October 15, 2007

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NASCAR’s Gordon and Johnson Fined

June 26, 2007

CHARLOTTE, N.C. (AP) — Jeff Gordon and Jimmie Johnson were docked 100 points each Tuesday, and their crew chiefs were both fined $100,000 and suspended for six races for violations at Infineon Raceway.

The two Hendrick Motorsports cars failed an initial inspection Friday in Sonoma, Calif., when NASCAR officials found unapproved modifications to the fenders on their Chevrolets. NASCAR refused to let either driver on the track the entire day, and neither was allowed to qualify.

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But the fenders were fixed, the cars passed inspection Saturday and were allowed to race Sunday. Gordon, the four-time series champion, finished seventh while defending Nextel Cup champion Johnson was 17th.

Gordon remains the Nextel Cup points leader after the deduction, but his margin was cut to 171 points over Denny Hamlin. Johnson dropped from third to fifth.

But both will have to race through the summer without their crew chiefs. Chad Knaus and Steve Letarte are not eligible to return to the track until Aug. 15. The crew chiefs also were placed on probation through the end of the year.

Car owner Rick Hendrick said he was disappointed and called the penalties “excessive.”

“Right now, all of our options are being evaluated, including our personnel situation and a possible appeal to the National Stock Car Racing Commission,” Hendrick said in a statement. “We’ll take some time to decide on a direction and make an announcement regarding our plans for New Hampshire later in the week.”

Gordon and Johnson are the most dominant drivers in NASCAR this season — they’ve won four races each — and Hendrick Motorsports has 10 victories this year.

Hendrick traveled to California after the failed inspection, and argued his crew chiefs were operating in a “gray area” of the NASCAR rule book as it pertains to the new Car of Tomorrow.

“I don’t necessarily say they bent the rules — I think they thought they were working inside an area in which they could,” Hendrick said. “It’s going to be tough, as we go forward, on what’s intentional and what’s accidental and how they handle it, so you’re definitely going to have to show up with these things measured up.”

But NASCAR has insisted this season that there no longer are any questionable parts of the rule book, particularly when it comes to the COT. Teams were warned in March that any infractions dealing with the car were subjected to a loss of 100 points, a $100,000 fine and a six-race suspension.

NASCAR adhered to those guidelines last month when it penalized Dale Earnhardt Jr. and his crew chief, Tony Eury Jr., for modifications found on the wing of their COT at Darlington Raceway.

Now the Hendrick teams have been hit with the same penalties, although many believed Knaus — a repeat offender — should have received a stiffer punishment.

This is at least the 15th time Knaus has been penalized for something during his crew chief career, and this was his fourth suspension since 2001. He sat out four races last season when NASCAR found illegal modifications following Johnson’s qualifying run for the Daytona 500.

Johnson went on to win the 500, and again at Las Vegas, without Knaus. The two reunited in March and went on to win their first championship.

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Tactical error

May 11, 2007

By Dan Wetzel, Yahoo! Sports

The Boston Red Sox once sold Babe Ruth so its owner could fund a play. The Portland Trail Blazers once passed on Michael Jordan. The Minnesota Vikings once traded five players and six draft picks for Herschel Walker.

None of those moves were as disastrously bad as the one Teresa Earnhardt made when she thought she could call Dale Earnhardt Jr.’s bluff about leaving his late father’s racing team.

Her stepson was serious. Painfully so for DEI.

Thursday at his JR Motorsports headquarters in North Carolina, Earnhardt Jr. announced he is leaving DEI. Whether he is going to drive for his own team or will join an existing competitor is not certain.

What is known is that he’ll still be sponsored by Budweiser, still will drive a Chevy and, of course, still be the overwhelmingly most popular and recognizable driver in NASCAR.

Only now, he’ll be doing it for even more money and even more (if not total) control.

Junior had asked for a majority stake of DEI to stay. No one yet knows how negotiations between Junior and Teresa broke down – maybe Teresa really did all she could, but it doesn’t seem like she was willing to give Junior the 51 percent control he wanted. Now she has 100 percent of a company in ruin.

Financially, the best move for Junior would be to expand his JR Motorsports, currently a Busch Series operation, to Nextel Cup, where he and current teammate Martin Truex could form a two-car team. With engine and technical support from Hendrick Motorsports, winners of seven of the season’s 10 races, it could be a formidable team from Daytona on.

Most importantly, it would allow Junior to control the outrageous revenue he brings in, cashing in on the popularity that made him bigger than DEI, even if DEI couldn’t realize it.

Since his father’s on-track death in 2001, Earnhardt Jr., now 32, has become the driving force in all of NASCAR. He has what, half the fans? Sixty percent? Seventy? Any track, any weekend is a home game for Junior, as a sea of red-clad worshippers make him more beloved than his nearest competitors – the likes of Tony Stewart and Jeff Gordon – combined.

When Junior takes the lead the place goes nuts. When someone bumps him into a wreck, they’ll be met, eventually, with a hail of boos and beer cans from the grandstands.

There essentially is nothing else like it in sports. Only Tiger Woods controls golf in the same manner – assuring crowds, television ratings and revenue. But Woods doesn’t play every week, and culturally golf and NASCAR fans are little alike.

Even so, you wouldn’t see Nike Golf let Tiger walk under almost any circumstances. You wouldn’t see Nike co-founder Phil Knight assume he could just rebuild the division with someone else. Nike knows Tiger is the golf division.

That Teresa Earnhardt didn’t see the same in her stepson is stunning. Maybe she really never does show up at the track? Maybe she really never talks to Junior and still thinks he was some silly, hard-partying kid who didn’t know the difference between tens of millions and hundreds of millions?

