Hendrick gets plenty of mileage from his gamble on Larson
CHARLOTTE, N.C. (AP) — Rick Hendrick was convinced there was little risk in signing Kyle Larson, who if given the chance would prove he was worth sponsorship investment after his long suspension by NASCAR for using a racial slur.
The team owner signed machine tool maker Cincinnati Inc. and truck manufacturer Freightliner — existing Hendrick Motorsports partners — to sponsor a pair of races each right before the season. Next came Valvoline, which in April said it was adding three races as primary sponsor for Larson.
Now Larson is the hottest driver in NASCAR and sponsors have to pony up substantial sums to get their logos on the No 5 Chevrolet. Hendrick’s gamble paid off — and continues to pay off.
The Valvoline marketing department had initial reservations about the tie. But chief executive Sam Mitchell said he took Hendrick Motorsports’ word that Larson had put the work in to prove his character.
That trust was rewarded last weekend at Nashville Superspeedway when Larson drove a Valvoline-sponsored car to victory for the first time since Johnny Benson in 2002. Mitchell was at the track with his two 22-year-old sons and celebrated Father’s Day with his first trip to victory lane and the family talked about it on the drive home.
“With my sons being young men, the whole experience that Kyle had, we talked about it, his journey and what he learned from his mistake and that words matter,” Mitchell told The Associated Press. “When you see somebody get a second chance and take advantage of it, and really do the hard work of learning and growing from it and now seeing this success, I think it’s a great story.”
This is what Hendrick bet on when he signed Larson before the season. Larson goes to Pocono Raceway for a weekend doubleheader on a four-race winning streak that includes the nonpoints $1 million All-Star Race.
Valvoline was the third non-Hendrick owned company through 17 races to be featured on Larson’s car this season. The rest of the events have been sponsored by Hendrick subsidiaries, though Hendrick said there is significant interest in sponsoring Larson now.
Larson’s success has put Hendrick’s own businesses in something of a conundrum.
“My guys don’t want to take ‘Hendrick’ off the car. All the dealerships, they’ve got all kinds of promotions,” Hendrick said. “I keep jacking the price up to the automotive group and they haven’t said no yet.”
Since the HendrickCars.com paint scheme was revealed before the Daytona 500, new users have increased 56% and site traffic went up 124% from the previous 135-day period, HMS said. Five of the six highest-traffic days to the site were race days — Larson wins at Las Vegas, Sonoma and Texas, as well as runner-up finishes at Atlanta and Kansas, all races that featured Hendrick’s site for new and used cars on the hood.
Hendrick Automotive has 93 dealerships in 13 states — the largest privately held dealer group in the country — and Hendrick acknowledged after Larson’s win at Nashville that the best business plan might be leaving his company on the car.
“I think we’re getting real close to that,” Hendrick said.
Larson became available to Hendrick only because he lost nearly every sponsor after using the racist slur while racing online in April 2020. The financial blow was so bad that Chip Ganassi had no choice but to fire him.
NASCAR suspended him for the remaining 32 races last season. Even though Larson took considerable steps to redeem himself he remained untouchable for most of the top teams.
Valvoline takes pride in its racing heritage and had initial concerns as a longtime supplier to HMS and Hendrick Automotive. Valvoline spent nine seasons as primary sponsor for Mark Martin, but as the sport exploded in popularity the company was outpriced and in 2001 diversified its NASCAR sponsorship.
Valvoline sponsored only two races in 2018, its first season as a primary backer of a Hendrick car, upped it to three races last year, and is now at five after adding Nashville and upcoming races at Daytona and Bristol for Larson.
“For me, at first, it was, ‘What do I believe about Kyle and I am comfortable with him?'” Mitchell said. “Then it became, ‘Is this a good marketing plan and what are the real risks?’ I knew we were on the side of supporting someone we believed in and then it was just a question of let’s make sure we have the marketing, and his ability to handle tough questions in interviews was going to be successful so that the fans came along with it.”
Mitchell said if Valvoline were a bigger company it would “probably be on the hood in more races.” But the price goes up with each victory for Larson, who is second in the points standings and wooing fans all over the country. His win at Nashville was his fourth in seven days.
Hendrick has won a record 13 Cup Series titles, rode Larson’s winning streak past Petty Enterprises as the winningest team in NASCAR with 271 victories and even after the retirements of Jeff Gordon, Dale Earnhardt Jr., and Jimmie Johnson has emerged with the strongest current lineup in the series. His drivers have combined for eight victories in 17 races and all four qualified for the playoffs.
Long before he entered racing, Rick Hendrick was a car salesman. He has always been able to close a sale and understand the market. He has the hottest property in motorsports now.
It may be too late to make a deal on Larson, especially when negotiating with a car salesman.
“We don’t want to take a piecemeal deal because I think it’s worth more to me than to do that,” Hendrick said. “There’s tremendous interest in Kyle. A lot of companies are telling me they appreciate me giving him the chance.
“Some of them are ready to spend some money, just not enough.”
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