The Frontstretch: Bobby Ginn : The Gambler Rolled "Snake Eyes" by Tommy Thompson -- Wednesday July 25, 2007

Go to site navigation Go to article

Bobby Ginn : The Gambler Rolled "Snake Eyes"

Thompson In Turn 5 · Tommy Thompson · Wednesday July 25, 2007

 

Editor’s Note: As of 12:30 this afternoon, the reported merger between Ginn Racing and Dale Earnhardt, Inc. has become official. Please click here for the latest edition of the Frontstretch newsletter, giving you all the info you need to know about the new team and what it means for all drivers, crew chiefs, and personnel involved.

In what has become the quickest and most dramatic rise and fall of a race team in recent NASCAR history, Ginn Racing has fans, drivers and other owners in the NASCAR garages wondering what in the world has transpired with the team that had been showing so much promise since the drop of the green flag at this years Daytona 500. Since owner Bobby Ginn purchased the two-team organization formerly known as MB2 Motorsports from its previous majority owner Nelson Bowers barely a year ago, what the NASCAR community has witnessed is an illusion…a highly calculated gamble, based on maintaining an appearance of stability to gain acceptance within the sport in hopes of securing significant outside financing, money that was desperately needed to continue the charade. And it was a fairly well orchestrated deception…one that almost worked. The plan’s downfall was simply that no corporate sponsor was ever found that would take the bait that Bobby Ginn set out…and the ruse has now begun to unravel.

Bobby Ginn, a real estate developer from South Carolina, entered the NASCAR scene with a BANG! After Ginn, through his Ginn Clubs & Resorts, had agreed to become the primary sponsor for MB2 for a limited number of races in 2006, it was in short order announced that he had purchased the majority ownership of MB2, leaving minority owner (20%), general manager, and chief executive officer Jay Frye in place. Said Frye, who at the time had been working a deal with Dale Earnhardt, Inc. to merge the teams, "If we hadn't done something, maybe not next year, but at some point, we wouldn't have been here (competing). Now we're solidifying our future. Our organization is going forward. This is not a Band-Aid. It's an opportunity to make this team better for a long time."

Immediately things began to change for the better. New equipment arrived. The two veteran drivers, Sterling Marlin and Joe Nemechek, shortly thereafter saw a marked improvement in their on-track performance. Plans for shop expansion began taking form. A five-year plan to bring the organization into prominence was openly being discussed. Mark Martin was hired to drive on a part-time basis for what was reported to be a very generous price for a full-time driver. A first rate driver development program was initiated, and young drivers, including the accomplished motocross star Ricky Carmichael, were brought on board to be mentored by Martin. And all this achieved within just months of taking financial control of the previously underfunded company. Clearly, Bobby Ginn was a man in a hurry!

It appeared as if money woes were a thing of the past for the second-tier race team. As developments reached lightning speed, the "sky was the limit" as far as Bobby Ginn was concerned. "I do think that companies and people need to have the best. I have a saying I use in business all the time: You can do a little job with a big piece of equipment, but you can't do a big job with a little piece of equipment," said Ginn to his philosophy of growing a successful racing business.

And the very best is what Ginn was providing. He bought a $2.5 million dollar 7-post shaker, for instance, a piece of equipment that few, except for the wealthiest multi-car NASCAR teams, actually owned; most are satisfied to only "time lease" the chassis-building aid. He expanded from a two-car outfit to three, along with purchasing a couple of jets for the race team. Holy cow! The guy even sent his Ginn blimp to the races!

The impact of the infusion of Ginn money was evident at this year's Daytona 500, where Ginn's new part-time veteran Martin lost in a controversial heartbreaker, finishing second to Kevin Harvick by a whisker. And possibly even more impressive was the ninth place finish posted by Joe Nemechek with the new No. 13 team, a car that was not guaranteed one of the coveted top-35 "free passes" into the season opening points race. Along with Sterling Marlin's seventeenth place finish, Ginn made heads turn. Apparently, his Hendrick Motorsports-powered Chevrolets had arrived…and would be a team to take note of in 2007.

By and large, while the early momentum cooled off, the season has been a good one for Ginn Racing, at least up to last week. The No. 01 Army Chevrolet driven by Martin and developmental driver Regan Smith has been stellar, as even with the ride-share arrangement the team is presently sitting tenth in Nextel Cup Owners points. Nemechek has been able to position the new No. 13 team into a coveted top-35 position in the standings, and Marlin has likewise kept the No. 14 ahead of the new well-financed Toyota teams.

Bobby Ginn provided the "seed money" necessary to dress up the race teams, even though two of them have struggled to achieve primary sponsorship this season. He had portrayed himself as a guy with the resources necessary, through his own "deep pockets" and that of his many real estate investment, development, and management companies, to be able to sustain viable race teams. Well, it was an illusion that he created that simply wasn't true. By his own admission, he has spent "tens of millions" to upgrade the race teams…but it was not money that he could afford to not recoup. He gambled on attracting sponsorship dollars needed to not only recoup his initial investment, but to maintain the teams going forward…and hopefully accumulate a tidy profit, as well. But in the end, the big sponsors never materialized.

