BK Racing's income statements show costs to run underfunded race team

BK Racing tried to survive on just $1.055 million in sponsorship in 2015 and $1.513 million in 2016.

Seeing those numbers, it isn't a surprise that the organization is in bankruptcy trying to reorganize to pay off millions in debts.

As BK Racing goes through that process -- team owner Ron Devine faces a key court hearing Thursday on whether he can still operate the team or whether a court-appointed trustee will take over the financial operations -- the filings show the challenges of operating a race team unless the owner is willing to put in a significant investment if no sponsorship materializes.

According to the court filings, BK Racing lost $11.0 million in 2014, $10.1 million in 2015 and $8.45 million in 2016.

The filings include a detailed breakdown of revenue and expenses for 2015 and 2016.

In 2016 with two full-time cars -- both charter cars -- and a third car that competed in nine races and a fourth car in the Daytona 500, BK Racing fielded 82 cars over the course of the season.

It earned $7,822,596 million in prize money -- 78.8 percent of its total revenues ($9,925,331) because of such little sponsorship. Typically, the percentages of revenue from prize money and sponsorship are reversed for the bigger teams.

BK Racing's listed total expenses, prior to some accounting adjustments, were $18,144,149 for 2016. Other team owners that looked at this list said much of it seemed in the ballpark of what a team would spend in these areas. Here were some of the biggest items:

  • $5,896,898 (27.5 percent) on payroll and wages -- with $3,733,329 in salaries and wages, including other hourly wages and overtime; $1,033,471 of contract payroll (pit crews, spotter); and $467,736 in driver payroll.

  • $4,093,761 (19.1 percent) on its engine lease.

  • $1,916,327 (8.9 percent) on tires.

  • $1,801,822 (8.4 percent) on travel, including $927,160 for airfare and $432,883 for hotels.

Here are some costs, under $1 million, that also were notable:

  • $493,120 on entry fees, plus another $79,352 on NASCAR licenses and credentials.

  • $292,512 on transmissions

  • $162,494 for brakes

  • $138,880 for decals

Exactly how much BK Racing owes creditors remains unclear, as creditors have until April 26 to file claims with the court. The two biggest claims filed as of Monday: Union Bank & Trust claims it is owed $11.47 million, and the Internal Revenue Service claims it is owed $2,893,509.