Tuesday, July 27, 2010
St. Petersburg Times (Florida)
October 21, 2007 Sunday
The banner slowly circled Lowe's Motor Speedway behind a small plane, at first lost among the usual visual clutter of buy-this-support-that commercialism. It was free speech at low altitude.
"How much does Bobby Ginn owe you?"
NASCAR teams chase sponsorship dollars in an increasingly expensive sport and court outside investment to remain competitive. But the banner, flown last weekend, and the story behind it make for a cautionary tale.
Well-funded businessmen such as George Gillett Jr. and John Henry, who bought majority stakes in Evernham Motorsports and Roush Racing, respectively, could be a lifeline. But owners or sponsors who replicate Ginn's experience could have a destabilizing effect on the core group of teams.
"Even in this day of sanitized corporate involvement, there's still the wild card that comes in and self-destructs in 18 months," Peter De Lorenzo, an industry analyst and consultant who publishes Autoextremist.com, said of Ginn. "(NASCAR) doesn't do due diligence in that regard - certainly not enough."
The citizens of Hilton Head, S.C., sported bumper stickers that read "Honk if Bobby Owes You" in 1987 after the home builder's leveraged buyout of vast holdings failed, laying waste not only to the real-estate market but service industry of the vacation playland.
Now the 58-year-old head of a sprawling Celebration-based resort firm, Ginn re-created that maelstrom in microcosm after buying an 80 percent stake in MB2 Motorsports in 2006. He hired scores of employees, invested in expensive equipment, said all the right things about the long haul. But as debts mounted and he was unable to replace his resort empire as a rotating sponsor on his three-car Nextel Cup team, he laid off almost 100 employees and sold out to Dale Earnhardt Inc. in July, becoming a minority partner rarely seen at the track.
Ultimately, his maneuver had the look of an investor buying a house on the cheap and flipping it, as DEI moved into Ginn Racing's larger shop as part of the transaction. Former drivers Sterling Marlin and Joe Nemechek have since sued for unpaid wages.
Ginn representatives did not respond to requests for an interview.
He wasn't the first to overestimate his wealth and potential. J.D. Stacy, a Kentucky coal baron who entered the sport in 1977, owned/sponsored a record seven cars in the 1982 Daytona 500. A year later he fled, with lawsuits and vitriolic debtors and owners in his wake.
While bodies such as Major League Baseball and the National Football League control franchise sales and investigate ownership groups, NASCAR claims to yield to the free market.
"NASCAR is open to any team that can show up to the track and get in the show," NASCAR spokesman Ramsey Poston said. "Throughout our history some owners have succeeded and some have failed. Like most businesses, probably more have failed than succeeded"
The new batch of owners appears sound. Besides Gillett and Henry, who according to the Boston Globe paid more than $50-million for 50 percent of Roush's outfit, British billionaire Robert Kauffman recently bought half of Michael Waltrip Racing, and Arizona Diamondbacks managing partner Jeff Moorad and chief operating officer Tom Garfinkel secured a controlling interest in Hall of Fame Racing. Richard Childress quietly began the trend when he added unnamed investors two years ago.
Each investor has his reasons. Gillett and Henry were longtime fans, but even the most avid hobbyist likely wouldn't venture on a dalliance this expensive without the prospect of profit. Gillett, owner of the Montreal Canadiens and co-owner of Liverpool Football Club, sold the Harlem Globetrotters and a share of the Miami Dolphins when other opportunities interested him. The consolidation of teams and influx of outside investment make this a volatile time, De Lorenzo said, though he noted Gillett has the "deep pockets" to last.
"It's great to have this infusion of money," De Lorenzo said. "But now it's $20-million to run a single front-line car for the season. ... Eventually there is going to be only a handful of teams and I think some of these people who come in, they're going to get over their head and they're going to spike salaries again and they're going to take a lot of people from their current situations and then implode."
Veteran driver Kyle Petty, whose family team has raced in NASCAR since its inception, said "how race people are" has for years made owners vulnerable to snake oil salesmen and the traveling preacher show. Petty said a stranger with an ubiquitous old briefcase began showing up at races in 1988, boasting that he represented a company that wanted to invest $15-million to $20-million in a team.
"A sponsorship was $2-million," Petty said. "Along the road (at Talladega) ... he had a motorhome parked there. You could sit there - I think (team owner) Eddie (Wood) and them went and talked to him - and he invited people out. Darrell (Waltrip) went out there. Everyone went out and talked to them. He came to about 10-12 races right in a row. You'd see him out to dinner with (team owner Robert) Yates, all kinds of people. The guy called the racetrack and got garage tickets and just happened to walk through there and tell people these stories and everybody bought it.
