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NASCAR driver contracts need restructuring due to charter system

The eradication of purse money means many drivers are seeking to restructure their contracts that contained performance bonuses.

Jerry Markland/Getty Images

The groundbreaking accord awarding charters to 36 Sprint Cup Series teams provided great security to car owners, except that reconfiguration of the longtime NASCAR business model has left many drivers scrambling to redo their contracts with the season-opening Daytona 500 just days away.

Considered independent contractors, a typical drivers' contract calls for them to receive a base salary along with a percentage of their winnings, often with the numbers varying depending on where they placed in the finishing order.

But when the charter system was unveiled last week NASCAR also effectively eliminated race purses, instituting a formula that will pay teams based on a weighted performance scale spanning three years.

Which means the previous contracts drivers operated under that included a percentage of race winnings are no longer in effect, thus reducing their salaries barring a last-minute renegotiation with their respective team owner.

"We haven't done anything about it yet," Casey Mears said Tuesday at Daytona International Speedway. "I may go into the Daytona 500 not actually knowing what I'm earning,"

Mears isn't in the minority, either. A large contingent of drivers representing every spectrum of team in the garage — from big to midsize to small — all said Tuesday they have already done so or will need to redo their existing contracts to recoup the money they lost because of the new franchise-like model, which drivers almost universally support.

"I think that everyone will have to have something redone within their contract," Denny Hamlin said. "There's verbiage in stuff that has changed how drivers get paid from the purse. There's not one common standard that one driver or team offers that's going to be the same."

Because drivers are independent contractors, each will have to rework their contracts separately. Many expressed confidence that would happen, though the condensed time period of when the charter system went into effect (Feb. 9) to the date of the Daytona 500 (Feb. 21) means it will take some time before owners and their drivers can agree on new deals.

"I think anyone would like to know before the terms of their employment changes but that is not the situation," Brad Keselowski said. "I am aware of the fact that I am a race car driver and no matter what happens I am still going to be OK, and I am not looking for anyone to feel bad for me. On the other side, it is not ideal.

"It would be like if your employer just said, ‘Hey, don't worry about it, you will get paid.' That is kind of where most every driver is."

There is no panic among drivers nor a sense they lost out while their bosses achieved some degree of financial protection.

Carl Edwards, a teammate of Hamlin's at Joe Gibbs Racing, described it as a "nonevent" and is already working with the team to adjust his contract, which he signed last year. Greg Biffle of Roush Fenway Racing called the situation "a matter of economics or math" and believes in the end everyone's will ultimately payout similarly with only the formula changing.

"I'm not in a big rush to address it," said Danica Patrick, whose multi-year contract extension with Stewart-Haas Racing begins this season. "I'm sure that my team has been nothing but fair for years, so we'll work it out."

Nonetheless, the potential is certainly for things to deteriorate and bad feelings to linger if a driver feels their team owner isn't operating in good faith.

"I drive for Roger Penske ,and I trust he will do me right," Keselowski said. "What else can I do but trust? That is my only option."