It has been three months since Kyle Busch told reporters he wanted his contract extension with Joe Gibbs Racing done “yesterday,” and that extension has still not been completed.
Busch is the most accomplished active driver in the NASCAR Cup Series, and JGR is consistently one of the best teams in the garage. Both parties want to continue their relationship, which has netted two championships and 56 wins at the Cup level.
And I’m sure both parties are aware the grass isn’t always greener on the other side. The next driver of the No. 18 (which, let’s be honest, would probably be Ty Gibbs should Busch leave) might not have as much success as the future NASCAR Hall of Famer. And they certainly wouldn’t sell as much merchandise, have a documentary made about them or field a NASCAR Camping World Truck Series team for Toyota to grow its talent. Not right away, at least.
Top-tier rides are also hard to come by, so Busch would be taking a huge risk. Sure, Stewart-Haas Racing supposedly has a seat open, but that team only has two wins in the past two seasons. It’s going to take a lot of work to get SHR back to JGR’s level.
So why can’t Busch and JGR both just sign the dotted line and maintain their union?
The two big issues appear to be sponsorship and salary.
Even though the team has known all season that Mars, Inc. is leaving at the end of 2022, replacing such a gigantic sponsor is easier said than done. A short while ago, it seemed like the team was close to landing a sponsor. But recent quotes from Toyota Racing Development President David Wilson indicate that the sponsor fell through.
“I wish I could handicap it for you … but I just can’t,” Wilson told NBC Sports. “We’re in a bad place right now. … We’ve got some tremendously heavy lifting in front of us.”
Busch may get booed at driver introductions, but he’s consistently voted as one of the most popular drivers in Cup. He’s one of the few drivers casual sports fans will know and the only active multi-time champion. When someone of his caliber can’t land a sponsor, it’s a bad sign for the rest of the NASCAR.
Sure, Chase Elliott just signed an extension with NAPA, but it seems there is a business-to-business aspect between the sponsor and Hendrick Motorsports.
I think they are saying that without the ability to leverage B2B it’s extremely difficult.
— Denny Hamlin (@dennyhamlin) July 21, 2022
A huge reason Busch and JGR can’t find a sponsor? The asking price is too high. The days of teams getting eight figures from a single sponsor are nearly extinct. I’d bet the team wouldn’t have nearly as much sponsor drama if it sliced down the sponsorship price.
But JGR has to make money, as the team should. And it ain’t cheap to field a winning race team. So if it’s not getting eight figures in sponsorship for a car, it’s not making money.
The team is probably trying to lower the sponsor asking price by lowering Busch’s salary. And Busch’s camp is probably firmly against a pay cut, and you can’t blame it given Busch’s resume.
If NASCAR’s financials worked similarly to other sports, Busch’s salary would at least be in the top five. He may even be the highest paid driver.
But in NASCAR, the teams make majority of their money off of sponsorship. And if the No. 18 team can’t land a sponsor to cover Busch’s salary, it can’t afford to pay him.
A few years down the road, when the next TV contracts are signed, this business model may change. The TV money will probably increase, based on the trends of other sports. Additionally, 23XI Racing’s leadership as well as others are pushing for the teams to get a bigger slice of the money pie. The hope is when that deal happens, the TV money will be the main funder of the teams and sponsorship will just be an added bonus.
But that won’t be for a few more years, which does nothing to help the JGR-Busch standoff. And even though I wrote earlier this season that Busch would more than likely be back in the No. 18, the possibility that he may not be grows stronger and stronger by the week. Unless a sponsor emerges in the 11th hour, it’s hard to imagine either party calling the other’s bluff.
It wouldn’t be the first time JGR let a Hall of Fame talent walk away over not being able to get a contract done. The team replaced Matt Kenseth with Erik Jones, who it paid a fraction of what Kenseth wanted.
JGR could significantly cut costs by putting Gibbs in the No. 18. Plus Gibbs brings some sponsorship from Monster Energy. And if you’re Joe Gibbs, isn’t that deep down the car you want your grandson to end up in anyways?
The only problem with promoting Ty Gibbs now is what happens if Martin Truex Jr. retires after next season and all his sponsors leave. Who replaces him? JGR runs the risk of losing two superstars in two years.
Without a new sponsor entering the picture, it’s really hard to see a situation where Busch gets everything he wants. It seems like he’s either going to have to take a pay cut or leave.
It would sort of be a step down, but SHR is probably the only team that can pay Busch what he deserves. And it can do it without landing a major sponsor, as Gene Haas could foot the bill through Haas CNC, like he currently does a lot of the time for the No. 41 car.
But the problem is SHR and Busch would need Ford to step up and support Kyle Busch Motorsports. Ford’s development program does need a shot in the arm, and TRD isn’t utilizing KBM as much recently (Gibbs and Sammy Smith both skipped Trucks), so maybe Busch could actually come out ahead on that deal.
Trackhouse Racing Team is the only other team I could maybe see putting up the money to get Busch. Justin Marks‘ squad has a knack for attracting sponsors, so maybe it can do what JGR hasn’t yet. But the team would also have to expand and buy a charter in order to do that, unless it wants to screw over Ross Chastain or Daniel Suarez.
It’s really hard to predict how this Busch-JGR saga will play out. Could this really be the end of one of the greatest partnerships of the playoff era?