"That's the way race people are. If they think anybody's got money, we're all hookers."
Brant James can be reached at brantjameslives@gmail.
Tuesday, July 20, 2010
George Steinbrenner was evil incarnate in my childhood home. He, as any member of my family would readily assert, "ruined baseball," or at least plenty of summers in Maryland.
It was with that indoctrination that I formed preconceived notions about this gruff, volatile man as I began a career as a sports reporter. On my first occasion to actually speak with him, while covering thoroughbred horse racing for the St. Petersburg Times, I had already scripted out in my mind the inevitable failure of the interview with this curmudgeon before I ever made my first call to the office he kept in Tampa.
But I made the call anyway, asking his long-time secretary if I could steal a few minutes of his time, eliciting a polite but noncommittal tone in her voice. It didn't sound like this was going to happen. Of course it wasn't.
Remembering a bit of advice from an veteran co-worker who had danced with this devil throughout the years, I interjected, "This isn't about baseball. It's about horse racing."
"Oh," she said, more energetically. "I'll tell him."
The call ended and I went about finding another interview subject to buoy the story where Steinbrenner had failed me. Twenty minutes later the phone rang in my cubicle.
"Brant!," boomed the voice.
It was ridiculous, a Seinfeld parody. He really barked into the phone in that absurd, abrupt style. More amazingly ... George Steinbrenner had returned my call. And he was a gracious, informative interview. He spoke at length about the joys of the Kinsman Farm breeding and racing operation he owned in Ocala. A man so renowned for milling through free agent talent, managers and general managers like so much chaff extolled the joys of breeding his own horses and the accomplishments his son, Hank, had made as a horseman. He was never emotional or incredibly introspective. But he spoke in factoids and blurbs that illuminated an unexpected facet of his personality. The conversations would end abruptly, as if his train of thought or allotment of valuable time for me had expired. He would declare he had to go, and then he went. But it was always worth the call.
I enjoyed several more interviews with Steinbrenner until the spring of 2005 when one his finest Kentucky Derby prospects, a strapping Wood Memorial-winner named Bellamy Road, was about, I hoped, to become a national story. Steinbrenner told me twice that winning at horses was by far more difficult than baseball, and a Kentucky Derby, though he never actually said it, seemed to be the great undone thing in his life as one of America's last true sportsmen.
Confident of my rapport with Steinbrenner, I promised my editors a tale of how Steinbrenner had built his racing empire so conversely to the Yankees, eschewing high-dollar yearlings, campaigning this homebreds and frugal auction purchases to national success and, again, America's greatest race. I rang his office one April morning, made the typical request with his secretary and waited for a quick reply.
And waited. And waited.
Days passed. Two weeks. Steinbrenner had betrayed me when I most needed him.
A day before my deadline, flailing in my cubicle for a backup plan, I received a phone call.
"George Steinbrenner. Look, Brant, I want to apologize. Apparently there was some problem getting me your message a few weeks back, but I've remedied that situation."
Christ. Had he fired his secretary over a missed message? Had she been Billy Martined? No time for that. (And I never actually did bother to find out. I know. Idiot) The Boss was talking the first Saturday in May and I was hammering out notes barely fast enough to keep up. Steinbrenner spoke with urgency I'd never heard from him over a horse, but he would never admit how much a Derby win would mean to him. Seven minutes into the interview, the egg timer ran out again.
"You need to talk to Eddie Sexton, my farm manager," he said. "He'll talk to you."
Steinbrenner's patience with being the center of the tale quickly vaporized, and he granted just two – that I found - other interviews on the topic, with reporters he'd known for decades.
Sexton was a candid sort whose demeanor fit well with Steinbrenner. He was an extra in Braveheart. Seriously. And the Irishman wouldn't have wasted his time on an interview with a reporter unless ordered. That he told me right off. And then he told me a tale I still relish writing to this day. Because I was seeing the man with new eyes like, I hope, many readers, whatever their preconceived notions had been.
Bellamy Road went into the Derby as a 5-2 favorite but foundered in at seventh. Steinbrenner resolutely instructed long-time trainer Nick Zito to "just keep trying."
I never had occasion to call Steinbrenner again. And maybe for the best. He'd taught me a lesson in perception, though I'd clearly benefitted from a topic that disarmed him. He'd provided me one of the most memorable anecdotes of my career. He'd been good to me, and that was all I could ask. As for that secretary ... I should look into that.