking to, kind of an alliance, which would be good for everyone,” Hendrick said. “We’re working on it, we’ve been working on it, and we’ll just see how it develops.”

Recall that Byron is not all that far removed from the Halloween night when he went trick or treating in his Charlotte neighborhood.  “It makes me feel real old to remember when I first met William,” Hendrick said in an interview last summer. “He was trick or treating at my granddaughter’s house, and then he went to Jimmie Johnson’s house right around the corner.”

Byron said he doesn’t remember the costume he was wearing that night. “But I have the pillow case (satchel) that has Jimmie’s signature on it,” said William, referring to Johnson. “And I remember going to school the next day and nobody believed me. It was just really cool.”

Wednesday, Byron said racing in Cup for “Mr. H” as teammate to seven-time/reigning series champ Johnson will accelerate his learning curve _ one which already has surprised himself.

“It’s definitely surprising. I didn’t expect it out of myself,” Byron said. “I feel like I’ve put the work into it and I’m learning on the job. That’s been the biggest thing for me is to learn from the best people I can have around me. So I have a lot of good people around me and I’m going to continue that. That’s what I was so excited about when I signed with (Hendrick Motorsports) last year.

“As a kid, this is the race shop that I would drive by and look in the windows. Actually, in the Nos. 5/24 (shop), they have the window there and I would walk up to that. So it’s pretty cool to be on the other side of it next year.

“I think definitely it’s (Cup) the top level of racing here and really everything that I’ve watched as a kid. It’s definitely going to be intense and you’re going to have to match that intensity. But I feel like I’ve got great people around me and I’ve got really a golden opportunity here at Hendrick Motorsports. For me it’s going to be a lot of fun, it’s going to be challenging at times, but I know that and I’m prepared for that. I just look forward to racing those guys and learning from them.”

Hendrick advised his latest protégé not to get ahead of himself. “Just focus on the job at-hand and let us worry about the rest of it, but try to win that championship,” said Hendrick, referring to the Xfinity title. “JRM has done an unbelievable job of putting together our goal up there to grow young crew members and grow crew chiefs, grow drivers.

“You look at the track record all the way back to Brad (Keselowski), Chase and now William. It’s hard to believe that it was just about a year ago at Bristol (Motor Speedway) that William and I went into the media center and everybody was asking me, ‘You think he’s ready for Xfinity? He’s been in the Truck Series. Do you think he’s ready? He’s kind of young.’ Now, one year later, we’re talking about the Cup Series. I think that speaks to his talent. You can’t teach speed and you can’t train talent and he’s got all those other qualities _ smart, dedicated, cultured _ just work ethic. He’s got the whole package.”

 

| Senior Writer, RacinToday.com Saturday, August 12 2017
One Comment

One Comment »

  • salb says:

    I don’t know why everyone is acting as if this is a big surprise. Veterans have always gotten better pay than the ‘up and comers’…its’ just that then new kids are so much younger now. I can’t think of any business or profession that isn’t expected to pay those with more experience or a proven record of success more money.

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