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05/20 2015

How much are IndyCar drivers paid for the risks of racing?

IRL

 There are no fiery, car-flipping, bone-jarring wrecks in the NBA or NFL or MLB, yet the harsh reality is that even the best drivers in Sunday’s Indianapolis 500 make a lot less than top athletes in those sports.

How much less? Let’s just say that by all accounts IndyCar’s finest rake in roughly the same as, well, a backup power forward grinding out 15 minutes a game. Or a middle-inning relief pitcher. Or a long snapper.

IndyCar salaries are not only less lucrative than those in the major professional team sports, they also are far less transparent.
You have a better chance using a Camry to chase down Will Power’s car at the Speedway than nailing down the exact salary figures. That said, interviews with drivers, agents and others, plus a look at driver contracts made public in lawsuits, suggest the top IndyCar drivers make up to $1.5 million per year, while lower-tier drivers risk their lives for something in the low six figures.
While that would be a huge sum for most people, it’s not much compared with other sports salaries. And IndyCar drivers endure constant danger, which was especially evident with scary crashes during this month’s practice sessions.
“They don’t get paid near what they deserve for the danger zone they operate in,” said TV commentator Derek Daly, father of Indy 500 driver Conor Daly.
Last week, driver Sage Karam, 20, walked to his garage in Gasoline Alley after a practice in which Josef Newgarden’s car had just crashed after going airborne.
“Josef’s one of my best friends in this series, and to see him upside down like that — as I’m sitting in the car and I’m about to go out there and race — it’s not a good feeling, but it’s part of it,” Karam said.
“I know it’s tough times right now for racing. It’s a very expensive sport. It’s not like we can go buy a $20 basketball and we’re good to go for the season. You see guys in the NBA making $30-some million, and there’s probably a handful of drivers here who are making seven figures. We do a sport that’s very, very dangerous, as you could see the past few days and years.”
Agents trying to get the best deal for drivers taking on that danger work at a disadvantage compared with agents in the NBA, NFL and MLB.
In IndyCar, there’s no drivers union sharing contracts with certified agents. No collective bargaining agreement with a standard contract and minimum salary. No salary cap or rookie wage scale.
“You don’t have the free flow of information, and you do have a third party — the sponsor,” said John Caponigro, agent for driver Marco Andretti and his team who also has negotiated NBA and NFL player contracts.
Mickey Ryan, Karam’s agent, also has represented Indy 500 winners Dario Franchitti and the late Dan Wheldon. He noted the many variables up for negotiation in a driver’s contract.
“Each racing contract between team and driver is totally different from one to the other,” he wrote in an email.
It isn’t even a meritocracy, because drivers can buy their way into rides at the Indianapolis 500 and elsewhere by bringing enough sponsorship money, or family money, to the table. There isn’t enough money in the sport to pay for dramatic competition on Pole Day.
“It’s literally like going out to Enterprise rent a car at the airport,” Daly said. “You pay them, they give you a car. You come here, you pay (the team), they give you a car, but they also give you the crew.
“Can you imagine what would happen if you went to the Indianapolis Colts and there was a quarterback there who bought his way into the position? Everybody would boo, and everything he did would be criticized. All the newspapers would slam the franchise. It would disappear in a heartbeat.
“It’s become accepted here. … We’re actually accelerating our own loss of credibility by filling most of the grid with pay drivers.”
Top teams such as Chip Ganassi Racing, Andretti Autosport and Team Penske, however, are believed to be paying guaranteed salaries to top drivers such as Power, Scott Dixon and Helio Castroneves.
Castroneves’ compensation with Penske from 2000 to 2002 became public information in a tax evasion lawsuit brought by the U.S. government. The driver, now a three-time Indy 500 winner, eventually was acquitted.
The case revealed that Castroneves had a $6 million deal with Penske covering 2000 to 2002. He received $5 million for use of his name and image and $1 million for driving.
But that was then. While the salaries for NBA and NFL players have exploded over the past 20 years, the market for IndyCar drivers has actually gone down.
“I would say the top 10 guys (then) were making more money than the top 10 guys are today,” Daly said.
Caponigro agreed. “I think the top-tier guys like Mario and Michael (Andretti), when they raced, were doing fairly well comparatively,” Caponigro said. “In those cases, I would suspect that’s higher than what top guys make today.”
Ryan, the agent, didn’t want to add his perspective, writing, “Unlike the NFL and NBA, I choose not to talk about specifics with regards to contracts and compensation.”
But some driver contracts have become public information in lawsuits.
Defending Indy 500 champion Ryan Hunter-Reay’s driver contract for the 2005 Champ Car season — separate from a deal to use his name and likeness — became public in a lawsuit in which he claimed the team was insolvent when it signed him.
Hunter-Reay was paid a $175,000 “retainer” plus a percentage of prize money — 50 percent for third-place or better finishes; 33 percent for fourth through seventh place; and 20 percent for eighth through 10th place. He received the same percentages for his finish in the season-long points standings. Hunter-Reay had four top-10 finishes that season, the best of which was sixth place in two races. He finished 15th in points.
Scott Sharp’s contract with Rahal Letterman Racing in 2007 and 2008 had a different structure. Sharp brought sponsorship money to the table from Patron tequila. The contract called for the driver and his marketing company to pay the team $5.2 million each year. He would then try to make money from his sponsors. Sharp was to receive 40 percent of prize money for races and season points. For top three finishes, he received 45 percent. Sharp raced for the team only in 2007. Rahal Letterman filed a breach of contract lawsuit against Sharp and Patron that was settled in early 2008.
Driver and team owner Ed Carpenter, who won the pole for last year’s Indy 500, has said there is sometimes little left over after expenses to pay himself as a driver. But he made light of the subject of driver compensation.“There’s not really a place for me in the NFL, and I (stink) at hitting baseballs,” he said. “So here I am. I would do this for free. It’s what I love to do.”
Power, who won last season’s points championship, said he feels differently.“I wouldn’t do it if I wasn’t paid,” Power said. “I’ll put it that way.