Tactical Error
By Dan Wetzel, Yahoo! SportsMay 10, 2007
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.
By Dan Wetzel, Yahoo! SportsMay 10, 2007
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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