NASCAR is one of the most expensive sports to venture into. It is also a sport where if the influential people and potential sponsors don’t know who you are, you’re going to struggle. Knowing this, you may therefore wonder how to start a NASCAR team.
Starting a NASCAR team costs around $14.5 million just for startup costs to compete for one season, meaning you must also attract sponsors to your team. To do this, you need to invest a lot of time in the industry, getting to know people and making connections to get your team running.
Below, we will outline how much it costs to start a NASCAR team, and where those costs come from. We will also answer the burning question of whether owning a NASCAR Cup Series team is even possible for newbies, before diving into deeper detail of how to start a NASCAR team.
How Much Does It Cost To Start A NASCAR Cup Team?
It costs around $14 million to start a NASCAR Cup Series team. This takes into account staffing costs, the costs of building and maintaining the cars, and having office and garage space. However, the costs can vary a lot depending on a multitude of different factors, and this is just an estimate.
Every business has heavy startup costs, and a NASCAR Cup team is no different. However, a NASCAR Cup team resides in the world of professional sports, and if you know anything about pro sports, it is that some teams can be worth at least nine figures. So, you can guess that starting a NASCAR team is not a cheap endeavor either.
For example, back in 1993, the NFL announced two new franchises in the Carolina Panthers and Jacksonville Jaguars, who began playing in 1995. Their startup costs? $140 million apiece. That was about $290 million in today’s money. Luckily, NASCAR is not the NFL, so it won’t cost you that much money to start a team, but what we are getting to is that you can expect to spend millions.
Why The High Costs?
Suppose you are only interested in owning a team and not operating as an owner/driver, as a few NASCAR drivers have done in the past, the most notable being Bill Elliott, Brett Bodine, Alan Kulwicki, and JD McDuffie. As owner/drivers, they barely won, with the outlier being Kulwicki, who got five career wins and even an unprecedented championship in 1992.
Acting as an owner/driver is tough, so outsourcing the job to a professional alone will cost about $200,000. You will also need about two-dozen engines, which cost at least $60,000 each, and a large list of car components. You also need tires to run full races, and while Goodyear leases and does not have teams buy tires, they still cost roughly $20,000 per race.
You will get a reprieve regarding fuel, as Sunoco does not charge NASCAR teams for fuel on race day. Sunoco, however, does not cover the cost of fuel required to haul a primary and a backup car across the country in a hauler. And speaking of NASCAR haulers, they don’t come cheap. In 2017, NASCAR haulers ran at about $400,000.
So, if you add the cost of a driver ($200,000) + a hauler ($400,000) + tires ($20,000 X 36 points-paying events) + engines (at least $60,000 X 24), you are already looking at a minimum of $2.7 million in startup costs. And that doesn’t even include staff or even most car components.
Speaking Of Staff
A NASCAR pit crew alone will cost you a lot of money, and a typical crew comprises two tire changers, one tire carrier, a jack man, a gas man, and a utility man. Since you are starting a NASCAR team, you should factor in hiring a pit crew on the low end of the spectrum in terms of cost.
Tire changers and carriers can make about $80,000. Fuelers and jack men can earn around $150,000 per season. Utility men are often the lowest-paid, and make up to $50,000 each year. So, take $240,000 for tire changers and tire carriers, add $300,000 for the jack and fuel men, and another $50,000 for the utility, giving you about $590,000 on the pit crew alone.
This doesn’t include spotters or crew chiefs, with the latter earning roughly $200,000 when they work with newer teams. Less experienced spotters often make around $90,000 through a full season, for a total of $290,000 on these jobs alone (at a minimum).
All of these expenses mean a NASCAR team can cost $4 million just for the car and staff
Your NASCAR Team’s Staff
NASCAR teams often comprise a team manager, an engine specialist, tire specialist, an aerodynamics specialist, and several mechanics. Larger NASCAR teams may max out at over 100 employees, while smaller one-car teams may have only a fraction of this. If you are starting a one car team, you will probably max out at about 25 to begin with.
We already covered the six pit crew members, driver, crew chief, and spotter. Add in the engine, tire, and aerodynamic specialists, and you are at 12 employees. A team manager makes 13, and five mechanics give you 18. You will also have a PR employee, plus a webmaster to manage your team’s website, blog, and social media pages.
