NASCAR Reportedly Close To Instituting Divisive ‘Budget Cap’ On Teams

Should NASCAR teams have limits on how much they can spend?

The idea of a budget/spending cap has been floating around NASCAR for a while now. But what once felt like a fantasy now appears closer to becoming a reality, SB Nation’s Jordan Bianchi reported Thursday.

“NASCAR and its teams have had multiple discussions about such an idea,” Bianchi wrote, “and the consensus among the multitude of NASCAR executives, team owners and executives, drivers, and manufacturer representatives that SB Nation spoke with is that while a budget cap won’t be instituted in the immediate future, it is likely to come within the next three to four years.”

So, what would a budget cap mean for NASCAR?

“The exact framework of the budget cap is still being crafted,” Bianchi wrote, “but a rough outline has emerged that will serve NASCAR and its teams on two primary fronts: 1) It will help teams reduce and better manage operating costs that are no longer practical in an economic climate where teams face a sponsorship deficiency, and 2) A way to induce better competitive balance and bridge the gap between the powerhouse organizations and the minnows.”

It’s unknown exactly what would fall under the budget cap’s umbrella, but Bianchi reports that it’s “unlikely” teams would be restricted in the amount of money they can spend on drivers and high-level personnel. Things such research and development, equipment and other crew members likely would be encompassed by the cap.

So why is NASCAR finally considering implementing spending budgets? Well, lackluster TV ratings, sponsorship woes and declining popularity have the sport in something a financial squeeze. So, it’s time to get creative.

“A cap of some sort is something this sport badly needs if it’s to remain financially sustainable,” a team executive told Bianchi. “We’re making gains to get to that point and hopefully we can get there soon, because we absolutely need to find a way to get this done. If it were up to me we’d have this done already.”

Not everyone is as sold on the idea, however.

“I have heard a lot of talk about it, but I’m not a big believer in it,” Brad Keselowski told Bianchi. “All it does is make a bunch of accountants rich and probably not make much of a difference with the racing. You can’t manage it, you can’t police it without spending a fortune on accounting.

“I don’t think that’s the right answer.”

A cap, obviously, would be both complicated and divisive. But, in general, the pros of a potential budget cap are competitive parity and easier costs management, while the cons are stymied innovation (a hallmark of motorsport) and concerns that teams could exploit loopholes via external business partners.

No matter what happens, it’s probably safe to say that — for better or for worse — NASCAR will look much different in five years than it does now.

Read Bianchi’s full report on NASCAR’s ‘budget cap’ >>