Wednesday, June 11, 2008
Equity firm's partnership injects new money into Petty Enterprises
By David Newton
CONCORD, N.C. -- The inscription on Richard Petty's belt still says "King Richard."
But Petty no longer is the king of Petty Enterprises -- at least from an ownership standpoint.
Petty has sold majority ownership of the company his father started in 1949 to Boston Ventures, a private equity firm, in hopes of restoring NASCAR's most storied franchise to the prominence it held when he was winning seven championships.
Boston Ventures will have four seats on the new board, to three for the Pettys.
"Yeah, but I've still got the biggest hammer," Petty said with a laugh.
Wednesday's announcement at Lowe's Motor Speedway also included the naming of David Zucker as chief executive officer and the signing of 2000 Sprint Cup champion Bobby Labonte to a four-year extension.
Among those in attendance was NASCAR chairman Brian France, who said there would be nothing better for the sport than to see Petty Enterprises regain its status among the elite organizations.
"You can rest assured we at NASCAR are very excited for the Petty family and look forward to seeing how things work out," France said.
The move, as Petty's son Kyle called it, was a "huge step forward" for an organization that hasn't won a race since 1999. It will give the company the financial stability to keep up with big-money teams such as Hendrick Motorsports and Roush Fenway Racing.
It will allow Robbie Loomis, the vice president of racing operations, to more immediately purchase equipment and hire people that in the past took three to six months to get past the idea stage.
"Everything has changed so much from where we first started, and as time progressed, it really got away from us," Richard Petty said. "We just got behind and we tried to do it from the automotive deal, from the inside out.
"We finally set down and said, 'OK, guys, if we're going to play this game, we've got to get in the game.' The only way we could get in the game was to get new money coming in."
The Pettys have been negotiating with Boston Ventures, one of the leading private equity firms in the United States, for about a year. Many other companies were considered, but what made this one most attractive was it allowed the Pettys to keep the name of the company and Richard Petty to maintain control of racing.
It also allowed the Pettys to move the Petty Driving Experience and other programs completely under the Petty umbrella.
"I'm not going away," Richard Petty said. "I'm still going to be out there aggravating people doing my thing. From the outside you're not going to see any difference, except hopefully the team gets better."
Boston Ventures has been the lead investor for several companies, including American Media, Inc. (The National Enquirer); Billboard Publications; Continental Cablevision; Marshall & Swift Motown Records; River City Broadcasting; and Six Flags Entertainment.
Labonte, who drives the No. 43 that Richard Petty made famous, said the partnership made his decision to re-sign simple.
"It definitely was the thing that swayed me in the right way," said Labonte, adding he will have a limited partner role in the company as well. "They're bringing the things we need as a race team to move forward."
The decision to sell was an emotional one for the Pettys, but not as emotional as the move from Level Cross, N.C., to Mooresville, N.C., earlier this year.
The success of other partnerships -- Roush Fenway Racing and Gillett Evernham Motorsports -- helped convince Richard Petty to pull the trigger.
"You're talking about what's good for the future as a family business as far as I'm concerned," he said.
Petty and Andy Davis, managing director of Boston Ventures, insisted the deal is more about partnership than who is in control. Davis said Petty Enterprises was attractive for several reasons, none less than the chance to market Richard and the Petty brand.
Petty said he felt comfortable with Boston Ventures because of the company's past association with family-owned businesses and commitment to restoring the family name.
He said the deal is structured so that a Petty will remain on the board long after he is gone -- not that he is planning on going anywhere soon.
"If things get screwed up it still comes back to me," he said.
Petty's plan is to expand to a three-car team as soon as possible, which, according to Loomis, will be no sooner than 2010. At that point it is feasible that Labonte will be in one car, Petty in the No. 45 driving a part-time schedule, as Mark Martin does for Dale Earnhardt Inc., and another driver full-time in the third car.
But Loomis said the organization could run three cars in seven to 15 races next season. Chad McCumbee, who has replaced Kyle Petty in two races, is a candidate for that ride.
But all parties reminded it could take a year or two before the benefits of the merger are fully realized.
"A large part of it is depth of people," Loomis said. "When some crew chiefs get suspended from other teams their organizations are so deep that they can come back at you the next week.
"We have to build to where we're at that point."
Zucker, bringing the experience he had working 11 years with the Walt Disney Company, including eight years at ESPN, will be a big part of that building.
"One of the reasons I'm comfortable coming into this role is that industry veteran Robbie Loomis is in place leading the race team operations," he said. "Robbie knows how to build a winning race organization."
Kyle Petty will relinquish his role as president of the company to focus on driving and managing the Victory Junction Gang Camps for chronically ill children with his wife, Pattie.
He said the merger was inevitable in a day when money controls the sport. Only a few months ago, he stated no investment company had come into the sport and challenged top organizations such as Hendrick Motorsports.
"And I stand by those words," Kyle Petty said. "Roush Fenway has been the best at that and Gillett is moving in that direction. . . . Don't look for an initial bump. It's going to take time to get our feet wet, to understand what this is all about and move forward."
But the plan is to move forward.
"We are not that arrogant to think this can happen over night," Davis said. "But it is our goal to bring back Petty Enterprises to its former glory."
David Newton covers NASCAR for ESPN.com. He can be reached at firstname.lastname@example.org.