Denny Hamlin Warns of NASCAR Series’ Grim Future Exposing It’s Broken Business Model

NASCAR’s middle tier is at a crossroads. The scenario unfolding before them: O’Reilly Auto Parts is stepping in as the new title sponsor for the second-tier series starting in 2026, succeeding Xfinity. NASCAR president Steve O’Donnell lauded the move, praising the alignment of values and emphasizing how it continues to “fuel that passion for the next generation of NASCAR’s stars and fans.” Yet, while financial muscle appears renewed, smaller outfits are rightfully asking: Will this lifeline stretch all the way down?

Several Xfinity teams have publicly acknowledged that sponsorship revenue is drying up, tightening the purse beyond what performance alone can compensate. NASCAR team-owner Tommy Joe Martins of Alpha Prime Racing highlighted a potential remedy in touring: uniform payouts, saying NASCAR now pays “the exact same amount every race… whether that is Charlotte or Portland,” aiming for budget stability. But while this injects budgeting clarity, dollars still lag behind expenses, drawing a sharp contrast between intent and reality. Which brings us to one of NASCAR’s most respected voices, Denny Hamlin, concluding it’s already too fragile.

Denny Hamlin raises red flag on NASCAR’s financial fragility

In the latest episode of his podcast Actions Detrimental, Hamlin sounds alarms about the sport’s structural vulnerabilities. “Well, there’s just limited, because whatever their cost is, obviously, there’s not nearly enough purse money or team money to support what it costs,” he said. “They don’t have their expenses covered, so they’ve got to either get it through sponsorship or drivers with sponsorship… if you don’t have a sponsor in your pocket that is willing to sponsor… nobody until you tell them who to sponsor, you rely on the driver to bring that sponsor, or their family or whoever.” 

Purses at the lower end help, but rarely cover true costs. For instance, Daytona’s Xfinity opener added a $4,000 bonus for 31st-35th as a purse kicker, which was useful but not transformative. Meanwhile, recent high-profile seat decisions underscore how funding tilts the scales. Hamlin’s own 23XI Racing’s 2025 choice of Riley Herbst, backed by Monster Energy, over Corey Heim, despite Heim’s superior Truck resume, became a case study in sponsorship trumping merit.

So, in a way, the Cup Series at the top level has to step in to provide extra support for the Xfinity Series, as opined by co-host Jared Allen. “Yeah, but even that has gone away,” replied Hamlin. “Penske got rid of their Cup program, and Hendrick used to have… I guess they still have the 17 car. They’re creeping back into it. I think Hendrick and JR Motorsports obviously have a partnership there. I think Rick owns a little portion of that.” Team Penske shuttered its Xfinity team after 2021 and had “no plans” to return in 2022, while Hendrick’s No. 17 was back with only a limited slate of 16 races in 2025, with Cup stars rotating, rather than a full-season development juggernaut. That partial return keeps the talent flowing, but it’s a far cry from the era when multiple Cup titans fielded year-round Xfinity super teams.

But there has been a rumor going around the paddock, with Hamlin now amplifying it. “I just think the business model is going to continue to get harder and harder,” he opined. “And from what I’m hearing in the Truck Series is that NASCAR is telling them… This is a rumor… They need them to go to spec trucks by 2028. How in the world are they going to be able to afford that?” Even if “spec” can lower barriers long-term, the conversion shock of scrapping inventories and buying new kits can crush smaller teams in the short run. For instance, Stewart-Haas Racing’s 2024 shutdown stripped the ecosystem of seats and sponsors. On the other hand, title sponsor churn adds more uncertainty with Xfinity out and O’Reilly in for 2026, reminding teams that revenue models are moving targets.

And the loss of the hand-me-down pipeline is real. “It’s going to happen to the Xfinity series as well. Those guys are running on cars that are old… And it used to be passed down from the Cup series,” he continued. “And so the Cup teams could recoup a little bit of money from their investment from their Generation 6 cars and 5 cars because they were just passing it down to Xfinity. And then Xfinity would be racing 2, 3, 5-year-old Cup cars. Now they’re all having to keep building new stuff. And so that just really takes a toll on the teams and drives up their costs.” Since the Next Gen debut, Cup hardware doesn’t translate to Xfinity’s older architecture. The older model that the Cup sells on and Xfinity reuses helped both sides’ economics, and technical divergence forces Xfinity teams to build or buy bespoke pieces rather than refurbish Cup leftovers.

Even NASCAR’s own tech history notes the series split since the CoT/Gen-6 transition; cost-saving composite bodies helped Xfinity in 2018-19, but the inter-series compatibility that has since greased budgets has faded. And the big question still lingers as Hamlin reiterates it: “We’re going to hire who? Who’s going to win us that money?” Bigger guaranteed purses would encourage owners to prioritize outright performance hires over sponsorship portfolios, as the fastest drivers directly generate revenue. Layer on macro shocks, and you get the tightening vise Hamlin describes.

Until the purse structure reliably covers a greater share of operating costs, the sport will keep nudging teams toward the safest financial bet rather than the purest competitive one.

Denny Hamlin suggests a fix for the system

Parker Kligerman’s racing career has seen flashes of brilliance mixed with heartbreaking setbacks, from misses wins at Charlotte Roval to Daytona controversies. But behind the unlucky streak lies a deeper issue. As Denny Hamlin revealed, “Parker is one of the better racers in the Xfinity Series over the last few years…But why doesn’t he run Xfinity? Guys, this is a prime example of how broken this business model is.”

The Joe Gibbs Racing star explained that the economics of the sport push talented drivers away. “The guy makes more talking about the drivers than actually being a driver… He could have a ride, but it doesn’t pay anything,” he explained. “And he would be taking a massive pay cut by being a star in the Xfinity Series vs being an announcer for the Xfinity Series. That…will continue to hamper the best talent.”

Hamlin, who is also battling NASCAR in court with 23XI over alleged monopolistic practices, proposed a solution: “You’re gonna need something like this, where one of the top teams, like okay, I’m gonna be okay with 2-3 pay drivers and then one seat for whoever I actually…think is pretty good.” His words put into focus the financial imbalance that continues to shape careers like Kligerman’s, and how NASCAR needs to address such issues as soon as possible to avoid losing out on great talent.