Jun
18

A Motor Sports Post About Busch, Miller, And Budweiser

Kyle Bush is NASCAR's hottest free agent

Last week was Dale Earnhardt, Jr. week. The press ate him up when he decided to leave DEI. Then everyone was wondering who Jr. would sign with. Would he keep the #3 car? Would he keep Budweiser as a sponsor? A press conference date and time is established…he is joining Hendrick Motorsports!

The dust has settled now, and we are back to talking about the only sport that the media discusses year-round, football. But there is still an interesting story to be told in the world of motor sports. Before Earnhardt, Jr. signed with Hendrick, Rick Hendrick, owner of Hendrick Motorsports, said that 4 drivers was all that the team wanted [Dale Earnhardt Jr. Announcement Scheduled For Wednesday Morning]. That meant that someone was on his way out. It ended up being Kyle Busch, a 22-year-old kid with quite a lot of talent.

Busch will be fine as he searches for a new team to join, but he still decided to fire his agent. His former agent, Alan Miller (a former runningback for the Oakland Raiders and general counsel for the NFL Players Association), did not keep an open line of communication with Busch in the past regarding contract talks, which is a big no-no [Agent kept Kyle Busch in dark during contract extension talks]. A sports agent has a fiduciary duty to his/her clients, which should include informing them about their financial situation at all times. That includes any and all progress in contractual negotiations with motor sport teams.

Kyle Busch had no idea that other teams were interested in acquiring his racing skills, which ticked off Hendrick. He has signed a new agent, Bruce Kempton, who has “heard from just about every organization in the Nextel Cup garage” about having interest in signing Busch [Robert Yates Racing ‘interested’ in signing Kyle, Kurt Busch]. It just goes to show you how important it is to keep your clients happy at all times. One of the worst things to do is to keep your client in the dark about his own life. It looks like Miller just lost himself NASCAR’s most sought-after free agent.

-Darren Heitner

  • Drew

    Big mistake by Miller to lose Busch. He is certainly an up and coming driver in the sport. An interesting problem I read about that the Hendrick team is going to face is what to do with Budweiser. From what I read they already have their four big sponsors lined up for next year and they said they are going to honor those commitments but where is Budweiser going to fit in. It seems like Budweiser wants to stay with Dale Jr. but is there going to be space for them? I also saw the possiblity of a “trade” between Hendrick and DEI and let Busch still drive his #5 car for DEI while Jr. drives the 8 car for Hendrick. I’m not sure if driving a different car will change Jr’s image at all since everyone recognizes his #8 car but we’ll see. I’m not a NASCAR fan really but it has certainly grown and it will be interesting to follow what happens between these teams in the near future.

  • chris

    I think Busch will end up at Ginn, DEI has their sights on another driver right now.

    The #8 isn’t a brand, Dale Jr is the brand, the #8 is just a secondary piece of that brand. Dale, Jr’s has the largest fan base in NASCAR, by far, and the most devout. His merchandise sales last year was 35%-40% of the entire NASCAR market! It doesn’t matter if he drives the 8 or the 71, his fans will buy his stuff, period. Now, going to a team like Hendrick, if he puts up the wins like Johnson and Gordon have done recently and wins a championship he’ll likely get to 50% of the NASCAR merchandising market.

    I figure Budweiser will be involved with Junior in a personal endorsement relationship and will get probably 8 races or so a year as his car’s primary sponsor. There’s just too much other money involved right now. Budweiser was paying an insane amount of money, compared to other primary sponsors, to be associated with Dale, Jr. Now that he’s at a team that can flat out win championships his primary sponsor’s value goes way up. With Visa in the mix there’s just more value.

    I would guess (based on inside info) that he’ll run a car next year with essentially 3 primary sponsors. The National Guard, Visa, and Budweiser. Hendrick will put Jr in the 8 that they buy from DEI, then Mears will run the #5 with Kellog’s and GMAC splitting the sponsorship on that car. Once the Guard’s deal with HMS runs out, it’ll be an all out bidding war between companies for 36 races on Jr’s hood!

  • Drew

    Interesting info, certainly Jr makes the brand and his number is only the second piece. I’ll be honest I never realized that drivers change primary sponsors each race (or set of races). I guess I need to watch some more races, great post Chris.

  • http://sportsagentblog.com Darren

    Mainstream America is now talking about NASCAR…you can thank ESPN for that. They still hold tremendous power over what is relevant in sports talk across the country.

  • chris

    In today’s racing world teams need a primary sponsor to pay $50m+ per year. That’s a lot for even major business to shell out, so what teams have done (Jack Roush especially) is setup a few deals. Roush for example has Office Depot as the main primary sponsor on Carl Edwards’ #99 this year, I think Office Depot is doing 28 of the 36 races, then Aflac, Sharp, and another group are splitting the remaining races.

    I think it is a brilliant idea, you can get more money usually. You set your budget and feel you need to get $50m for 36 races, that is $1.38m per race. That per race fee is only good if you buy all 36 races, if you only want to do 10 races, then you have to pay $1.5m per race. So, if the team can find 2-3-4 sponsors to pair together at $1.5m per race they’re actually getting $54m for the year.

    It is really the “new thing” in NASCAR. Roush is doing it, Hendrick, Penske, etc.

    Also, something I think that is really big in the Jr/Hendrick deal is the support that Hendrick is going to provide JR Motorsports. In the last two seasons JR Motorsports has been hit and miss in the Busch Series, three years ago Jr and DEI had Chance2 Motorsports with Martin Truex behind the wheel and he won the title. I’d expect JR Motorsports to expand to at least 2 teams next year (will run some races with 3 teams and Jr behind the wheel). They’ll have Hendrick motors, Hendrick technology, and will win some races, thus making Dale, Jr even more money.

  • chris

    Another note on the Jr/Hendrick deal is that Jr mentioned Rick would be helping him out with things and listed a few things, then mentioned dealerships. Rick Hendrick has made a lot of money from his car dealerships. A Dale Earnhardt, Jr Chevy Dealership would be immensely popular and essentially be a license for Jr to print money!