Rocky Redeux? What's Robby Gordon up to now: An IPO?

  When it comes to Daytona and Talladega, always keep an eye on Robby Gordon (Photo: Getty Images for NASCAR)
  

   By Mike Mulhern
   mikemulhern.net

   Do you want to follow an old school racer -- who marches to his own inner drummer, who isn't afraid to tweak noses, who doesn't always play well with others, who likes to get a little crazy every now and then?
   Well, take a new look at Robby Gordon.
   His latest move – planning for an IPO, which he says is the next move "obviously."
   Paging Jim Cramer.
   Buying stock in Robby Gordon Inc.?
   Hmmmm.
  
   Most of these other drivers sometimes talk like they should be racing in three-piece suits.
   Gordon's idea of dressing up is finding a clean, new driving suit.
   And his passport looks like a battleground of its own.
   Yes, it's been how long now since this Gordon won a Cup race? Okay, 2003, back when he was driving for Richard Childress.
   But Gordon insists he's still undaunted about pitting his very small team against the giants of this sport.

   And at Daytona and Talladega Gordon is usually at his best.
   This type of gutsy, daring racing suits him just perfectly.
   Remember how Gordon and Trevor Bayne hooked up here a year ago?
   Remember how Gordon and Bayne again hooked up so well at Talladega last fall?
   Little wonder that Gordon feels he's got as good a chance as anyone here to win this Daytona 500?
   And it didn't go unnoticed how quickly Gordon here was to shake Bayne's hand, during Thursday's mad scene.
   "Last year here we ran with Trevor all day long, ran in the lead pack," Gordon says. "And the last lap we were running third when I got knocked sideways, had a huge save over on the backstraight, and wound up finishing 16th.
   "We came here to win.
   "Last fall at Talladega we led the race for a long time with Trevor. Our two cars work well together. I consider Trevor a friend. And when he lost the draft at Talladega, I went back and got him; that's part of being a good teammate. We've got that relationship.
  
  

   Now that's teamwork: Robby Gordon getting a good push from Trevor Bayne (Photo: Getty Images for NASCAR)
  

   "I don't know how things are going to play out this time, with the changes in the front bumpers, because I wasn't here for testing last month, I was in the Dakar. And I don't know what NASCAR will or won't allow us to do (as far as the two-car drafting).
   "But this two-car drafting has been around forever; we just weren't smart enough drivers five years ago to realize that if we just touched the brakes a little we could keep hooked together. Now we know to do a light lift going into turn one and a light lift coming off turn two, and we can stay connected."
   So Gordon says the two-car draft "is not going to go away."
   NASCAR has tweak the rules several times to try to eliminate the two-car draft. But Gordon worries those changes will only make the situation more dangerous.
   "That's just going to change the splits, and make 'the big one' even more (likely). The closing rate (by a two-car tandem approaching two rivals making a 'swap') is just so great….
   "Race teams are smart; when we see a new rule, we'll chew it apart until we make it better.
   "It's going to be interesting. It's going to be a crazy race."

   Perhaps it might seem strange that whenever Gordon plays at Daytona and Talladega, his persona changes just a bit.
   And here during Thursday's annual Media Day madness Gordon was on the straight and narrow. Well, pretty much.  
   "This sport is great; I love this sport. I love NASCAR," Gordon says.
    "I made the decision 10 years ago to leave Indy-cars and come to NASCAR, because this sport is what America is all about. And it has the eyeballs and the people.
   "It's just the economy has us all in a jam."

    Gordon's sports business is quite different than others in NASCAR, not
only because he's the driver too but because he owns one of his major
sponsors, the Speed energy drink. He branched into the energy drink
business after racing with sponsorships from Red Bull and Monster and
seeing the profit margin in those drinks. Red Bull he says is a $6
billion a year operation; Monster, $3 billion a year.
   (However Pepsi's Amp didn't fare that well apparently, with Dale Earnhardt Jr. switching to Mountain Dew this season.)
  
Gordon hopes he can use his racing talents to build Speed into a
significant brand. "NASCAR fans are consumers," Gordon says. "They may
drink Red Bull or Monster now, but we want to convert them to Speed."
   Still, Gordon is blunt about the NASCAR part of his business these day – he says he doesn't make any money doing this: "We haven't made any money in NASCAR in a long time."
   But with NASCAR's national visibility, it's good marketing.
  
  

    A Robby Gordon IPO? Better check with the Mad Money man himself, CNBC's Jim Cramer (Photo: Getty Images for NASCAR)
  

   No profit in NASCAR racing? Then why keep doing it. Gordon smiles: "Ever hear 'stuck?'
   "Be careful what you wish for.
   "I've got a 100,000-square foot building in Charlotte…and planes I can't even afford to use today, though I'm still making payments on them and still paying insurance on them.
   "I'm stuck. Plain and simple.
   "The race team's for sale. It's been for sale."
   In a sense, yes.
   So, really, what is the next phase of this business for Gordon?
   "The smartest thing for us to do, and what I would like to, would be to bring in investors who could handle sponsorship relations.
    "Before we went public (selling stock), I would be up for private investment first.
   "And then, obviously, we will take it public.
    "Obviously I can drive it, and we can run it. But I'm running Speed too, and we need people who have more relations than I have.
   "We do have a huge fan following; I've met a lot of people over the years. And virally (on the internet) I don't think any other NASCAR driver gets the views we get, on a daily basis. You could put Danica and Dale Jr. together and they wouldn't get as many. That's because we do a lot of other things besides NASCAR."
  
