Mergers are the talk all over NASCAR as sponsorship money becomes tighter and the divide between competitive organizations becomes larger. These deals have come into focus in recent weeks, with Gillett Evernham Motorsports rumored to be acquiring at least part of Bill Davis Racing and the resurgance of the rumor that won’t seem to die, linking Michael Waltrip Racing with Chip Ganassi Racing.
Almost two weeks ago GEM filed suit against Robby Gordon Motorsports to get out of a previous merger deal between the two. Word was, a better deal had come along that GEM wanted to pursue. That deal now seems to be Bill Davis Racing, whose owner has said he is willing to talk about possible acquisitions, or mergers.
Now, Dave Blaney, current driver of the #22 has said he is looking for a ride outside the organization. And the current status of their sponsorship (lack of it) for 2009 makes the team a very attractive target. From what I am hearing, the deal being put together would basically sell GEM the #22 Cup team (a move to secure top-35 points), and BDR would continue to operate with their Craftsman Truck Series teams, potentially adding a Nationwide team. A manufacturer swap for GEM seems unlikely and unnecessary.
BDR’s truck teams have had considerable success with Johnny Benson and Mike Skinner behind the wheel. In fact they recently added Doug Richert as Skinner’s crew chief and brought back Jeff Hensley to prepare Brian Scott for his transition into the organization.
The deal is a win win for both organizations. Bill Davis gets rid of a Cup team they have no hope of finding sponsorship for, and GEM gets the points to start a fourth team. No word on who might be in that ride, but Patrick Carpentier is now a free agent after just one season with the team.
On the other side of the spectrum is the deal that does not exist. Sporting News first reported the breakfast meeting between Cal Wells, Rob Kauffman, Chip Ganassi and Felix Sabates during the Daytona race weekend earlier this summer. Others are now pushing it despite the rumor not having any legs.
Here are some reasons why it is a bad idea and unlikely scenario. First, you have three teams at CGRFS, one completely unsponsored, and another with only half sponsorship. MWR is in the same situation. Merging two teams with sponsorship issues is clearly a bad business move. Pushing sponsorship is not the easiest thing in the world, and doing it for several teams is unrealistic (unless you’re Richard Childress Racing, but that is a different story).
In addition CGR’s ventures in other series make the deal difficult to understand. Operations for the entire organization (with the exception of a few key personnel) are based in Concord, not Indianapolis or Pittsburgh. Likewise MWR has a very clear corporate structure that would clash with Ganassi’s.
Beyond that is the large amount of real estate involved; CGR’s shop in Concord, MWR’s Raceworld USA in Cornelius, and other CGR assets in Indianapolis and Pittsburgh. Reconciling all of this under one roof would be difficult and costly.
Perhaps most obvious is the difference in manufacturers. These teams sign contracts that are not easy to get out of, as we saw when Bill Davis was sued by Dodge after switching to Toyota. While it sounds good to say, why don’t they just switch, it is just not that simple.
I can not tell you how many times I have heard from people in authority that this deal is not only untrue, but ridiculous. They ask, if a deal like this were to be discussed, why would they have done it in a crowded dining room, race weekend in Daytona Beach. Does not sound too logical. From what I have heard, this meeting was simply a courtesy (Cal Wells and Chip Ganassi are acquaintances) to help out motorsports newcomer Rob Kauffman. It is not at all uncommon for team leadership to have lunch dates and meetings with others around the industry. Unfortunately, Bob Margolis at Yahoo Sports and others are more interested in gossip, opinion and speculation (which is all this was when Sporting News “reported” on it) than news. None of them seem to grasp the close knit business relationships that exist.
Overall, these teams are not on top right now. Taking two struggling organizations and merging them into one large organization would only create more problems, and I would hope Chip Ganassi and Rob Kauffman (who is the president of a successful investment group) would be smart enough to see this.
As the season reaches the home stretch, plans for next season will begin to be finalized. While Silly Season is winding down, it is certainly not over and this is no more evident than on the business side of the sport.
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on Sep 17th, 2008 at 8:07 am
I have a nagging feeling Ganassi is going through a negotiated wind-up of his Cup team. I find it curious that they would confirm Target is back next year without specifying a driver, normally of paramount importance to a sponsor. Ganassi has delivered in the IRL for Target, but NASCAR is exponentially more expensive.
As I’ve written before, I wonder if the Wrigley’s sponsorship doesn’t go to JGR after the merger with Mars is voted on next week.
I have to believe CG has looked in his crystal ball and it’s telling him to stick with Indy Cars.
on Sep 17th, 2008 at 2:47 pm
CVT – The Target sponsorship is a blanket deal covering both IRL teams and the Cup team. It does not matter who is in the car as long as it is someone. Not to mention they have a long term contract with Ganassi that keeps them as the sponsor of that car beyond this season and next. That 19 or 20 year partnership is not going to be ending any time soon.
As far as Wrigley’s goes, as reported all over the business world when the merger took place and we have addressed it on here on at least one occassion, Wrigley’s is operating as a completely seperate entity of Mars. They maintain their CEO from before the merger and all sponsorship deals are handled solely by Wrigleys. Any sponsorship deals Mars has are completely seperate. They too are committed to the team through at least next season.
I can tell you if Chip was not committed to the Cup side of his business, he would not have his company run out of Concord. They would all be in Indianapolis or Pittsburgh where he lives.