How NASCAR Prize Money Works

For decades — from the beginning of NASCAR in 1948 through 2015 — the stock car racing series posted what's called "the purse" in the box scores for every race on the schedule. Drivers would negotiate contracts with team owners for a salary, plus they could receive a percentage of each week's purse. The purses depended on the size and importance of the race; big tracks had big payouts, and small tracks had smaller payouts.

Anyone who wanted to know how much money was being paid out for that weekend's race could easily find out. You could even learn how much the race winner would have deposited in his account.

For instance, in numbers from 2015, the last year before the charter system was in place, those numbers were big. When Denny Hamlin won the 2015 STP 500 at Martinsville, he took home $166,760. But when Joey Logano won Daytona that year, he got a whopping $1,586,503. That's by far the highest purse of any race that year. The second-highest payout for winning was at the Texas Motor Speedway, where Jimmie Johnson earned $523,501, less than a third of the Daytona purse.

But payouts for drivers have changed with the new charter system. Keep reading to learn how things work now.

The new charter system overhauled the ways drivers are paid because it created 36 ownership charters in NASCAR. These teams have regular sponsors and drivers, plus reliable race results. According to Autoweek, the 36 ownership charter teams earn shared perks of competing in the NASCAR Cup Series, including having a guaranteed starting position in every race. There are also four open teams in the system that do not have guaranteed revenue. These slots are available to newer teams trying to break into the Sprint Cup circuit.

But each charter is valued differently. Their value is based on things like the team's historic significance and car's standings over several seasons. Compensation for the chartered teams is based on guaranteed revenue, the team's performance over the past three seasons, a points fund with cash payouts, and the race purse, which as always is paid out based on a driver's finishing position. Teams can sell their charters or transfer them to another team. And NASCAR can revoke a team's charter if a team finishes in the bottom three of the 36 charter teams for three consecutive years.

Despite suggesting it would be transparent with its new financial system, NASCAR won't give details about how it distributes the prize money, even to some drivers. The money now is awarded to teams, not drivers, under this system.

Then-NASCAR chief operating officer Brent Dewar told NBC Sports they decided not to make total purse and individual winnings public for each race because "it's not contemporary" under the charter system. "It's a new foundation and a new era," Dewar said in 2016. "We've changed a lot of things from that old model to this model. That's one of the things that was from a different time and place."

While who actually gets the money may have changed, the amounts haven't changed much. The race purses — if you can dig and find them that is — are still huge. We know that the purse for the 2021 Phoenix race that ended the season was more than $10 million total, and the 2021 Martinsville race paid out nearly $8 million to the field of teams.

But the purses aren't as big as they used to be. Thanks to a bankruptcy filing by BK Racing in 2018, we got another glimpse into the money paid to teams at the lower end of the new system. BK Racing consistently finished in the back half of the pack. At Daytona — the highest-dollar race on the schedule — BK Racing won $428,794 for 20th place; otherwise, the team never made more than about $100,000 for any race.

Smaller teams like this might work out an agreement with the driver where the team gets the purse to help fund the car and the driver gets a salary from the team. Or they might do the exact opposite, letting the driver keep the purse in lieu of a salary, which might give them the drive — pun intended — to race more aggressively for a better finish.

According to Autoweek, NASCAR and Race Team Alliance (RTA) wanted to form the charter system to create a model that produced long-term value for team ownership. In cases of bankruptcy, like BK Racing, teams had nothing of value except their race shops, where items were sold off for pennies on the dollar. This system is supposed to help change that.

Whether it's fair to the drivers or not is yet to be seen.