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Wednesday, August 15
Earnhardt still in marketing fast lane
By Darren Rovell
Dale Earnhardt died almost six months ago, but his moneymaking ability continues to live on.
While some predicted the frenzy for anything with Earnhardt's name attached to it would decline shortly after his death in a last-lap accident in the Daytona 500 on Feb. 18, Earnhardt's black No. 3 remains No. 1 in collectors' eyes. "The Intimidator" still has a dominating presence on the racetrack, and items bearing his likeness continue to dwarf those of other sports icons like Michael Jordan and Mickey Mantle on online auction sites.
"He's got the mystique about him," said Fred Wagenhals, chief executive of Action Performance, the exclusive producer of Earnhardt's die-cast car replicas. "Whether you liked him or disliked him, you want to buy his product."
Earnhardt's name was the 98th most-searched keyword on eBay in January. Fueled by interested generated by his death, his name catapulted to the top of that list in February. At one time, there were more than 60,000 items -- from Coca-Cola machine covers and Winston Cup championship tool boxes selling for $2,500 to race-used driver suits at more than $8,000 each. He hasn't fallen below No. 7 on eBay's most searched list since February.
Even items associated with Earnhardt fly off the shelves. In November, Earnhardt joined an ownership group of the Chicago White Sox Class A affiliate, which play in his hometown of Kannapolis, N.C.
The Piedmont Boll Weevils were renamed the Kannapolis Intimidators and their logo was redesigned by NASCAR artist Sam Bass, and now the team's cap is boasted as the best-seller among minor league teams this year, according to Marshall Smith, the Intimidators' communications director. In May, QVC, the shop-until-you-drop round-the-clock cable network, came to Kannapolis and sold more than 5,000 Intimidator caps in two hours. Smith said orders have been shipped to Europe, South Africa and Afghanistan.
If there's anyone who knows how much fans covet Earnhardt memorabilia, it's Wagenhals. He sold his house in 1992 to help raise the $300,000 he needed to pay Earnhardt for a licensing fee.
"I knew he was the Michael Jordan of motorsports," said Wagenhals, who founded the company just months before he signed the check. "I knew that if I could build a company around him I would be in good shape. But it was only after his death that I truly realized exactly how popular he was."
|Dale Earnhardt souvenirs are still hot items among NASCAR fans.|
Today, Earnhardt's Action memorabilia, which includes cars, T-shirts and hats, makes up 21 percent of the company's total revenue, which is expected to top $300 million this year. Wagenhals hasn't inflated production to capitalize from Earnhardt's death, but he did say the Intimidator's recent surge in popularity has increased the collectible sales for other Action-licensed drivers, including Jeff Gordon, Rusty Wallace and Dale Earnhardt Jr.
The growth of the industry still fueled by Earnhardt has helped Action (NASDAQ: ACTN), which went public in 1994, become one of the stock market's best performers so far this year. After opening at $2.44 a share on Jan. 2, it has climbed to $23.74 by noon Wednesday, an increase of 973 percent. Not bad in the face of a 14.3 percent overall decline of NASDAQ stocks during the same period.
"Everywhere you go people are talking about Dale," Wagenhals said. "He's always on the top in track-side sales."
That was "always" until Aug. 5 at the Brickyard 400, when -- for the first time in Action Performance's nine-year history -- Jeff Gordon and Dale Earnhardt Jr. items outsold Dale Earnhardt Sr.
Dale Earnhardt Inc., the racing corporation that includes drivers Michael Waltrip, Steve Park and Dale Jr. and is now run by Earnhardt's widow, Teresa, hasn't benefited directly from the continued growth of Earnhardt collectible sales in the secondary market. No official memorial memorabilia has been manufactured, and no additional licenses have been granted since Earnhardt's death. Product limits, too, have been set since the beginning of the year, according to DEI spokesman Steve Crisp.
DEI, however, will continue to cash in on its deal with Action Performance and some 200 more licensing agreements that pay royalties for the right to use Earnhardt's image on items ranging from coins to blankets to statuettes.
Action Performance's 15-year deal with DEI runs through 2011. It still has more than 70 of Earnhardt's cars it has never replicated and more and more older cars are being discovered all the time, Wagenhals said.
"We've be real cautious not to put out a lot of product," Wagenhals said. "When Dale was alive, he always said, 'Keep the fan's hungry and that will build value in the long run.'"
|Even six months after his death, Dale Earnhardt remains a presence at NASCAR tracks around the country.|
Earnhardt Jr. has benefited from his dad's sponsorship deals. Dale Jr.'s sponsors include Budweiser, Remington Arms, Coca-Cola, Snap-On Tools and Chevrolet, all companies which his father had as sponsors. But while many Earnhardt fans might adopt Dale Jr. on the track, the popularity of his father may hurt his chances of landing the huge endorsements.
"I think, in time, we'll see a good deal of Dale Earnhardt (Sr.) in the endorsement world," said Bob Williams, president of Burns Sports, a sports marketing firm that partners athletes with companies for endorsement opportunities. "Deceased athletes like Mickey Mantle, Babe Ruth, Jackie Robinson and Lou Gehrig all have been featured recently. Dale can jump into that category in another 18 months or so when things settle down and the intense grieving period is over.
"I think Dale Jr. to some extent will be hurt by the fact that his father's estate will continue to get deals."
In the end, Earnhardt's greatest legacy might be felt not by the family and company he left behind, nor the peddlers of trinkets and souvenirs.
FOX, NBC and TBS paid a collective $2.4 billion for a six-year TV rights deal that began this season and, partly because of Earnhardt's death, the networks have enjoyed higher than expected ratings. Since his fatal crash during the Daytona 500, the first major race of the season and the first race televised under NASCAR's new contract, ratings are up approximately 30 percent from a year ago. This despite the fact the networks are still challenged to make a profit as a result of the exorbitant rights fees.
"Certainly Earnhardt's crash on the final lap of the most-watched race in the history of the sport, created tremendous amount of focus and attention," said Neal Pilson, former president of CBS Sports and a NASCAR television consultant. "Many Americans who were not familiar with the sport were shocked by the front-page treatment that coverage of his death received. They said, 'I ought to take a look at this sport.'"
The magnitude of the ratings increase surprised Pilson, but he said the switch from cable to network television added at least 25 million households as potential viewers.
"Dale Earnhardt did not want people to forget about him," Crisp said. "So we're left with the task of ensuring that he will always mean something to fans."
And right now, it doesn't appear fans will forget about Earnhardt anytime in the near future.
Darren Rovell covers sports business for ESPN.com. He can be reached at firstname.lastname@example.org. Send this story to a friend | Most sent stories
|Picking up where his father left off on the track, Dale Earnhardt Jr. stands sixth in the Winston Cup standings.|