Remember how so many, like Stewart, underestimated Miss Teresa’s business acumen just a few short months ago – believing DEI would wither up and die without the presence of their superstar? In fact, this journalist vividly recalls widespread disagreement stemming from several fans about my position that the much maligned stepmother should hold to her stance and not give in to Junior’s strong-arm tactics to take over the company, jumpstarting a whirlwind of differing opinions in a piece I authored in April titled, “For Dale Earnhardt Jr., Might Doesn’t Make Him Right.” Likewise, I remember the lukewarm response that I received in my later defense of Teresa’s on-the-job performance as a major NASCAR team owner in a commentary last month, “Junior Sets The Record Straight, Meaning Vindication For Teresa.”
No doubt, this commentary will receive equal condemnation from those that truly want to portray Teresa Earnhardt as a kind of wicked stepmother character that has, through her penny-pinching and inept business practices, prevented her stepson from attaining what some believe is his preordained destiny… NASCAR Nextel Cup Series champion. However, as the past weeks and months have unfolded, the truth continues to shine through above the chatter. The facts speak for themselves; no matter what you think of her business practices, Teresa Earnhardt is one smart cookie!
The acquisition of Ginn Racing last week – resulting in a multi-million dollar expansion for DEI – has Teresa still at the helm and writing the checks, in the process elevating her already solid top-10 organization to a whole other level. Simply put, the move solidifies the company for the future and beats other respected team owners to the punch in becoming a four-team operation. That is no insignificant accomplishment – one the likes of Joe Gibbs and Richard Childress, among other illustrious team owners, know is necessary for their future survival. Just the third team to officially field four or more cars, only the Hendrick and Roush stables can claim the type of expanded fleet that now lives at DEI.
But the Teresa Earnhardt critics don’t see it that way. Even those that begrudgingly acknowledge the widow of NASCAR legend Dale Earnhardt has made some positive moves of late often attempt to credit Earnhardt Jr.’s defection from the family business as the reason for both the recent success of the race teams as well as their latest business coups. To do so, those detractors have to play fast and loose with the timeline of events that has propelled DEI to the enviable position it is now enjoying. Regardless of how many times Junior repeats his assessment of DEI, “I was surprised at how on par in some places DEI really is,” or “I never really felt like me and crew chief Tony [Eury] Jr. had any trouble being competitive at DEI,” – Teresa-bashing loyalists refuse to be deterred.
While the Ginn coup was swift and sudden, the acquisition itself did not signal some post-Junior realization by the organization that they needed to look at expanding. The truth is, DEI had been in acquisition negotiations with this same organization last year – well before Little E’s announced decision that he was moving to Hendrick Motorsports. Though negotiations with then-owner Nelson Bowers and minority owner and manager Jay Frye did not result in a deal that made business sense to DEI, resulting in Bobby “money bags” Ginn purchasing MB2, the effort on Teresa Earnhardt’s part to expand her company cannot be ignored.
Is it just dumb luck on Teresa Earnhardt’s part that she has now ended up with a race team that she could not swing a deal on just a little more than a year ago? Nope, just smart business. Though MB2 saw the writing on the wall and knew that it was important for them to align the company with another for future survival, they were still in a position to bargain for top dollar, one year later, Bobby Ginn was not. He was on the verge of going “belly up” and was able to be bought out at a “fire-sale” price by an organization in DEI that could easily afford to cover his losses. As an added bonus, Ginn’s spending spree on the deal made the assets purchased much improved; there were so many other enhancements that he had unwisely invested in to improve the teams during his one-year tenure as a mover and shaker among Nextel Cup team owners that it was a no-brainer to merge as those were included in the deal (see last week’s column for more info).
Being able to recognize what is and is not a bargain is the sign of a good business manager. Though waiting to expand DEI may have seemed to some as a sign of non-commitment by Teresa as to the future of her racing division, it is now evident that it was a prudent decision on her part. But, good deal or not, the money still has to be available to capitalize on an opportunity when it presents itself – and Teresa was able to deliver the cash when needed because she has year-in and year-out operated her company both responsibly and profitably. In fact, Forbes magazine recently ranked DEI sixth in profit among all NASCAR organizations for 2007, a jump of two positions from their spot in 2006. The $16.6 million in estimated profit she accumulated puts her in a rather exclusive group of owners, numbering just 10, that realize any significant monetary returns from team ownership.
Convinced yet? Not everyone will be… there are always “yeah, buts,” from those that refuse to acknowledge that because Teresa Earnhardt chooses not to conduct her business through media blurbs, that indicates that she has not been active in addressing DEI’s business needs. Her critics also like to point out that she has been too “tight-fisted” with the company checkbook to expand shop space, something her media darling stepson has pointed out is busting at the seams. But the fact is, DEI has been shopping for additional shop space; just last year, they were in serious discussions with Robert Yates Racing to purchase their shop when the business outlook for RYR looked bleak. However, at the time, negotiations were in play between Yates and Red Bull (a Toyota team) for Yates’s No. 88, and DEI technical director Steve Hmiel made their interests crystal clear: “We don’t care anything about the number. We won’t buy just for the number. We never even considered buying just the number. The focus is on the facility.” Because of that, the deal fell through.
The list of unsupported indictments against Teresa Earnhardt goes on. Even great moments get shrouded in a sea of questioning; Martin Truex Jr.‘s win at Dover last month is led to insinuations that Teresa was finally listening to her disgruntled stepson even though it was too late, resulting in retracting complaints that she was not doing enough to make the race teams competitive. I suppose those mouthing such nonsense believe that the inadequate attention to the race teams, including the three-year development of DEI’s Car of Tomorrow program, was miraculously addressed and turned around in mere weeks, and then, only after Junior’s announcement prompted action. In reality, such a situation would be bordering on the impossible… but people still believe.
Then, of course, there was the celebrated merger of the engine programs at DEI and RCR which was announced in May of this year. Ah, ha! See, that would have never happened if Junior had not left, say those faithful to the premise that Junior, though leaving, is responsible for what few deny was a smart business move by both team owners. Said Junior: “I think that’s a great move. I was telling Richie [Richie Gilmore: DEI Director of Competition] this time a year ago that all the Chevy teams ought to consolidate to one engine program. Depending on the teams you brought in, it would cut the cost tremendously. I think it’s an awesome idea because the sport’s getting so damn costly now. As far as performance-wise, both [programs] got a little to offer each other.”
But again, the timeline would suggest that Teresa was hot on the engine merger well before the February pronouncement by Junior that he wanted controlling interest of the race teams. Said DEI General Manager, John Story, “Richard and Teresa [Earnhardt] have been working on this project for the last six months.”
Such proclamations don’t matter, though, to those dead set on condemning Teresa Earnhardt’s management of the company she has run on a day-to-day basis since its inception. Earnhardt Jr. has not won a championship in the equipment she has provided, and that is all they need to know.
The predicted demise of DEI and Teresa Earnhardt as a team owner after the departure of Dale Earnhardt Jr. are simply wrong. With Teresa Earnhardt quietly making wise business decisions, it is now becoming apparent to all that the company has never been better positioned – and that racing at DEI will go on long after the departure of its immensely popular driver next season.