The overall costs for the above positions will vary, as NASCAR mechanics can earn as low as $45,000 per year, and $65,000 per year at the high end. If you hire five mechanics, with each mechanic specializing in a different component for the car, you will fork out at least $225,000. Specialists are more advanced, so set aside $100,000 for each one you hire. These costs add another half a million to the total.
Unfortunately, the salaries of team managers and other positions on a NASCAR team that you would need are hard to estimate. These positions include an athletic director, a human resource manager, and employees responsible for business, sponsorship, and racing operations affairs.
Your best bet is to go low here, and for that you will be sacrificing cost for experience. However, as with any startup in professional auto racing, you will need to get by with what you can afford. Set yourself a budget and go from there. Go for at least a $500,000 budget to be on the safe side, which brings our current subtotal to about $5 million.
Hidden Cost To Consider
One thing to remember is that for a NASCAR Cup Series team to function, it needs to reach the race track. For most races, you will need to fly or drive your team to the site of the next NASCAR event, provide food, a hotel, and transportation to and from the hotel and to the track. Above, we listed the most common positions on a NASCAR team, but not a logistics specialist.
To find the cheapest and most convenient way to haul the cars, fly out to the track, and get there on time with little hassle, you should consider hiring one. Just like setting a budget aside for the bulk of your other staff members, you also need to set aside travel costs. If you own a one car operation, this will cost at least $150,000 in startup costs if you plan on running an entire season.
However, it is wise to err on the side of caution, so setting aside $200,000 in startup travel costs will operate as your best bet, bringing the total costs up to $5.2 million.
Cost Of A Cup Series Car
With one of your roughly 24 engines, it will cost $180,000 at the low end to build a NASCAR Cup Series car. At the high end, expect to spend $344,000. While we talked about setting budgets for minimum costs throughout this article, you should enter the NASCAR Cup Series with aspirations to field at least a somewhat competitive car if your goal is to profit.
Therefore, go for somewhere in the middle, which sits at around $260,000. Since we already factored in the engine, take away $60,000 of that total cost when you add it to the startup budget, which currently sits at about $5.2 million, meaning we’re now at about $5.5 million. You will also need a backup car in case anything happens to your primary car, so add another $200,000, giving us $5.7 million.
You also need to plan on maintaining what you have, so factor in a budget to cover inevitable maintenance costs. Maintenance estimates can cost as much as the car itself. For you and your budget NASCAR Cup Series team starting operations in Year 1, take the cost of the car without the engine or tires, giving you about $200,000 in potential weekly maintenance fees.
With 36 points-paying and three non-points-paying events, multiply $200,000 by 39, and you get $7.8 million. Chances are, you won’t use all of this, but it’s wise to factor it into your startup costs.
Our previous number was $5.7 million. Add another $7.9 million, and it gives you $13.6 million. You just need one more (main) cost for your team and you will have a solid estimate on how much it will cost you to start a Cup Series team.
You can rent office and garage space, or you can buy it outright, depending on what you are looking for. Most NASCAR teams set up shop in and around the Mooresville, North Carolina area, so you will want to look at the average costs in the region. Since you are a startup team, you also want to look for smaller office and garage space.
The average annual cost of rent for office space per square foot in the Charlotte area, where Mooresville is located, sits at about $30, but this will vary from year to year. Suppose you are looking for 800 square feet (74 square meters) of office and garage space, equaling 1,600 square feet (149 square meters). This gives us about $48,000 in annual rent costs.
Expect another couple of thousand dollars per year on utilities costs, and we’re easily adding another $50,000. Plus, this will be higher if you opt for more space or better facilities.
Overall, total startup costs if you plan on running a full season with an adequate car will be around $13.5 million to $14 million.
Is Owning A NASCAR Team Profitable?
Owning a NASCAR team can be profitable, but it’s not guaranteed. In life, there needs to be winners, but with so much competition, there will unfortunately be losers that will bow out of the game. You must ensure your NASCAR team can win, and the first step in doing so is to hire ambitious talents.
You won’t have the money to hire the best mechanics, specialists, drivers, and pit crew members in the short term. But you can hire talents who see themselves sticking around the industry. You need to factor in ambition for every hire you make, from the mechanics to the PR specialists, and from the pit crew to the driver.
