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Why Does NASCAR Have So Many Sponsors? (The Truth)

Running a full-time race team is not cheap, nor is putting together an entire NASCAR event. This is where sponsors come in to provide a helping hand, and luckily, NASCAR has acquired many sponsors. You may be wondering the truth behind how and why NASCAR has so many sponsors.

NASCAR has many sponsors because their individual teams would not be able to fund a full 9-month season of races without them. Sponsors will fork out tens of millions of dollars per season to fund NASCAR. However, they expect a sound return on investment, or they’ll likely leave the sport.

Below, we will dive into further detail as to why sponsors are so important in NASCAR. We will also reveal how much money sponsors spend so NASCAR teams and NASCAR itself can host their events. Lastly, we’ll answer the burning question of whether NASCAR is losing sponsorship.

Why Are Sponsors So Important In NASCAR?

Sponsors are so important in NASCAR because it is an incredibly costly sport and teams would not be able to provide funds without the aid of sponsors. Sponsors cover most, if not all, costs of a NASCAR team. Sponsors can also provide teams with better equipment and more experienced crew members.

When you play sports even as a kid, it is important to acquire sponsors to pay for minor expenses like team uniforms and equipment.When parents sign their child up to play baseball or basketball, the fees are often minute thanks to sponsors who cover most of the cost.

Parents whose kid decides to forgo the baseball diamond or basketball court in favor of something like kart racing can expect to pay substantially more money to fund the endeavor. At every level of racing, sponsors are a helpful way to pay for entry fees, maintenance, and tires.

For competitors, even at NASCAR’s Roots level, fielding a championship car becomes a difficult, costly endeavor. It is possible to field a team without sponsors, but it is not the most desirable thing. Usually, sponsors will cover most if not all the costs of running a NASCAR team, from Roots all the way to the Cup Series level.

Sponsors Do More Than Pay

Turn on a NASCAR Cup Series race on any given weekend and you will notice that all drivers have sponsors these days. Even those drivers who don’t belong to chartered NASCAR teams have someone financially fueling their endeavor. Sponsorship is usually made clear on both sides of the relationship.

Sponsors not only provide funding for the team, but they also give the driver exposure. It is likely that you’ll see commercials on television featuring a NASCAR driver. Then on the racetrack, you will see the same driver sporting the company’s name on their racecar.

The sponsor’s name or logo usually appears on the hood of the car, or perhaps on the side or towards the bottom. The exposure of the driver can make them a more familiar face on Sunday afternoons or the occasional Saturday night. In exchange, the company’s logo and name is exposed to millions of NASCAR fans.

Underfunded NASCAR Teams

Since 2016, the number of underfunded NASCAR teams have paled considerably. This is because NASCAR no longer needs to use the controversial start and park or field filler drivers, most of whom brought their plain cars to the track in hopes they would get some exposure.

Kirk Shelmerdine, who raced often between 2004 and 2006 was perhaps the most prominent under-sponsored driver. As a result, he could not afford a full-time pit crew, his tires were often donated, and he only had two part-time employees working for him.

With such little sponsorship, Shelmerdine often bought used car parts to build his cars, which were usually the slowest on the track. As a result, he failed to qualify in 14 races in 2004 and he never finished higher than 37th place.

Often, Shelmerdine and teams that found themselves in similar situations failed to finish races. Many times, NASCAR officials flagged off the track for driving well below competitive racing speeds.Like Shelmerdine, these teams often failed to qualify.

Sponsors Help Win Races

While you won’t see underfunded teams as much given the smaller numbers in a NASCAR field, you will see teams with the most funding win races and championships. The more sponsors a team has, the better off they are at all levels of NASCAR.

Better sponsored teams and organizations can afford more equipment and hire better drivers and more experienced crew members. They can also afford to field more cars, allowing them to earn more prize money per race. Teams with fewer sponsors have less to work with and will never race as fast as the top-sponsored teams.

36 teams have charters, which will get them into each race. Up to four unchartered teams can enter, and these are the teams that often finish toward the rear. However, you often see something on their hoods, meaning they can usually run the full race. This could, in time, grant these teams charters that may bring them success in the future.

How Much Do Sponsors Pay NASCAR Teams?

Sponsors pay NASCAR teams at the Cup Series level roughly $350,000 to $500,000 for each event. This can range anywhere from $12.5 million to $18 million per season. In exchange for this hefty financial support, sponsors expect a sound return on investment from the exposure.

