Erik Spanberg: Business in racing

COMMENTARY

Wanted: Marketing executive to sell expensive NASCAR sponsorships for a team that hasn’t won a race in a decade. Also must be able to overcome a slumping economy and competition from other, more successful NASCAR teams seeking sponsors.

Warning: Not for the faint of heart.

Welcome to Mike Bartelli’s job description.

For Bartelli, who spent the past eight years working to pair companies with teams, his new role as chief marketing officer at Petty Enterprises offers all the challenges – the corporate world’s euphemistic term for “impossible slog ahead” – anyone could want.

His arrival is among many changes made at Petty Enterprises this summer in an effort to revive the racing operation.

In June, private-equity firm Boston Ventures bought a significant stake in Petty Enterprises, bringing much-needed cash and business acumen to a family business struggling to keep up in NASCAR’s modern incarnation. Terms of the deal weren’t specified, but the changes are already becoming apparent.

A board of directors, including Richard Petty, the legendary driver and son of the organization’s founder, will steer decisions and strategy.

Kyle Petty, Richard’s 48-year-old son, has juggled much of the business and competition duties during the past decade. Although Kyle will continue driving in the short term, it’s readily apparent that a transition plan is in the works. What’s more, he’ll remain influential but also gain some help as Petty Enterprises adds people.

With Boston Venture’s investment came new CEO David Zucker, whose resume includes stints at Midway Games, ESPN and Playboy Enterprises. Zucker, in turn, installed Bartelli to handle all sales, marketing and licensing for Petty Enterprises. With two Sprint Cup teams and no full-season primary sponsors signed for 2009, he has his work cut out for him.

Bartelli has seen NASCAR from a range of perspectives in his previous jobs: marketing agency (Millsport), merchandising (Action Performance) and track (International Speedway Corp.).

Working on the team side never appealed to him, he says. Until now.

“I never thought race teams were marketing-driven organizations. They looked at marketing as a necessary evil. With the sport exploding, they could do that.”

Now times have changed, Bartelli says.

“With the economy more challenging and NASCAR’s popularity leveling off – we’ve settled down as a sport into the position we’re in – NASCAR teams are going to have to elevate their game.”

The change in circumstances, coupled with Boston Ventures’ investment and the Petty family’s iconic role in NASCAR, convinced Bartelli to take the job.

There are some building blocks in place. Kyle Petty has become NASCAR’s de facto ambassador, known for charity motorcycle rides and the creation of the Victory Junction camp for children with serious illnesses. He’s also won kudos as a part-time analyst on cable network TNT’s race coverage. His father remains The King, revered as a living legend and an able pitchman.

On the track, though, Petty Enterprises continues to run at the back of the pack. Richard Petty accounted for seven of the organization’s 10 season championships and 200 of its 268 race wins. Just one problem: he retired in 1992. And Petty Enterprises last put a car in victory lane in 1999.

The other Sprint Cup entry is driven by Bobby Labonte, who signed a four-year contract extension when Boston Ventures signed on.
Plans call for the addition of a third Sprint Cup team in the near future.

First, though, Petty Enterprises must find sponsors – and solid footing on the track – for the cars driven by Kyle Petty and Labonte.
That means improving engineering and all other aspects of the racing operation. All of which is expensive and explains why NASCAR’s King went in search of some spending money in the first place. The Pettys are part of a recent trend that has seen George Gillett Jr. buy a majority stake in Ray Evernham’s race team and Fenway Sports Group plunk down tens of millions of dollars for a piece of Roush Racing.

Forbes magazine ranks Petty Enterprises 12th among 15 significant NASCAR teams in value, at $44 million.

It’s no mystery that the teams with stables of big winners – Hendrick Motorsports, Joe Gibbs Racing, Richard Childress Racing and Roush Fenway – all rank near the top. Each of those teams generates revenue of $100 million or more annually, the magazine estimates. And Petty? Revenue was just over one-third of that, at $37 million.

Bartelli acknowledges a turnaround will take time. He says everyone at Petty has ambitious but realistic expectations. Just as there are questions about Petty to be answered, so, too, must uncertainties over NASCAR and the economy be resolved.

“The sport is in good position to weather the storm,” Bartelli says. “What we don’t know is how long the storm will last.”

• Mentioned Drivers:
• Bobby Labonte