Dale Earnhardt Jr. Likely Facing Giant Payday With New Team

Richard Childress (l) Dismisses Reports That He Has Already Signed Earnhardt Jr.

Richard Childress Racing Owner Richard Childress this morning “dismissed reports that he had already signed” driver Dale Earnhardt Jr., adding that they “had not had a conversation concerning this as of yet,” according to Rea White of NASCAR SCENE. Childress: “Dale Jr. just made a major decision in his career and in his life yesterday. ... We will sit and talk, I’m sure. I’m hoping he’s considering us, but I think right now we just give him some time and some space” (SCENEDAILY.com, 5/11). WGHP-Fox in Winston-Salem, North Carolina, had been reporting that Earnhardt and Childress were “negotiating late Thursday night” and that an announcement “could come as early” as today (MYFOXWGHP.com, 5/10). Earnhardt is NASCAR’s highest paid driver at $20.1M (HARTFORD COURANT, 5/11). CNBC’s Darren Rovell said Earnhardt could make over $30M with a new team because “we’ve never seen a guy come with his sponsor” (“NASCAR Now,” ESPN, 5/10). In St. Pete, John Romano: “Junior is in a better position than ever. Perhaps the best bargaining position a NASCAR driver has ever known. He can name his price. He can name his conditions” (ST. PETE TIMES, 5/11).

BUDWEISER: The Budweiser brand has been the primary sponsor of Earnhardt’s car since his Cup debut in ’99, and in Charlotte, Steve Harrison notes Budweiser has a deal with DEI for the car and a separate marketing agreement with Earnhardt, which dictates the driver “can’t have another beverage sponsor other than the beer.” The DEI deal expires at the end of this season, while Earnhardt’s deal runs through ’08 (CHARLOTTE OBSERVER, 5/11). Anheuser-Busch VP/Global Media & Sports Marketing Tony Ponturo in a statement said, “Budweiser and JR Motorsports have an agreement in place to ensure Dale Jr. will continue to personally represent Budweiser through 2008, and we look forward to discussing our future with Dale Jr. and DEI in the weeks ahead” (Budweiser). In N.Y., Viv Bernstein notes if Budweiser “remains an Earnhardt sponsor that could be a problem” for potential deals with Joe Gibbs or Richard Childress. Gibbs “does not want to be involved with an alcohol sponsorship and Childress has one with Jack Daniels, creating a conflict” (N.Y. TIMES, 5/11). Gibbs Racing President J.D. Gibbs said Budweiser “is a great partner in the sport, but for us it would be tough” (ESPN.com, 5/10).

Earnhardt Jr. To Endorse Budweiser Brand At Least Through ‘08

SELLING PLATFORM: NASCAR VP/Licensing Mark Dyer “expected Earnhardt merchandise would remain the sport’s top seller.” Dyer: “There’s no reason to believe he won’t be an extremely valuable license no matter where he goes” (USA TODAY, 5/11). Millsport Senior VP/Motorsports Mike Bartelli said that the “possible frenzy over new Dale Jr. merchandise could be similar to a boom in sales after his father died.” Bartelli: “I think people are going to snap up the remaining No. 8 hats. And when he moves to a new team, it’s going to be a big day.” JR Motorsports VP/Marketing & Brand Development Thayer Lavielle speculated “about introducing a farewell line of merchandise.” Lavielle said with a new team, “We will look to control the licensing. I won’t say total control, but control” (CHARLOTTE OBSERVER, 5/11).

NEW ERA IN RACING: Texas Motor Speedway President Eddie Gossage in a statement said, “Just as Andy Messersmith ushered in the era of modern-day free agency in [MLB], Dale Jr. is establishing modern-day free agency in NASCAR.” He said drivers like Jeff Gordon, Jimmie Johnson and Tony Stewart are likely to “dip their toes in the free-agency waters when their current contracts expire” (TMS). More Gossage: “This is going to raise the profile of the sport even further” (FT. WORTH STAR-TELEGRAM, 5/11). NASCAR VP/Corporate Communications Jim Hunter: “I can’t think of a better person to represent our sport as far as free-agency than Junior. This will increase focus on our sport” (K.C. STAR, 5/11). ESPN.com’s Terry Blount wrote this “should be a frenzied free agency period that could shake the sport by causing long-term ripple effects in driver salary and sponsor deals” (ESPN.com, 5/10). The TIMES’ Bernstein writes Earnhardt’s free agency “will send ripples throughout the sport, potentially affecting driver salaries, merchandise sales and even television ratings, not to mention the balance of power among race teams” (N.Y. TIMES, 5/11). ESPN’s Tim Cowlishaw: “Most of the best drivers have stayed with their teams, but when (other drivers) see the millions he’s going to get — probably from another Chevrolet team — the drivers who are even better ... might be testing the waters” (“SportsCenter,” ESPN, 5/10). In Seattle, Holly Cain writes this is the “dawning of NASCAR’s first true free agency market.” It is also the “sign of a new time in a sport that bills itself as a true family in the business of entertaining families” (SEATTLE P-I, 5/11).

WITHER DEI? Officials at DEI “confirmed privately they had offered a 51[%] majority interest to Junior for about $55[M]” (FLORIDA TIMES-UNION, 5/11). In Atlanta, Rick Minter notes Earnhardt was “careful not to criticize DEI,” which is owned by his stepmother, Teresa, at his announcement Thursday. DEI, “which vowed to carry on, was equally respectful, sending [President of Global Operations] Max Siegel and [VP & GM] John Story to the JR Motorsports shop for the announcement” (ATLANTA CONSTITUTION, 5/11). Story said that his team “plans to carry on with the No. 8 even after Earnhardt departs at the end of the year.” Story: “We’ll run the 8 with some other driver” (ATLANTA CONSTITUTION, 5/11).

Siegel Says DEI Is Looking For Ways To Diversify Revenue Streams

FUTURE OF DEI: Earnhardt said that “one of the main reasons he chose to leave DEI at this time is because he doesn’t feel the team is prepared to provide him with a championship-winning car any time soon.” Siegel said that his team’s cars “are on par with many in the garage, but that’s not good enough when your driver is the sport’s most visible personality.” He added that DEI “will look at diversifying its income stream by finding ways to create revenues in addition to the money they get from sponsors and race purses” (ATLANTA CONSTITUTION, 5/11). ESPN’s Marty Smith noted there is speculation that DEI and Robert Yates Racing could merge. Smith: “That’s being thrown around the industry right now” (ESPNews, 5/10). YAHOO SPORTS’ Jerry Bonkowski wrote Earnhardt’s departure “will allow [Teresa Earnhardt] to run DEI the way she sees fit, free and unimpeded, without having to worry about what the rabid Junior fans will say –- or complain about” (SPORTS.YAHOO.com, 5/10). ESPN’s Rusty Wallace: “Just because Dale Jr. leaves Dale Earnhardt Sr.’s team, ... it doesn’t close it down and cripple it” (“OTL,” ESPN, 5/10). But The Bonham Group VP & COO Shawn Bradley said, “It’s certainly going to damage them in the near future. They are going to have a difficult time finding a replacement. In the long term, time will tell. ... Wherever he lands, that team is going to be one of the biggest in Nextel Cup” (K.C. STAR, 5/11).