Whatever it was, it was a colossal miscalculation.

If both Junior and Truex leave (Truex’s future is unknown), DEI’s Nextel Cup driver stable would consist of rookie Paul Menard and, uh, yeah, that’s it.

It will still have the Intimidator’s likeness to sell – a considerable cash stream. And Jeffrey Earnhardt – Senior’s grandson and Junior’s nephew – is under contract, but he’s 17 and several years away, if ever.

But other than that, it’s a leveling of the company. By not sharing more with Junior, Teresa wound up with all of nothing.

Meanwhile, if Junior keeps this in-house at JR Motorsports (where his sister Kelley is president) he officially can begin to print money. His new operation will select its marketing partners from a crush of Fortune 500 companies.

In terms of merchandise sales, this could be historic; the most popular driver with a new car and number.

Many fans hope Richard Childress Racing would surrender the rights to Senior’s No. 3 and allow Junior to run it himself, but no matter the number, there are millions of Junior fans now in the market for new T-shirts, bumper stickers, key chains, flag, tattoos and heaven knows what else. The No. 8 is obsolete.

It’s like the New York Yankees changing colors. Only with more fans who are more loyal.

If Junior is as smart as he has demonstrated recently, he’d invest some of that revenue into a great CEO for JR Motorsports.

And that is, perhaps, why just joining an existing team, albeit with a hefty compensation or partial ownership deal, would be the better choice. The demands of being an owner-driver can become too big. It’s a double responsibility that has proven extremely challenging for Michael Waltrip and Robby Gordon.

Earnhardt needs to concentrate mostly on driving.

Of course, it’s not like he’s been tearing up the track. The most remarkable thing about his popularity is that it is not – like Tiger Woods’ – based on dominating the competition.

Junior never has won a Cup title, hasn’t won a race in a year and has taken checkers just twice since 2004. Yet he has the most fans.

The on-track results had to factor into his decision to walk. It’s not like DEI was giving him the best car each week to begin with. If they weren’t going to meet his business demands either, what was the point?

But for whatever reason, Teresa Earnhardt figured he wouldn’t leave his daddy’s company. Maybe she underbid him. Maybe she refused to give up control. Maybe she banked on a family discount.

Whatever it was, she guessed wrong. Terribly so. The good news for DEI is it only took the Red Sox 86 years to recover from something so dumb.

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Dale Jr and DEI

April 24, 2007

CHARLOTTE, N.C. (AP) — Taking control of DEI, his late father’s company, might come at too high a price for Dale Earnhardt Jr.

Last week, ESPN reported DEI offered Dale Earnhardt Jr. 51-percent ownership, which NASCAR’s most popular driver quickly denied. That’s not to say there weren’t informal discussions, rather it could be Junior simply stopped listening once he heard the asking price.

Several people familiar with the contract negotiations told The Associated Press that DEI has not made a formal offer and that any discussions centered around the 51-percent ownership share came with a steep asking price — $55 million or more — that the Earnhardt Jr. camp didn’t take seriously.

That number would be in line with the going rate for a stake in a NASCAR team. Boston Red Sox owner John Henry is believed to have spent about $60 million in February for a minority stake in Roush Fenway Racing.

Those familiar with the negotiations requested anonymity because they were not authorized to speak.

When reached Monday, Junior’s sister Kelley Earnhardt Elledge declined comment, citing the reporting of inaccurate information over the weekend in her desire to refrain from commenting until a formal announcement.

Junior has been steadfast in his demand for majority ownership throughout the three-month negotiations. But who knows if he can even afford to meet the asking price?

And should he even be expected to pay for a stake in the team?

He and Elledge have said they believe Dale Earnhardt started DEI as something to leave behind for his four children.

“The idea is that the company would be left to the children, and we want to make sure that there is a formidable business left there we can take on for our generation and then our children and then on and on,” Elledge said earlier this month. “It’s very important to us.”

If Dale Earnhardt were still alive, would he have sold shares to his son or simply handed over control when Junior was ready to run an empire?

Stepmother Teresa Earnhardt might know the answer, but she’s not saying. Instead, she has appointed Max Siegel, president of global operations for DEI, to speak on her behalf.

Silent through most of the negotiations, Siegel has said he didn’t want to publicize the ongoing contract talks. He broke that rule last Thursday, telling ESPN that DEI has “worked hard to address everything” that Junior sought, without discussing specific percentages.

Since the report came out, Siegel has gone silent again. Neither Siegel nor other DEI representatives responded to multiple interview requests from the AP.

There has been talk that to get a majority-ownership stake Junior would have to agree to a DEI board of directors that would make all major decisions, according to those familiar with the negotiations.

But it makes little sense for Junior to accept that. Being forced to run decisions through a board — which likely would include Teresa Earnhardt — circumvents what he’s trying to accomplish.

He doesn’t want control to get rich. He wants it to win championships. And his desire to run the company is what he and Elledge believe it will take to get DEI to NASCAR’s upper echelon. Although the team is competitive, it has yet to consistently challenge for a Nextel Cup title, and Earnhardt hasn’t been a legitimate championship contender since 2004.

Elledge recently issued a 45-day deadline to settle the contract issue, putting pressure on DEI to get moving. But ESPN’s report of a majority ownership stake offer caught Elledge and Junior off guard — something Junior was less than pleased about.

That might backfire on DEI.

With only six weeks left in Elledge’s timeframe to come to a formal agreement, it seems the two sides have never been farther apart.

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