Archive for Thursday, September 20, 2007

Partnering for growth

Outside investors help Cup teams defray costs

September 20, 2007


NASCAR grew into what it is today because of the success of people with the last names of Waltrip, Earnhardt and Gordon.

If this season is any indication, the future of NASCAR may rest on the financial spreadsheets of individuals with names unfamiliar to race fans - names like Gillett, Henry and Moorad.

Hardly a week goes by nowadays without word that yet another Nextel Cup Series team is considering adding a partner or outside investor or contemplating a merger with another organization. The bottom line: To become or remain competitive in NASCAR's biggest series requires an equally large infusion of cash.

Yet while the allure of NASCAR was forged on the track by the likes of Darrell Waltrip, the late Dale Earnhardt and four-time Cup champion Jeff Gordon, the ability of the sport to continue to produce such icons may take an increasing number of outside investors like George Gillett, John Henry and Jeff Moorad.

Although race fans may not be familiar with some of them, they will soon recognize their impact.

Gillett, owner of the Montreal Canadiens and co-owner of the Liverpool Football Club, recently purchased majority interest in the three-car Cup team owned by Ray Evernham. His arrival has already paid big dividends for his new organization as he helped land sponsor Budweiser for driver Kasey Kahne.

Henry, principal owner of the legendary Boston Red Sox, earlier this year became a 50-percent owner of Roush Racing and its five-car Cup stable.

Moorad, chief executive officer of the Arizona Diamondbacks baseball team, and Tom Garfinkel, the COO of the Diamondbacks, recently bought majority interest in Hall of Fame Racing, a satellite team of Joe Gibbs Racing.

There are more on the horizon.

Dallas businessman Tom Hicks, owner of the Texas Rangers baseball team and Dallas Stars hockey team, has been looking into investing in a NASCAR team.

Michael Waltrip Racing and Petty Enterprises also have expressed interest recently in taking on an outside investor.

Is this a ripe time for investing in NASCAR?

The sport has seen its TV ratings hit a slump this season but it typically remains the most-watched sporting event when the NFL is not in season. NASCAR fans are also among the most loyal to advertisers.

"We believe in NASCAR and like its long-term business future and are thrilled to be a part of this exciting and growing industry," said Mike Dee, chief operating officer of the Red Sox.

NASCAR remains an intriguing investment opportunity for outsiders - a good sign for team owners who continue to seek new revenue streams.

"Our sport is growing and we all know that in racing speed equals dollars," explains reigning Cup champion Jimmie Johnson. "That's just how it is."


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