Ideally, you will find talent that have credentials in their chosen field but are just breaking into the NASCAR scene. This will provide you with an excellent blend of talent without breaking the bank, and if they acclimate themselves to NASCAR fairly quickly, expect them to build you the best car, provide the best service on race day, and to help get your team’s name out there.
The more effort your team puts in behind the scenes, the more money you can expect to make. You could make every race on the schedule by purchasing one of 36 charters, but they can cost as much as $8 million. And if you can’t afford to tack on another $8 million to your $14.5 million, you will need to race without a charter!
Charters May Be Worth It
Racing without a charter gives you several disadvantages, including no set guarantee of prize money, as you’re not even guaranteed a spot on the starting grid. Up to 40 cars can start a NASCAR Cup series race, but if 42 cars show up every weekend, your team is at risk of paying its way to the track and going home with nothing to show for it.
Even teams with lesser car development can earn sound money from a charter. BK Racing is a good example, as they earned $3 million one season because their charter guaranteed them a spot in every race. While the team did not fare well in terms of results, they still earned seven figures for their efforts.
One downside to a charter is that many in the industry claim it only helps larger, more established teams like Joe Gibbs Racing and Hendrick Motorsports. However, a smaller startup team could form a technical alliance with a larger team, as 23X1 racing did with Joe Gibbs Racing.
Denny Hamlin co-owns the team with NBA legend Michael Jordan. Hamlin has driven for Joe Gibbs Racing since 2005, so a technical alliance was feasible. If you can afford to snag a charter and form a technical alliance with a larger team, you increase your chances of profiting in NASCAR.
Sponsorships Are Key
Sponsorships are perhaps the biggest money makers for NASCAR teams. They will help you cover your $14.5 million in startup costs, or $22.5 million if you are lucky enough to get a team to sell you a charter. You may already know this, but acquiring a sponsorship is not easy.
Go back throughout the history of NASCAR and you will find many examples of underfunded cars that have nothing on them but a plain paint scheme. It’s tough for new teams to sign sponsors because of the risk factor involved. Why would a sponsor take a chance on a new NASCAR team with no history when there are more established teams to sign with instead?
There are ways to convince sponsors to sign with you. One way is to have good communication skills. Getting to know people in the higher offices for a company is one way to start.
You can also try to hire a driver who has already seen some success. Even Cup Series drivers you can sign for a bargain price of $200,000 could lure a sponsor over if they had a good past relationship with one. The same may even go for a crew chief. You will do yourself a few favors in acquiring sponsorships if you are a familiar name in NASCAR by the time you start your race team.
KEY POINTS• Starting a NASCAR team is expensive, and it can cost about $14 million in Year 1
• The costs continue as the years go on, making sponsorships essential
• This means it’s not always profitable to own a NASCAR team
How To Start A NASCAR Cup Team
Learn The Business
Before you start a NASCAR Cup team, get familiar with the sanctioning body. Work for a Cup Series team or two, fulfilling various roles. Talk to people who are influential for the team you work for and learn the business. The more you understand NASCAR upfront, the easier it is to start a team.
Network, Network, Network
You should also establish sound relationships with people working for other teams, like mechanics, specialists, and pit crew members. Every connection you make is a potential funnel toward starting your own NASCAR team. And while you won’t afford that top end crew chief you became best friends with, they could point you toward someone breaking into the field.
The same holds true for spotters, crew members, and even behind-the-scenes personnel. Knowledge is power when you want to start a NASCAR team. The more people you talk to, the more resourceful you can become, and the easier it is to find the right team members for your budget. This also includes talking to people with strong connections to potential sponsors.
Become familiar with everyone influential that you come into contact with, and when the time is right, use those connections to build your first team. Use them to find sponsors, equipment, and affordable space to start your team, and you may discover that starting a NASCAR team is not as tough as you might have thought.
It Takes Time
Starting a NASCAR team is something that takes years of preparation before you set off and get things moving. Starting a Cup team requires a time investment in making connections, using the resources those connections bring, and remaining a student of the sport at all times, constantly learning better ways of doing things.
Starting a NASCAR team requires about $14 million, but when you take the time to make connections in the industry to the right people and sponsors, the process becomes much more doable. Despite the startup costs and the time it takes to start a team, it can become a profitable endeavor.