Ganassi's partnership with Sabates began mergers

In 2001, Indy Car team owner Chip Ganassi got into NASCAR. He did it by merging with Felix Sabates, whose cars had won races and challenged for championships. The deal itself was, at its core, very similar to the Roush Fenway and Gillett Evernham mergers that have dominated the news of late.

As this type of transaction becomes more prevalent in today's NASCAR, teams are being forced to deal with the transition from somewhat of a hobby sport to big, big business, which is why you're seeing team presidents being culled from the herd of sports marketers and business marketers that abound outside the sport.

Ganassi has done both, merging with Sabates and hiring Steve Lauletta as president of the team, so he's probably the foremost expert on the trend.

"In those days, I just felt that sooner or later ... I had been talking about getting involved in NASCAR for a year or two and I just felt like the time was right to get involved," Ganassi said. "Things were priced at a level ... it would be awful hard to do the same deal today that I did then.

"I was fortunate that I ran into someone like Felix."

The reasons were the same as for Fenway and Gillett and the others that will come later, he said.

"If you were talking about value in racing, it was obvious to me that value, in terms of other teams, was somewhat nebulous," Ganassi said. "The value of a NASCAR team, whether it's the TV deal or things like the prize money or the programs or the availability of sponsorship at the time, you'd say it was a better value proposition."

Ganassi also said that motorsports business is not widely understood at the basic level.

"Sports is the only business that has two bottom lines. You have wins and losses and you have profits and losses," he said. "That's what your average businessman may not understand. You can have a poor year on track and a good year off track, all in the same year, and that will turn into a good year off track the following year, and you should be able to maintain your good year on track. The trick is to level it out, instead of having peaks and valleys."

There's your explanation for the merger mania sweeping the sport. Leveling out the peaks and valleys between what works and what doesn't is the key to a successful business that lasts, and the mechanism that powers it is cash and the management of it.

Enter Lauletta, a veteran of Miller Brewing Company who oversaw Miller's sponsorships in NASCAR, the NHRA and the NFL. He's a high-level marketing professional whose job it is to seek out and obtain that power through sponsorship, activation and all sorts of other market-based applications.

Like Max Siegel at DEI, Lauletta has the 10,000-foot view of the race team as a whole, and he makes his moves accordingly, having been on the other side of the fence with sponsors. The days of being in racing because the CEO liked it are long over, he said. It's a business from the word go.

"A lot of it goes back to competition, the expense to be involved, the continuation of sponsors, who are becoming more savvy and more ROI-driven and more brand-driven," Lauletta said. "The days of a company getting involved in anything, be it NASCAR or golf, because the CEO likes it have really gone away. (Continued)