Ginn is no stranger to playing "fast and loose" with the finances. Rolling the dice and betting that he can stay one step ahead of the creditors until he can "right his ship" seems to come naturally to him. Just look at the history. In the mid-‘80's, Bobby Ginn came onto the scene like gangbusters on Hilton Head Island in South Carolina, full of promises and, as it was eventually discovered…short on cash. The maverick owner bought tracts of land for development back then with what can best be described as "funny money," purchasing in a period when Savings and Loans institutions were only too willing to play along with borrowers like Ginn, who were willing to misrepresent their actual worth to secure loans that if called on, they could not pay back. The plan, though intricate in the amount of paperwork that it takes to pull off, is not, in its premise, all that complicated. Ginn buys some property; he then, with his financing buddies borrows a bunch of money using the original property, appraised by his lending friends at a ridiculously high value, as collateral. The new loan money is then used to keep the creditors at bay on the original property and provide development capital for other properties bought with the questionable loan money. But for the plan to work, other investors and/or buyers, like sponsors for his race teams, need to be lured into contributing cash before time runs out – and no more cash infusions can be had.

The Hilton Head Island venture did not end well for Bobby Ginn. Creditors became nervous as Ginn failed to turn the shaky loan money into profit. People got burned. Lots were sold with promises of utility hookups that never materialized. Ginn filed bankruptcy, and the development properties were sold off to other investors. Bobby Ginn left the island a very unpopular fellow. It is reported that during that period, it was not uncommon on the island to see bumper stickers that said, "Honk if Bobby owes you money." In the book titled Profits and Politics in Paradise: The Development of Hilton Head Island, authors Michael and Patricia Danielson summed up Bobby Ginn's failed development activities by saying, "Ginn left a trail of broken promises, angry property owners, and dashed hopes."

In fairness to Ginn, he did overcome his Hilton Head failures and misdeeds and has since regrouped during the last twenty years, building what appears to be a successful and extensive real estate empire. Ginn heads his numerous enterprises through a number of privately held companies supported by private investors.

However, events last week suggest that Ginn's racing business is on the brink of collapse. He has suspended his NASCAR Busch Series operations. He has no new primary sponsors of any significance other than the United States Army sponsorship of his No. 01 team, a source of revenue that had come with the purchase of MB2 Motorsports. Both Marlin and Nemechek have been told they are free to seek employment elsewhere. Joe Nemechek's No. 13 team that had been carrying Ginn Resort sponsorship is not scheduled to compete at Indianapolis, barring the arrival of an unexpected new sponsor. Marlin's No. 14 seat is to be filled by rookie Regan Smith, a developmental driver that had been sharing seat time with Mark Martin. And it is being widely reported that Ginn and Dale Earnhardt, Incorporated are in talks aimed at DEI absorbing some or all of the race teams. Others are speculating that the teams will be sold off piecemeal to more than one existing team owner. Editor’s Note: This merger was completed late Wednesday morning.

It seems that Bobby Ginn's time in the NASCAR spotlight is coming to an end. He gave an award winning performance as a man with the wherewithal to compete on a grand scale with the sport’s best owners, and he played the part to the hilt. Two months ago, he even made a bold public pronouncement that he would try to entice Dale Earnhardt, Jr. to sign with his team. Still keeping up a pretense of having a healthy organization, one that sponsors should be interested in, he tried to snag the hottest and presumably most expensive stock car driver of all time.

“We would stretch as hard as we could stretch to do it,” Ginn proclaimed after Earnhardt, Jr. announced that he would be leaving DEI at the end of the 2007 race season. “You want the best, the absolute best, and I love the idea that Dale wants to win championships. He could accomplish that here with us.

“We’re in play. “

"We have a five-year plan in mind and the conclusion is winning a championship,” Ginn said at the same time. “We took a risk on Mark Martin, and that’s paid off in spades for us. We aren’t afraid to be aggressive.”

Listening to what Dale has outlined, his Busch operation would dovetail beautifully with us,” Ginn said. “We believe he’d be a good fit. Our DNA’s match, our cultures are alike.”

Well, things were not as solid as Bobby Ginn wanted them to appear. Certainly Ginn knew that something had to happen…and happen fast before his gamble backfired. Possibly the recruitment of Dale Earnhardt, Jr. would have landed sponsorship deals that would have allowed the organization to recoup its large outlay of cash over the last year and enable the race teams to prosper. But certainly by the time Ginn started his campaign to sign Junior, he knew that his plans were unraveling for lack of money. By that time, the only thing "in play" was desperation on the part of Bobby Ginn.

