Since the dawn of professional baseball in America, the owners of the national pastime have dabbled in sports outside the diamond-shaped variety. From George Steinbrenner and the Angelos family having an interest in the horse racing world (Steinbrenner owns thoroughbreds while the Angelos family has a controlling interest in a Maryland racetrack), to the Ilitch family, Jerry Reinsdorf, and Lewis Wolff how own multiple Big-4 franchises (for Ilitch it’s the Tigers and NHL Red Wings, while Reinsdorf owns the White Sox and the NBA Chicago Bulls, and Wolff owns the Athletics and MLS Earthquakes), MLB owners have found ways to spend their wealth gained through MLB in other sports worlds.
Recently, however, owners have started to dabble in a sport that has seen increased growth in their fan base that also doubles as an advertising tool to promote their club brand.
Yes, there is a growing love affair with the high-octane world of auto racing.
From the Red Sox, to the Diamondbacks, to the Dodgers, professional racing of the 4-wheeled variety has become a platform to increase brand awareness, and in the case of the Red Sox, a serious investment that also allows for sheltering from MLB’s revenue-sharing system.
For the Arizona Diamondbacks, the interest in auto racing has been an organic affair. Former player agent turned CEO Jeff Moorad, along with D-Backs COO Tom Garfinkel and Panda Express CEO Tom Davin purchased the controlling interest of Hall of Fame Racing in August of 2007 from Roger Staubach and Troy Aikman, who remain as minority partners. The deal was easily brokered as Moorad was Aikman’s former player agent, and Garfinkel was the former executive vice president for Chip Ganassi Racing.
As Moorad said in an interview with the Biz of Baseball., “As we sat around in the office often at the end of the day, talking about our respective visions in sports, we found ourselves often focused on NASCAR and some of the common experiences we’ve had. As time went on, I suggested the possibility of buying a team,“ Moorad said. “Tom offered to open a number of doors for myself and Tom Davin, who is the CEO of Panda Express Restaurants. Tom Davin, and I met with several owners who had some interests in selling their businesses in the sport. At the end of the day, although we looked at a number of the larger teams, we felt that the more conservative approach was perhaps the most appealing. I asked Tom Garfinkel to play a role in the acquisition in Hall-of-Fame Racing. At this point, the other three managers of the LLC that controls Hall-of-Fame, Tom Davin, Tom Garfinkel and myself.”
While Moorad and Garfinkel continue to work in a dual-role capacity between the Diamondbacks and Hall-of-Fame Racing, currently the paint scheme does not have the Diamondbacks as the primary sponsor. Still, there could be a chance the see the D-shaped snake one day on the hood.
“There may be opportunities,” Moorad said.
While racing for the Red Sox and Diamondbacks is mostly of the left-turn variety in NASCAR, for the Los Angeles Dodgers, it’s been no turns, as all, opting to leverage NHRA drag racing seeing it as an opportunity to promote the 50th anniversary of the club’s migration from Brooklyn to Los Angeles.
Competing in the Funny Car finals at the 44th Annual Automobile Club of Southern California NHRA Finals at the Auto Club Raceway at the Pomona Fairplex on Sunday was Robert Hight , who drives the John Force Racing Auto Club-LA Dodgers 50th Anniversary Ford Mustang. Hight, who is currently in third place in the Funny Car championship standings, threw out the ceremonial first pitch at Dodger Stadium earlier this summer.
To add to the Dodgers promotional feel for the NHRA Finals, Hall of Fame Manager and Special Advisor to the Chairman of the Dodgers, Tommy Lasorda was the Grand Marshal.
“I am very excited to be the Grand Marshal,” said Lasorda before the Finals. “These races are very exhilarating and I am looking forward to watching those cars race, and I am really pulling for the Dodger car to win.”
The Dodgers and the Auto Club have been partners for more than 10 years, and have enjoyed numerous cross promotions over the years aimed at serving the public in Southern California.
So, while baseball is in its off-season, the Dodger blue colors and brand will be plastered across a bullet of a billboard in Hight’s Funny Car being seen by millions on Sunday via ESPN2 and ESPN360.com.
But, baseball’s most notable ownership foray into auto racing involves the Boston Red Sox and Fenway Sports Group (FSG). Red Sox owners John Henry, along with Tom Werner and Larry Lucchino, started FSG in 2004 through New England Sports Ventures (NESV) as a vehicle to grow revenues outside of the Red Sox -- revenues that fall outside of MLB's revenue sharing system.
FSG has acquired properties ranging from a Class-A Carolina League ballclub, to 80 percent of New England Sports Network (NESN), and works as a marketing and consulting firm for the likes of the Boston Red Sox, Major League Baseball Advanced Media, the PGA TOUR's Deutsche Bank Championship, Verizon Wireless, AARP, Ritz-Carlton Club and Boston College Athletics.
But in Feburary of 2007, it was FSG's purchase of 50 percent of Roush Racing, one of NASCAR's largest and most successful teams, to form Roush Fenway Racing (RFR) that showed just how serious an investment an MLB team could make in the autoracing world. With the 50 percent stake in RFR, the Red Sox, through FSG, fields five cars in the Sprint Cup Series and had three drivers, Carl Edwards (2nd), Greg Biffle (3rd) and Matt Kenseth (8th) in the Chase for the Cup and four drivers in the top 13 in Cup standings with David Ragan in 13th place. This merger marked the first time that owners of a professional franchise in one of the four major leagues have partnered with a NASCAR team.
Not content with just the merger with Roush through RFR, FSG also provides marketing and sponsorship services to Yates Racing.
Recently, FSG brought on Brian Corcoran as Executive Vice President, Business Development & Motorsports. Prior to FDG, Corcoran was the Managing Director, Corporate Marketing for NASCAR.
Is the Investment in Auto Racing a Trend or a Passion?
The question becomes, is auto racing endeavors by MLB owners simply a passion or a serious investment? The answer is certainly both. While the Dodgers' foray into an NHRA team may only last through the end of the season as a sponsor, clearly the members of the Diamondbacks and Red Sox are taking the matter seriously by putting their money on the line, and investing in the ownership of racing teams.
Clearly, FSG is showing that investments outside of baseball can be both lucrative and functional from a baseball prospective. RFR falls outside of MLB's revenue-sharing system. As John Henry said when the merger of between FFG and Roush Racing occured, when you have maximized your brand in your home ballpark, looking outside the box becomes a worthy endeavor.
"We reached a point in baseball where there's only so much we can do," Henry said. "Fenway Park is small. We've sold out every sign."
And, while the downturn in the economy has hit all forms of professional sports, including racing leagues such as NASCAR, the fans of motorsports are exceptionally loyal. That's something that will most likely draw other MLB owners in at various levels as they find new ways of sheltering revenues while basking in the intense atmosphere of auto racing.
Still, even NASCAR isn't impervious to the economic woes, as there are reports that layoffs are bound to hit NASCAR in the off-season, and Jack Roush has called for a total ban on testing in 2009. The question becomes, are other forms of sports investment any more or less sound than motorsports in an economy that has continued to decline? For the Red Sox, and other large revenue makers in MLB, outside investments will be a consideration, but when and whether it is of the four-wheeled variety will be the focus over the next 12-24 months.