Owning a NASCAR team can be expected to be a very hefty investment. It involves lots of expenses all of which cost a large amount of money. The expected total for owning a NASCAR team is nearly $400,000 per week which over the 38 week season is on average more than $15 million in annual expenses. BK racing, as an example, which featured two full time cars, and one car that was featured in nine races throughout the season, spent more than $18.1 million to compete in the 2016 season.
To just buy the engine and the gearboxes for the car to be able to race, these two components of the car cost $43,000 each. The most expensive part of the car however is the tires. In NASCAR because the tires are worn out and then subsequently changed so often, the cost of tires is extreme. On average, a season of racing tires costs around $225,000 which is by far the most expensive component of the car. It is estimated that on average one single race can cost more than $1.4 million, and depending on if the car needs to be replaced, it can cost even more than that. The cost of having a primary car and backup car in case the primary malfunctions is around $980,000. BK racing spent around 28% of their entire yearly spending solely on leasing the engine and buying tires. Then, the other expenses that the cars require only add to that percentage of money spent on the car which is one of the biggest expenses that owning a NASCAR team involves.
Employee expenses, as with anything that requires employees, are very high. Owning a NASCAR team involves a large amount of employees because you need a large amount of experts in many different fields. BK racing spent around 27.5% of their yearly expenses on employee wages, whether it be hourly workers, contract payroll, or driver payroll. Then, the employees need to be given the proper gear to wear during races, fire suits which cost in total around $400,000, so that they are safe, and those suits need to be drycleaned which will cost around $2,400 per race. All of these expenses continue to add up and it can be expected that employee expenses is a very large sum of money that NASCAR team owners must pay.
Additional expenses for the owner of a NASCAR team are often easily forgotten, but that does not mean that they are an insignificant amount of money or that they are not important things. Some examples of the additional expenses include, but are not limited to travel expenses, hotel expenses, car transportation expenses, and so much more. These expenses can total upwards of around $125,000 which may seem like a lot less compared to some of the other expenses that are involved in owning a NASCAR team, but it is still a lot of money. Every five years another $400,000 can be added to that $125,000 because the owner of the NASCAR team has to replace the haulers that transport the cars to the correct racetrack. This only adds more money making the cost of owning a NASCAR team that much more expensive.
NASCAR teams have often been able to make the most money and truly earn profits through advertising. Although prize money is a large sum of money, advertising, especially for the best teams, is the most effective way to make money through a NASCAR team. However, in order to get the best advertising, the NASCAR team needs to be successful enough that advertisers will want to sponsor your team. BK racing for example was not extremely successful, only placing on average 31.1 out of 40 cars, and therefore they did not have many sponsors making their prize money equal around 79% of their total income. Just like every business, the more successful the team in NASCAR the more money that the owner will make through prize money as well as through sponsorships.
The most valuable team in NASCAR is Hendrick Motorsports. Hendrick Motorsports is worth around $315 million, and it is worth much more than the second most valuable team in NASCAR which is Joe Gibbs racing, valued at $230 million. Hendrick Motorsports, owned by Rick Hendrick, has become the most valuable NASCAR team in the world because of the sustained success that they have had with their drivers. As a result, their sponsorships and prize money have been high.
The least valuable team in NASCAR is Richard Petty Motorsports which is estimated to be worth only $28 million. Richard Petty Motorsports, owned by Richard Petty, considered to be one of the greatest NASCAR drivers in the sports history, is a newer team that has not been able to make as much money as its competitors yet, but they are not significantly behind; the second least valuable NASCAR team is worth only an estimated two million dollars more.
Although owning a NASCAR team comes with a lot of expenses, and is as a result very expensive, it is a very small expense compared to the total cost of owning other racing sports teams. For example, some teams in Formula 1 racing have budgets upwards of $500 million which compared to more than $15 million makes the cost of owning a NASCAR team seem very easy. Other racing sports do cost more to own than NASCAR.
Unlike normal everyday cars, NASCAR cars are expected to be high performance cars that put stress on every component of the car. In order to be able to safely race the car, there needs to be advanced engineering which allows the components of the car to be safe enough to handle the extreme speeds that a NASCAR car is expected to go. The natural wear and tear on NASCAR cars happens extremely quickly, often taking just one race to make the car undrivable again, so replacing the car only adds to those expenses.