fbpx

Their Nothing to Lose Strategy Helped Spire Motorsports Win at Daytona, But the Company’s Huge Bet on NASCAR Means They Have Plenty to Lose

Their Nothing to Lose Strategy Helped Spire Motorsports Win at Daytona, But the Company’s Huge Bet on NASCAR Means They Have Plenty to Lose

On Sunday, July 7th, the improbable happened: Justin Haley, driving the #77 Spire Motorsports car, won NASCAR's Coke Zero Sugar 400 at Day

The Pros and Cons of Starting Up in Your 20s, According to 2 Millennial Founders
Thinking of Starting Your Own Business? Working for a Big Company Might Teach You a Lot
An Interview with Amir Shevat, ex- Microsoft, Google, Slack, and Twitch

On Sunday, July 7th, the improbable happened: Justin Haley, driving the #77 Spire Motorsports car, won NASCAR’s Coke Zero Sugar 400 at Daytona.

Maybe improbable isn’t the right word. Unthinkable might be better.

This time last year Spire Motorsports was a highly successful agency and management firm: Representing, advising, and consulting with drivers, sponsors, teams… in many ways, Spire serves as an off-track engine for the sport.

Until they leveraged everything they own to buy the charter from Furniture Row Racing for a reported $6 million, the highest amount ever paid, and started a race team that, because resources are so scarce, resides in another team’s shop. (Think of a charter as a cab company medallion; teams purchase charters and in return are guaranteed starting spots in races as well as higher purse payouts — and creates an asset a team can later sell.)

Underdogs? Absolutely. Yet a combination of strategy, weather, and luck took them to Victory Lane at Daytona.

But that’s not the real story of Spire Motorsports and its parent company, Spire Sports + Entertainment. To find out more I talked with co-founder Jeff Dickerson about the business of racing — and why he and his partner T.J. Puchyr basically decided to bet their company on NASCAR.

One of the things that surprises people about racing is how there can seemingly be so many conflicts of interest. But when you look deeper, it’s actually combinations of interest.

That’s a good way to put it. We’re a driver agency, we work with sponsors, we work with teams…

No one within the sport sees our owning a race team as a conflict of interest. Before we bought the Furniture Row charter we were engaged in trying to find someone to buy it. We would have made money had we found a buyer. (Laughs.)

A number of teams use Hendrick (Hendrick Motorsports) engines. Several teams have alliances with competitors. That’s how the sport works. 

Were you basically bidding against yourself?

I hope not. (Laughs.) We bought Furniture Row’s charter because it was one of the most valuable charters. (The payout formula is somewhat complicated, but one component of a team’s earnings is based on performance over the previous three year’s results.) 

But because of that, and especially since we don’t have the resources to be a top-five team, the charter’s value will diminish over time. 

So we better get going. (Laughs.)

You are also handicapped by the fact you basically started a new team in just a couple of months.

Getting it done so late in the game… we knew there would be some pain involved this year. No one likes to know they’re probably going to go a number of laps down.

But we’ve stuck to a basic plan. One, build a team the right way, not be fly-by-night. Two, give opportunities to younger drivers, especially those who don’t bring a lot of sponsor money with them… we figured if we’re going to have to run at the back for a while, we should do a little good for some of the people in the sport who deserve a little help. 

And three, figure out how we will make a leap forward in the second half of year one, then in year two… to slowly build a truly competitive team.

Which is where combinations of interests come in, especially where your role in working with sponsors is concerned.

From an agency perspective, we’re still driving money to some of the top teams in the sport. They’re premium properties that command significant sums of money.

With the 77 team, while we’re building our team it serves as an incubator for sponsors new to the sport. We can show them what NASCAR is all about, show them the return they can get on their investment… and if they’re ready to really ramp it up and be on a car that runs up front, we’ll take them down the street.

As opposed to the cannibalism that sometimes goes on in the garage area, we gladly walk our sponsors to an opportunity that is better than our opportunity.

After all, we can grow our team and be on plan for less money than what is required down the street.

And in the meantime, show other sponsors what we’re capable of delivering.

