• UNCONVENTIONAL WISDOM:

Monday, October 20, 2008

NET WORTHS

"Win on Sunday. Sell on Monday." That's the most historically significant statement in Business of Racing history.

Corporate $ponsorship and technical $upport budgets, which have a combined value into the billions$, have been approved with this bottom-line argument. It was first used (at least as far as I know) by the Detroit automakers.

But with show rooms becoming ghost towns, I'm sad to say there's going to be more walking-around room in the pit and garage areas.

The auto manufacturers' financial troubles -- and those of their local dealers -- have been a primary focus of media attention. Pretty much uncommented upon, though, is the huge position automotive retailing occupies in the portfolios of some of racing most important players.

For example purposes only, consider Roger Penske, Rick Hendrick and Bruton Smith.

According to the Penske Automotive Group's website, PAG operates 308 retail auto franchises, representing more than 40 different brands, and 27 collision repair centers. Quoting from corporate information: "Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 161 franchises in 19 states and Puerto Rico and 147 franchises located outside the U.S., primarily in the United Kingdom. Penske Automotive is also the exclusive distributor of the smart fortwo through its wholly-owned subsidiary smartUSA Distributor LLC. smartUSA operates 69 smart centers across the U.S. Penske Automotive is a member of the Fortune 200 and Russell 1000 and has approximately 16,000 employees."

I counted more than 60 dealerships listed on Hendrick's site, in at least 10 states. Included are a Jeff Gordon Chevrolet in Wilmington, N.C., Jimmie Johnson Chevrolet in San Diego, Terry Labonte Chevrolet in Greensboro, N.C., and Darrell Waltrip Honda and Volvo in Franklin, Tenn.

PRNewswire materials show Smith's Sonic Automotive with about 166 dealerships in at least 15 states. Under this umbrella are Arnold Palmer Cadillac stores in Charlotte and Pineville, N.C.

Most of the "name" brands are offered by the above, among them Acura, Audi, Jaguar, Lexus, Land Rover, Porsche, Rolls-Royce, Aston Martin, Honda, Toyota, Mercedes-Benz, Ferrari, BMW, Maseratti, VW, Bentley, Hummer, Dodge and Jeep.

It's a different level, but rookie NHRA Funny Car driver Bob Tasca III's family has sold Fords in Rhode Island since the 1960s.

In my current Drag Racing Online.com "All Business"column, I reference that one of the sub-issues affecting the general racing economy is the huge net-worth hit no doubt taken by a bunch of team owners.

And then there are the various investment firms that have bought into NASCAR teams in recent years. The underlying financial health of those concerns surely could spill-over into team operations.

These days, working to maintain existing sponsor relationships is a full-time and highly-stressful job. Let alone trying to secure any fresh deals. No doubt, some owners have their hands full just trying to keep a solid foundation under their own core businesses, a priority over racing.

That's a factor worth watching.
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Considering how the elite New York and Washington D.C. media have back-handed John McCain during this campaign, as they (led by NBC -- would Meet The Press have given Colin Powell its stage for a McCain endorsement? I think not.) fall all-over-themselves for Barack Obama, this posting on The Drudge Report on the eve of the 2004 Republican National Convention in New York City serves as a cautionary tale. Here's the way it ran on Drudge:

DRUDGE REPORT XXXXX MON AUG 30, 2004 21:18:05 ET XXXXX

MEDIA ELITE TOAST MCCAIN AT ELITE EAST SIDE BOITE

"Arizona Republican Sen. John McCain hosted a hyper-exclusive birthday party for himself at La Goulue on Mad Avenue on the eve of the convention, leaving no media icon behind.

"WASHINGTON POST reports Tuesday how guests included NBC's Tom Brokaw and Tim Russert, ABC's Peter Jennings, Barbara Walters, Ted Koppel and George Stephanopoulos, CBS's Mike Wallace, Dan Rather and Bob Schieffer, CBS News President Andrew Heyward, ABC News chief David Westin, Time Warner CEO Richard Parsons, CNN's Judy Woodruff and Jeff Greenfield, MSNBC's Chris Matthews, CNBC's Gloria Borger, PBS's Charlie Rose -- pause here to exhale -- and U.S. News & World Report publisher Mort Zuckerman, Washington Post Chairman Don Graham, New York Times columnists William Safire and David Brooks, author Michael Lewis and USA Today columnist Walter Shapiro.

"They and others dined on lobster salad, loin of lamb, assorted wines, creme brulee, lemon souffle and French tarts."

[ more next Tuesday . . . ]