We don’t normally read, let alone act on any PR emails we receive, but when I got a message about Forbes upcoming feature on NASCAR’s wealth, I got excited. Every year, Forbes magazine does a ranking of the most valuable teams in NASCAR, along with a list of the highest paid drivers. The leaders on both lists were Hendrick Motorsports and Dale Earnhardt Jr. respectively (no surprise there). But what really caught my eye was a piece they did on Richard Petty’s re-emergence as the head of Richard Petty Motorsports. In the story, some new information about the deal made with Andrew Murstein and Douglas Bergeron emerges, and the numbers and details are staggering.
Just as a quick refresher, remember that the Gilletts bought Richard Petty Motorsports before the 2009 season for $110 million. They would later default on a $90 million loan that was part of the financing for the Petty deal. Wachovia/Wells Fargo made attempts to restructure the debt with the Gilletts, at one time even offering to cut it down to $30 million. Toward the end of the 2010 season, RPM began to struggle financially, and just barely finished the season with all four teams. Following Homestead, Petty worked out a deal with investors Andrew Murstein and Douglas Bergeron to save RPM.
Now, here is where things get crazy. According to Forbes, Murstein and Bergeron were able to buy the Gilletts’ outstanding $90 million note from Wells Fargo for a scant $11 million. Then, Petty made a “several million dollar” investment of his own, and his stake was upped to something more substantial than his previous 4% share. Petty topped off the deal by selling the rights to his name for “perpetuity.” Wow.
So not only did RPM’s new owners buy the team for literally pennies on the dollar, but they also can make money off licensing out the Petty name for, well, forever. Can we say steal of the century?
The Forbes piece goes on to say that of the $50 million RPM is expected to bring in via sponsorship deals this season, the company is expected to net between $5 and $6 million. That means, depending on Petty’s stake, that Murstein and Bergeron could pay off their initial investment in as little as 2-3 years. Not bad.
While it appears as though Petty basically sold his soul to save RPM, you almost have to gain a ton of respect for him. We were on the verge of a NASCAR where the Petty name would cease to be apart of team ownership, and Richard did what was necessary to make sure that didn’t happen. I don’t know how many people would have advised him to give up the rights to his name, and in essence the Petty brand, however (it certainly is a little crazy). Even without this part, the new ownership group was getting a whole lot for very little.
So, did Murstein and Bergeron get one hell of a deal? Yep. They didn’t get to where they are by seeking out bad deals after all. And did Petty give up a lot to make this thing happen? He sure did. But at the end of the day, Petty is back at the helm of a NASCAR team, and the sport is a better place because of it. Don’t be surprised if someday really soon, Richard Petty Motorsports sneaks it’s way into that top five of the Forbes most valuable NASCAR teams.