Speaking of capabilities, you’ve clearly targeted some races as having greater odds of finishing well than others.

You’re right. We have to pick and choose, and so far that has the plate races. (Restrictor plate races, like Daytona, are less predictable because drafting has a huge impact, as do multi-car crashes that often take some of the best cars out of contention.)

Talladega was one of those, and we were running in the top ten at the end of both stages. 

But we get it. Few people are dying to push the 77 in a plate race. (Laughs.)

All of which leads to consistently being an underdog. I’m guessing that’s a comfortable place for you to be.

It’s built into our culture. We made our mark in the sport by selling drivers few people had heard of and getting them hired by race teams.

Now they’re not unddogs, but they were when we brought them into the sport. 

That’s our DNA. We’re constantly having to convince people. That a driver is good enough. That a sponsor should come into the sport. That the 77 will eventually make a performance leap. 

Every single person that works for us has something to prove. With the 77, we were underdogs last week, we’re underdogs this week, we’ll be underdogs for the next couple of years.

Here’s the thing: If you’re working in the Cup garage, you’re talented. Everyone is talented. What separates people, from drivers to engineers to mechancis to whomever, is ambition and drive. 

Our race team, and larger organization? We’re loaded with ambition and drive. We all have something to prove.

Which had to make winning at Daytona a little surreal. How did it feel when people said you just got lucky.

That didn’t bother us at all. Luck was definitely involved.

I even tried to apologize to Chip Ganassi for winning. (Race leader Kurt Busch, driving the #1 car for Chip Ganassi Racing, pitted just before lightning struck near the track, prompting other cars to pit with him; Justin Haley stayed out and inherited the lead and the race was eventually halted due to weather.)

[embedded content]

Chip said, ‘Never apologize. For anything. It was a race. Everyone had the same chance to win. And you guys did it.’

So I’m not upset about anything that anyone has said, because we did get lucky. We had to be in the lead draft. We picked up 20-odd spots after the big wreck. We needed cars ahead of us to pit. We needed lighting, then the rain to keep falling… we’re self-aware enough to know without people telling us that we were lucky. (Laughs.)

But it also didn’t happen totally by accident. We had a strategy and we followed it. All those things had to happen for it to work… but we definitely had a strategy. 

Has winning at Daytona impacted your business? 

The win was awesome, but it hasn’t changed the trajectory of the company.

While we got a lot of short-term attention, our group is known for taking the 100 little steps required to create and finalize a deal.  Our race strategy turned out to be lucky, but when we bring sponsors into the sport, we don’t luck into it. We work at it.

The real message is that we believe in the sport. We believe in the model, we believe in the NASCAR organization, we believe in the Gen 7 car… we believe in where the sport is going. NASCAR is still the best sponsor play in professional sports.

Thats why we bought the Charter. We’ve always sat across from potential sponsors and told them we believe in the sport.

Now we don’t just say we believe. We can also show that we’ve leveraged everything we own against that belief. 

That’s a pretty compelling argument.

Spire Sports + Entertainment has a variety of interests. Has the race team made it harder to focus on all your other ventures?

You’re right. We own half of the Rapid City Rush of the East Coast Hockey League. We own 50 percent of Track Enterprises. But once you get past race cars or hockey pucks, it’s all the same: Growing a fan base, growing a sponsor base, treating everyone right, providing great hospitality, building a team and a culture…

It also helps that T.J. is my partner. What he does on a daily basis, what he is able to juggle… he makes me look smarter just by association. (Laughs.) And we have so many great people: Joey Dennewitz runs the race team, Todd Mackin runs the hockey team, Bob Sargent runs Track Enterprises… which lets the Charlotte office focus on making everything go from a resources point of view. 

The day after Daytona everyone came back to the office and got back to work.

The calendar doesn’t stop just because you won.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

Do You Enjoy This Article?
Sign up for our newsletter and receive FREE access to download SuccessDigest Digital Weekly Edition for attainment of your financial freedom in the new digital economy!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.

COMMENTS

WORDPRESS: 0
DISQUS: 0
%d bloggers like this: