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May 3, 2007

Mergers and Acquisitions
By Dennis Michelsen
It is now official; NASCAR has reached the pinnacle of sports! How did this happen? When did this happen? What move indicated that this in deed has happened? NASCAR racing is all about big business now and less about the racing than ever before. Don't get me wrong the racing is still great. But now the biggest news in the sport seems not to be who is winning but rather who is buying whom. Nowadays the big news is the mergers and acquisitions.

DEI + RYR=?
This week's news that Dale Earnhardt Inc was in serious talks with Robert Yates Racing about a merger was huge news. The two teams involved represent two of the more storied names in NASCAR history. Earnhardt represents the driver side of the equation. Yates revolutionized the engine building business in the sport. Neither team is exactly a juggernaut right now but combine the two organizations strengths and you might have one heck of a team! DEI is one of the best on the marketing side with the number one marketable driver in the sport in Dale Earnhardt Jr. Yates Racing struggles on the marketing side but still is well respected from the technical side, especially in the engine department. The only crazy part of this deal is that both teams are firmly entrenched with different manufacturers. But if that can be worked out this is one merger that makes sense!

Evernham Shoots He Scores
Lately the Evernham Motorsports cars have been as slow as a Zamboni! Perhaps that is what gave owner Ray Evernham the idea to sell half of his business to the owner of the Montreal Canadians! Le Habitants owner George Gillett Jr has deep pockets and NASCAR racing has never been more expensive! Ray's ability to market his team has been pretty good but he lacks having an outside fortune to tap into to keep up with the Jones'…in NASCAR that means the Hendricks! There has not been a lot of fresh news on this development but like all mergers and acquisitions, once the initial public offering is made the stock can be swapped quickly!

Green Monster Meets NASCAR
Leave it to Jack Roush to start a new trend by selling half of his team to the Fenway Group, owners of the Boston Red Sox. Roush-Fenway Racing has everything it needs to dominate the sport but has gotten off to a sluggish start this season. But give the marketing arm of this new team time to crank up the sponsorship dollars and you should see big improvement in the results on the track. There are some concerns about the direction management is taking this team though with all the whispers in the garage area about Mark Martin's departure still fresh. Just what was the main reason Mark is so much happier in a Chevy for Ginn Racing? While questions linger there is no doubt that this merger has produced a formidable opponent if managed correctly by the racers instead of the marketing department!

In big business companies are being gobbled up and are merging together all the time. The next three years are certain to see this trend accelerate in certain industries. NASCAR has made it to the big leagues because they learned the game of mergers and acquisitions!