  

   Danica Patrick, facing Thursday's media scrum during Media Day madness at Daytona (Photo: Getty Images for NASCAR)
  

   Now if Gordon wanted to grip about things here, he could start with the top-35 rule and all the shenanigans NASCAR allows. Danica Patrick, who has never raced a lick on the Cup tour, has finagled a guaranteed spot in the Daytona 500….while Gordon, who ran his first Cup race back in 1991 and who has nearly 400 Cup starts under his belt and who finished 34th in driver points last season, isn't guaranteed anything here, except a chance to run fast enough to try to make it on speed, or with a good finish in the 150s.
   But, no, Gordon isn't taking the bait.
   "We could talk about the top-35 rule, and I could whine and complain about it…but to be honest, if we're not good enough to get in the 500, what are we racing for anyway?" Gordon says.
   "I came here to win the Daytona 500. I didn't come here for last place money.
   "I don't think we'll be rocket-fast in qualifying here, but when it comes time to race we'll be okay. But we've got to race our way in. And I've missed the race before trying to race my way in; we finished fifth in the 150 a few years ago but still had to go home. That's frustrating. But I'm not going to complain about it.
   "We wouldn't be outside the top-35 if we hadn't parked the car a few times last year. But we just couldn't afford to run the car. There is a catch that comes with this thing.
   "If we could run the car, we're a top-25 team easily. But we can't afford to run the car."
   Like many in this sport, Gordon's sponsorship situation has been iffy lately.
   How much does it cost to run a Sprint Cup car full-time this season anyway?
   Gordon says, not including a driver's salary, he could run all 36 Cup events in 2012 for $8 million.
   Only $8 million? That sounds like a bargain basement deal, considering some rivals are budgeting $20 million or more a team.
   "But some of these drivers contracts are $3 million to $5 million a year, and I couldn't afford to pay a driver that," Gordon says.
   The bills to consider:
   "You have to look at an engine program costing $2.5 million to $3.5 million," Gordon says.
   "Tires are $1 million a season; some other teams, though, are spending $1.5 million a car on tires, because every time the caution comes out they put on new tires.
   "You'd need about eight cars; the cars (with NASCAR's common template designs) are very versatile. And even though I have some road course specific cars, we can get by with eight cars.
   "And our facility can do things other teams can't; we have tools other teams don't. We build everything in our shop.
   "So I have something a little from everybody else – I have a driver built into the season, and I have a multi-million-dollar or multi-billion-dollar business built into the model, with Speed."
   His Charlotte operation expanded into engine building last season. He ran Dodge engines leased from Roger Penske for about half the races. "But we started developing our own, because we had to start controlling our own destiny," Gordon says. The engine program is headed by Joey Arrington.
  
   Gordon comes here after yet another off-road race, last weekend, this time somewhere out in the high desert of the Sierra Nevada about 80 miles east of California's Auto Club Speedway. "Ever heard of King of the Hammers? It's over rocks. Qualified fifth….blew an engine. It was fun. Basically in jeeps, highly modified."
   Since Homestead, Fla., last November, the final Sprint Cup race of the season, Gordon has not been idling.
   "I think the Daytona 500, or rather next week's 150, will be my 17th race of 2012….now that's including every day of the Dakar as a race, because they are, about 500 miles a day.
   "I love the Dakar. We had a lot of fun. Our cars were very fast, not only mine but the one we did for Al-Attiyah.
   "We won 105 of the 160 possible waypoints. We won half the races of the Dakar, very strong. The only thing that cost us the win was a hose clamp that came off the CV boot; the hub was 350 degrees, so it took us 30 minutes to cool it enough to work on it."

   The freedom of the desert and desert racing, with virtually no limits…that's Robby Gordon's world, whether it's the Baja or the Southwest or South America.
   And sometimes he seems out of place here in NASCAR, in this bubble world, because he cuts against the grain.

   But Gordon is business savvy enough to know how to play the games. Well, most of the time.
   "In America – and I'm fortunate enough to race in world-wide events – the Daytona 500 is the Dakar. This is the race that shows up on the radar screen. Maybe 15 years ago it was the Indy 500, but now in American motorsports it's all about the Daytona 500."
   Winning the Daytona 500 would open some doors he hopes. "We're dreamers, and this is what we love to do," Gordon says.
   And after Daytona?
   "I'm going to do as much racing as I possibly can, because I love to race," Gordon says.
   "So I'm working hard growing my Speed brand. We're in about 12,000 stories in America. We're in about 7,000 stores in Mexico. We're real close in South America in distribution, and trademark approval and registration; it's about a nine-month process. In Canada we're seven months through a nine-month process.
   "Our goal is to grow the brand. Speed is a lifestyle; only a few of us get to race, but a lot of us enjoy the lifestyle."
   However this sport's long-running exclusivity rules for sponsors has created some major roadblocks for Gordon: 'sampling' at each track during race weekend, a vital part of any sponsorship, has been limited, he says. But Gordon and the France family's tracks have come to terms. "It's the other side that's crazy, the most difficult," Gordon says, referring to the Bruton Smith tracks.
   So how much Sprint Cup racing will Gordon do this year? He ran 25 of last year's 36 events, a 16th in Daytona and 18th at Sonoma his best finishes, and he DNFd 14 times.
   "How much racing? As much as I can do without going broke," Gordon says.
   "I promise you I won't go broke doing this."
  
 
  

    Coming soon: Shares of stock in Robby Gordon? Better wake up Merrill Lynch (Photo: Getty Images for NASCAR)