NASCAR’s Pay Crisis Exposed: Denny Hamlin Reveals Driver Salary Drop

NASCAR driver Denny Hamlin has shed light on a growing pay crisis affecting drivers. Hamlin’s comments come amidst an anti-trust lawsuit filed by his team, 23XI Racing, alongside Front Row Motorsports, against NASCAR.

This legal dispute highlights alleged monopolistic practices that, according to the plaintiffs, suppress team earnings, contributing to a drop in driver salaries. The situation, as discussed by Hamlin, is alarming.

This disagreement came after the refusal of 23XI Racing and Front Row Motorsports to sign a new charter agreement covering the years 2025 through 2031. The agreement was signed by the other 13 Cup Series teams earlier this year, but the suing parties argue that its terms perpetuate NASCAR’s monopolistic control.

Denny Hamlin, who co-owns 23XI Racing along with NBA icon Michael Jordan, has spoken out about the financial toll these practices are taking on drivers and teams. During an appearance on the “Actions Detrimental” podcast (above), Hamlin discussed the decline in earnings.

“Every team is different and driver salaries are on a very wide spectrum,” Hamlin said. “There’s some at the very, very top that are still, you know, close…they’re not at the peak of what it used to be but it’s close to it. And you’ve really got another tier of, yeah they’re kind of in the middle of, you know, it’s good not great.

“Then you’ve got a lot of the field that’s not making as much as an engineer makes. It’s really, really dispersed throughout the field.”

The variety in pay reflects broader financial pressures. Only a handful of drivers earn salaries close to what they might have commanded in the past. For many, earnings have been compressed to a level comparable to the engineers in the sport.

This retraction in driver salaries is having a negative impact on how teams recruit talent. Those who have the talent to find higher-paid work elsewhere will do so, resulting in what we call ‘brain drain’ from the sport.

Hamlin argues that a financially healthier NASCAR would enable teams to hire purely based on skill, without monetary considerations clouding judgment.

“We’re not…we won’t be looking for, well, does it financially make sense to hire this driver, right? We’re just going to say, if we’re in a healthier spot, we’re going to say, ‘Give me the best guy.’ And if there’s one or two people that are head and shoulders above the rest, I’m going to pay a s*** ton for that guy. Because he’s going to make the difference on my race team,” he elaborated.

The lawsuit initiated by Hamlin’s team seeks to challenge and ultimately dismantle NASCAR’s practices that the plaintiffs allege are stifling fair competition. They are pursuing treble damages to address the detrimental effects of the agreements from 2016 and the newly proposed one. The legal challenge extends beyond compensation, however; it aims to restore teams’ profitability, ensuring sufficient revenues to offer competitive pay to drivers and crew. Such success would herald a more equitable and competitive NASCAR, benefiting not just teams and drivers but also sponsors and fans.

In their effort to push back against NASCAR’s dominant practices, 23XI Racing and Front Row Motorsports have filed a motion for a preliminary injunction. This motion, submitted in early October, aims to permit the teams to continue operating under their existing charters as the lawsuit unfolds.

Successful acquisition of the injunction would require demonstrating a likelihood of success on the merits of their case, proving irreparable harm, and establishing that maintaining the status quo is in the public interest. Concurrently, another motion has been submitted for expedited discovery. It requests documentation from NASCAR executives, including those pertaining to the contentious mandatory release provision in the 2025 agreement and the decision to cease negotiations with the Team Negotiating Committee.

Other team owners provide varied perspectives on the unfolding situation. Richard Childress, who heads Richard Childress Racing, admitted that contractual obligations with over 400 employees, OEMs, and sponsors as reasons for signing the charter. Meanwhile, Justin Marks of Trackhouse Racing views the situation as an evolving beast, choosing to build a business model around current agreements following recent successes.

As this legal battle progresses, its outcome could have profound implications for NASCAR’s structure and operations. This is a very important time for the sport.