Expect more news to come forth on the rise and fall of Ginn Racing. It is my belief that there is still more to this story than is clear at this point. But it is unlikely that the organization can now survive. Fortune 500 sponsors, seeing what has transpired, will not now come to Bobby Ginn's rescue. It appears that Bobby Ginn is a man that isn't afraid to take risks. Sometimes he wins big…but this time he lost big.

NASCAR NEWS, RIGHT TO YOUR INBOXAND IT’S FREE.
The Frontstretch Newsletter, back in 2014 gives you more of the daily news, commentary, and racing features from your favorite writers you know and love. Don’t waste another minute – click here to sign up now. We’re here to make sure you stay informed … so make sure you jump on for the ride!

Today on the Frontstretch:
ATHLON SPORTSBOWLES: Is Kevin Harvick A Hall Of Famer?
Racing to the Point: I’ve Got the Green-White-Checkered Blues
Beyond The Cockpit: Ron Capps Could Have NASCAR Stars Trying… Drag Racing?
IndyCar Driver Profile: Sebastien Bourdais
Who’s Hot / Who’s Not in Sprint Cup: Darlington – Off Week Edition
Couch Potato Tuesday: Moving NASCAR Coverage Onto the Web
Voices From The Cheap Seats: NOTeworthy News
FREE NEWSLETTER! CLICK HERE TO SIGN UP

 

©2000 - 2008 Tommy Thompson and Frontstetch.com. Thanks for visiting the Frontstretch!

Kasey
07/25/2007 05:44 AM
permalink

Good read

Thanks

Robert Eastman
07/25/2007 09:15 AM
permalink

Hats off to Bobby Ginn! It’s guys like him, who make America Great! Entreprenurial Dreamers with an “I Can” attitude, shake things up and make things happen, quite often for the better.
The question we have to ask; “Is NASCAR Cup racing better off (or worse) because Bobby Ginn showed up?”
As much as I feel for Sterling and Joe, is running around the track at the back in uncompetitive equipment (MB2) good for racing? Is “playing it safe” as a field filler what racing really needs and fans want? I don’t think so!
The synergy of the Ginn-DEI merger is bound to strengthen DEI and make it truly a “top tier contender,” able to consistantly challenge HMS, JGR, RCR, and RFR.
Bobby Ginn’s only mistake (more of a miscalculation) was, “How fast will they come (the sponsors), if I build it?” Obviously, as a smart businessman who learned from his past mistakes, he had a plan B, which is now being implemented.
Bobby Ginn, thanks for coming into our sport and giving us a 6 month “meteor light show” and now, an even better DEI.
I can’t wait to see Mark Martin in a DEI car!

McQuiston
07/25/2007 09:51 AM
permalink

Matt,

Obviously you have researched Bobby Ginn meticulously.

This is not the guy I would trust with my money or my dog in a Motel 6.

It’ll be a while before we hear some of these details in other popular media and websites.

I’m betting the folks at DEI were smart enough not to get taken to the cleaners by this fast mover.

Thanks for and excellent and enlightening piece.

jazracing
07/25/2007 03:47 PM
permalink

Ginn is far smarter than you seem to credit him for. He improved and eventually sold a 2nd tier team. Made them attractive to sponsors and in the end, to a buyer. He now has a piece of DEI. Martin did very well, Front row Joe and Sterling had their careers extended. If funding would have landed, I am sure things might not be that different in the driver line up anyway.
So, Ginn didnt roll snake eyes, and speculation of the numbers is simply foolish unless you were there and were presented the numbers. Ginn should be credited with a major league save.

Doug K
07/25/2007 07:20 PM
permalink

I think what would have been better for Ginn Racing is if Mark Martin had continued racing every event, considering he was the points leader, instead of missing races here and there. I know it was Mark’s plans to run a partial schedule. But I’m sure Mark also wasn’t expecting to be first place in points either at the time he stepped out of the car. But I think that if Mark Martin would have stayed in the car and continued to lead the points or even stay in the top-5 or top-10, it might have made it easier for Ginn Racing to attract and gain sponsors. Most people probably won’t agree with me, but I think as soon as Mark Martin got out of the car, you could easily see Ginn Racing’s future slide right down along with the point slide Martin took. I mean, what better way to advertise to potential sponsors that you are a team worth sponsoring by having your car in the top-5 or top-10. All the car owners that have a car in the top-10 are car owners that are well funded with sponsors — I seriously doubt if Ginn Racing had a car in the top-10 that Ginn Racing would be the exception to that (at least not for long) — they would have gotten more sponsors.

Robby
07/25/2007 08:09 PM
permalink

Nice piece.

Ginn, however is no slouch when it comes to business, and business is like anything else…you learn it mostly through trial and error. No one should look down on Ginn, the man did something many of us only dream of, and he almost pulled it off. Hats off to him.

No doubt its gonna be great to see Martin in a DEI car, and teamate to Jr!

Contact Tommy Thompson