Monday, November 29, 2010
Richard Petty to chair revamped team
By David Newton
CHARLOTTE, N.C. -- Richard Petty has partnered with Medallion Financial Corp and DGB Investments to restructure the financial assets of Richard Petty Motorsports and regain control of the company.
Petty will serve as chairman of RPM and oversee much of the day-to-day operations of the organization that was left in financial ruin by former majority owner George Gillett Jr., who no longer has ownership.
RPM will operate as a two-car organization with AJ Allmendinger in the famed No. 43 that Petty drove to 200 wins and seven championships and Marcos Ambrose in the No.9.
Sources said rights to the owner's points for the No. 98 driven by Paul Menard are moving to Menard at Richard Childress Racing and the points from the No. 19 driven by Elliott Sadler are expected to go to the No. 21 owned by the Wood Brothers.
Andrew Murstein, the president of Medallion Financial, said he agreed to get involved only if Petty made a substantial commitment along with his company and DGB. While he couldn't divulge details due to a confidentiality agreement, Murstein said all three parties invested millions of dollars.
Murstein said during negotiations there was a point where RPM could have gone under.
"Things were shaky for a while,'' he said. "Part of why we're doing this is we wanted to help save the great legacy Petty has in this sport. If we didn't move as quickly as we did I'm not sure the Petty name would have continued in this sport.''
Murstein said the more than $100 million of debt on RPM operations has been paid off.
"A fresh start for Petty coming in with no debt,'' he said.
Murstein added that the current management group will stay in place but that his company that has majority ownership and RPM are talking to others to "help run it.''
Petty in a prepared release said "Today is a great day for me, our family, our fans and our wonderful sponsors.''
Petty began looking for financial investors to save the company when it became apparent Gillett's financial difficulties over the sale of the Liverpool soccer team had put the race organization in jeopardy.
It was reported last week that lending firm Mill Financial has sued Gillett for breach of contract, claiming Gillett owes $117 million in connection with the soccer team.
The sale of RPM's racing assets to Medallion Financial and DGB Investments not only takes Gillett out of ownership but also Ray Evernham, who remained a minority owner after selling what was Evernham Motorsports to Gillett in 2007.
Evernham spent much of the past month trying to help keep RPM afloat. He said before the season-finale at Homestead-Miami Speedway he would consider legal action if that's what it took to recoup the millions owed to him by Gillett.
On the restructured deal, Evernham said, "I've been kept in the dark throughout the whole process as much as I tried to help.''
Murstein said he was approached by Petty and business manager Brian Moffitt about three weeks ago. He said NASCAR and the France family played a big role in moving the deal forward quickly, noting the sale of the car numbers was a holdup before the governing body stepped in.
Medallion Financial was started in 1937 by Murstein's grandfather, who began purchasing taxi licenses, otherwise known as medallions, for $10. Those medallions are now worth $800,000 each.
In 1994, Murstein formed Medallion Taxi Media based out of New York City and began selling advertising space on the tops of cabs. That has since moved to the hoods and trunks to the point some cabs are being wrapped like NASCAR cars.
Murstein said that's what made NASCAR such a "perfect fit'' for his company.
Murstein said he began looking at NASCAR as an investment several years ago when his company raised a $216 million sports fund. He was interested in Yates Racing, Petty Enterprises and Evernham Motorsports at the time but was outbid when they were being sold.
"As George Gillett started selling assets I thought maybe this was next on his list,'' Murstein said. Gillett also formerly owned the NHL's Montreal Canadiens.
DGB Investments is an investment vehicle of Canadian-born investor Douglas G. Bergeron, CEO of VeriFone Systems Inc. of San Jose, Calif.
"With Richard Petty's unmatched name and reputation in the motorsports industry, I know this investment is well-timed to succeed,'' Douglas Bergeron said in a statement. "We are going to help put Richard Petty Motorsports back in victory lane."
Murstein said the ultimate goal is to grow RPM back into a four-car operation, but for now the focus is on making two cars work.
"Now that there is no debt, I think it will do quite well,'' he said.
David Newton covers motorsports for ESPN.com.