In NASCAR’s past, Cup drivers could have used local sponsors to pay for their endeavors. However, in the 21st century, you rarely see local sponsors grace the hood and sides of a NASCAR car. Instead, many companies sponsoring NASCAR teams are among the biggest in the world. Most have landed on the Fortune 500 or other credible lists. The US Military has also sponsored NASCAR teams in the past.

Overall, NASCAR teams realize that with the cost of even running a full season at the ARCA level, they need big-time sponsorship. Even operating a single-ride team in the Truck Series will cost teams something in the lower six-figures. Teams looking to run two or more cars would need heavy financial support to cover all necessary costs.

The Numbers

For a NASCAR team at the Cup Series level, sponsors often pay $350,000 to $500,000 for each racing event.At the lower level, they can expect to pay roughly $12.5 million per season, and up to $18 million at the higher end. These numbers can fluctuate depending on what level the team races at and who is sponsoring.

You have probably noticed that the cars look pretty uniformed on the track. This is because sponsors get to choose the primary paint schemes, color schemes, and placement of their company logo on various portions of the car, mainly the hood.

The sponsors are banking on the hope that the thousands of fans in attendance and the millions watching around the world will see their logo on the moving billboards that are NASCAR cars and trucks. Haulers also have sponsors’ logos, colors, and preferred paint schemes, granting the sponsor further exposure.

Two-Way Street

It is a two-way street, and you should know that sponsors are looking for a return on investment as a tradeoff for their financial support.The exposure at the track is good, but drivers also make appearances on behalf of their sponsorship, often during the morning of race day.

A sponsor in NASCAR is no different than a company that drops $5-6 million for a 30-second ad during the NFL Super Bowl. They are forking out large amounts of money in hopes of recouping and ultimately profiting on their investment.

Therefore, sponsors will cut ties with underperforming drivers. They expect drivers to grant them necessary exposure, and that means running a competitive race. If a driver cannot fulfill their obligations, they will be clamoring to find new sponsors.

Is NASCAR Losing Sponsors?

NASCAR has been losing sponsors in recent years. In the past few years, NASCAR views and ratings have been declining. Sponsors expect a return on investment and will cut ties if performance does not reach their standards. If the ratings are too low, sponsors will not stay with NASCAR.

In recent years, NASCAR saw a decline in viewership. Between 2017 and 2021 viewership for the Daytona 500 dropped from 11.922 million in 2017 to just 4.83 million in 2021. The Great American Race brought in a 6.6 Nielsen rating in 2017, and just a 2.8 in 2021.

In March 2022 NASCAR’s ratings were continuing to drop. For the race at Auto Club, NASCAR averaged just 4.7 million viewers. For the second race of the season, it was a record-low in viewership.

As noted above, lesser performances from drivers mean less exposure and therefore fewer sponsors for that driver. The same holds true for its sanctioning organization. If NASCAR cannot find a way to increase its viewership, expect them to lose sponsors.

Sponsors Dropping NASCAR

A plethora of sponsors have cut ties with NASCAR. After 2022, Mars Inc will leave. This follows prominent companies like Lowe’s, The Home Depot, Target, Kellogg’s, Pepsico, and Red Bull. Go back 10 to 15 years, and they were familiar brands on all NASCAR tracks.

The reason for the drop-off can directly correlate with NASCAR’s waning interest. With NASCAR losing viewers and other racing organizations like IndyCar gaining viewers, what’s the point of sponsoring NASCAR even if they still have more viewers overall than IndyCar? With NASCAR’s continually declining ratings, many of these sponsors see no reason to continue working with them.

Will They Return?

Sponsors may return if NASCAR views and ratings increase once again. Sponsors will always follow the views and exposure. Therefore, if NASCAR can regain the interest of their fans and increase their ratings, it is possible that the sponsors will return.

Since 2018, NASCAR has been going through a transitional phase. In 2018, they added a third road course race: The Charlotte Roval. They also added more road course events starting in 2021. In 2022, NASCAR unveiled its Next Gen car. The car bears close resemblance to its street legal counterparts, and it is the first car to truly do so since the Generation 3 car used from 1981 until 1992.

They also utilized a revamped horsepower, aerodynamic, and downforce package designed to keep races tighter and overall, more interesting. If NASCAR proves its product is once again attracting fan interest and therefore increasing views, these sponsors may return.

Final Thoughts

NASCAR has so many sponsors because the teams could not afford to be in the sport without them. Teams and NASCAR itself need big-time sponsorship to race and host their events throughout the season on every level of NASCAR. Sponsors spend millions on NASCAR and expect a sound return on investment.