About the author
Michael Massie is a writer for Frontstretch. Massie, a Richmond, Va. native, has been a NASCAR superfan since childhood, when he frequented races at Richmond International Raceway. Massie is a lover of short track racing and travels around to the ones in his region. Outside of motorsports, the Virginia Tech grad can be seen cheering on his beloved Hokies.
A daily email update (Monday through Friday) providing racing news, commentary, features, and information from Frontstretch.com
We hate spam. Your email address will not be sold or shared with anyone else.
Here’s the way this looks to me. Probably, the reason they’re having so much trouble, (other than the $$) is he’s looking like a place holder for Gibbs.
So we’re talking a short time deal, not enough time for the sponsor to really.
Get full value from their investment. Don’t forget sponsors have other expenses as well. They have to shoot commercials, & tv time to air them, have promotions, etc.
If I was doing this, If, & that’s the big if, you could convince Kyle to reduce his $$ demands. Then you take a new number to Mars, & they get to reap the publicity & hype for his farewell tour.
After all, Mars has generated a significant sum for Kyle, so a little payback sounds reasonable given the situation.
This problem isn’t going to be unique for Kyle. With the good prospects in the pipeline. This will be faced by other high salaried veterans, in their waning years.
Mars made the decision based on the desire to take their marketing program a different way. The first clue is when they made the lady M&M characters “less sexy” and toned down their “costumes”. Smells of new blood in the Mars marketing department …and they can’t make a name for themselves doing the same old successful campaign. Look for even more changes at Mars.
Sometimes a business can’t afford to pay an employee what he deserves and sometimes an employee prices himself out of a job.
Wouldn’t it be interesting if the Saudi Sovereign Wealth Fund decided to enter stock car racing like they have recently done with pro golf.
Say the Saudi’s bought out SRX from Tony Stewart, but kept him on as the COO with their TV deal intact. Then the wealth fund could start offering huge guaranteed money deals to star drivers like Kyle Busch. The attraction to drivers would be strong since SRX runs a short 10-race swing as opposed to the brutal 40 week season run by NASCAR.. And there would be no need for demanding sponsors, giving drivers more time at home instead of flying off to the forced glad-handing events that they do today,
If NASCAR, their tracks and team owners aren’t paying attention to what is happening in pro golf, they might be in a heap of trouble in the future.
So what ever happened to all the hoopla about how this new car was going to save these teams all this money building cars for different tracks and limiting the number of cars each team could have per car number? That doesn’t seem to have played any part in this conversation as far as how much spnsorship is required with these so called pared-down costs ? Yes its year one of the new car at there must certainly be some ramp up cost to competitiely race a completely new car, but the contract / deal in question is for 2023 and I don’t ever hear or rerad anything in the press about how lower sponsirship targets can be set going forward if it is really true that the competitive side of the sport can be managed more economically. Or was that all just a line of PR BS to get all of us all jazzed about the new car?
If you like your health care plan, you can keep your health care plan.
Remember Brian France’s notorious “Car of Tomorrow”, which was supposed to be a big cost saver for teams? That didn’t happen. Instead, the auto manufacturers started making noises about leaving because the cars were only differentiated by decals. When Dodge decided to bolt (ironically in a championship year), the whole COT fiasco came to a screeching halt.
The money savings for teams with this new “Next Gen” car was the teams being able to eliminate most of the fabricators from their payrolls, But this is just a one-time cost benefit and is probably offset by the higher recurring costs of paying for NASCAR’s spec cars.
Something is going to have to give here. If I was Kyle I sure wouldn’t be trusting reverend Joe’s words or intentions. Mars isn’t coming back so forget that one. This could really turn out a whole lot of different ways. I think Kyle is going to get the short end of the stick here. Counting this season, he has 4 wins in the last 3 years.
Just wondering, with ratings and attendance much lower than when the last TV contract was negotiated, isn’t there a possibility that the pie might be smaller this time? If so, then giving the teams a bigger share might not amount to much. A bigger slice of a smaller pie.
I am sure this, is a large part of why Hamlin wasn’t interested in driving for his own team. If FedEx were to leave, he’d be in the same boat. Maybe even worse since he is 41 and Busch is only 37.
Attendance has been flat and ratings have been improving especially this year up over 10%. Other than both taking a big hit the year Jr. retired the whole narrative about NASCAR dying a slow death have been a complete fabrication.
That’s not to say certain tracks haven’t seen a big fall off in attendance and any hint of rain has cratered in person attendance lately.
On the TV front once you account for the fact that races have been stuck on channels that aren’t available in most households ratings are remarkably strong. The next TV deal will fix this too btw requiring a certain number of races on broadcast. FINALLY!
The truth is NASCAR is still the second most popular sport in this country. It’s popularity level from the 90’s wasn’t sustainable and the days where they gave the NFL a run for their money aren’t coming back. Anyone who whines about NASCAR’s demise is pushing a false agenda not dealing in reality
I can see Ty Gibbs taking over the #18 with Monster Energy sponsorship. If Truex retires and Johnny Moss just does RCR, then Gibbs could down size to 3 cars like Jack Roush did and save money and headaches.
I understand all the logical explanations but I think there are several obvious points not being stated: