Sponsorship deals not always all they're written up to be

On Motor Sports

March 14, 1999|By Sandra McKee | Sandra McKee,SUN STAFF

Sometimes, sponsorships are less than meet the eye.

Going into this season, Big Daddy's BBQ Sauce had signed $6 million in contracts with race teams. But just three months later, two of those teams have severed the agreements because of Big Daddy's failure to make payments and a third is working diligently to preserve the relationship.

Dan Lloyd, the owner of Big Daddy's BBQ, feels caught in the middle.

Sitting in his Oklahoma City office, suffering with a massive headache and pneumonia, Lloyd, 54, explained why he has not met his obligations.

"I'm not hiding from anyone," Lloyd said, breathing heavily. "I'll take responsibility for this. But I didn't go into this to make a mess of it. I didn't just run out here and make these deals on a maybe."

Lloyd said he contracted with JB Marc & Associates in January as underwriter of a guaranteed $7 million stock offering to net $6 million to cover race team sponsorships in nine racing series, including those in NASCAR and the Indy Racing League.

But when the Twin 125-mile qualifying races rolled around the Thursday before the Daytona 500 last month, Winston Cup car owner Junie Donlavey hadn't been paid, and plans to run Mike Harmon for rookie of the year with Big Daddy's sponsorship were dead.

Last week, Rick Galles, the owner of the IRL team that was to have been driven by Davey Jones, sent Lloyd a letter stating Big Daddy's had defaulted on its contract. And Henderson Motorsports' Busch team, which also had not received promised funds, was in daily contact with Lloyd, working to keep their deal intact.

"JB Marc sent out letters of guarantee and then undersold our stock out the back door," said Lloyd.

Joseph Blumenthal, president of JB Marc & Associates in New York, and Alan Berkun, identified as the company's general counsel, called Lloyd's statements false. At first, Blumenthal said Lloyd had sent him "a letter of recision, to stop doing that deal." And later, through Berkun, Blumenthal said he had "declined any type of contractual relationship with Big Daddy's."

Their accounts are contradicted by a copy of a Feb. 4 letter, from Blumenthal to Henderson Racing on JB Marc letterhead, confirming the first allocation of $165,000 would be made to Henderson.

Last October, Berkun and Blumenthal were each censured, fined and barred from the securities industry by the National Association of Securities Dealers Inc. Berkun declined to comment on the censure and said his client had nothing further to say.

Lloyd does have a number of teams racing. He surprised a lot of people when he showed up at Las Vegas last week as the sponsor for Jeff Davis' Winston Cup team.

Joe Madore, the business director of the Big Daddy's Pro Super Truck Series, said Lloyd has kept all of his commitments to that series, having spent more than $2 million on the arrangement last December before his underwriting troubles started.

Todd Creasy, controller for Henderson Motorsports, said he is continuing to work with Lloyd and expects to be able to have their team on the track in 30 days.

Donlavey, however, wants no further dealings with Big Daddy's. In La Jolla, Calif., Galles is now seeking another sponsor and considering legal action.

Lloyd said he hopes to put together a new offering of Big Daddy's stock to raise money to meet his commitments. However, the stock, which was trading at a high of 4 3/8 in January, closed Friday at 31/32.

"As soon as I can get the new underwriting ready, Henderson Motorsports will go racing," said Lloyd, who added he also hopes to make good on his deal with Galles.

"If I don't do it right, it ruins Big Daddy," said Lloyd, who first concocted his sauce in 1970 and finally formed a public company to mass-market it last April.

Zooming along

Winston Cup driver Ward Burton seemed to be flying at the start of the Las Vegas 400 Sunday, zipping from 30th to first in 45 green-flag laps. But at the end, his crew chief, Tommy Baldwin, was urging him to go faster.

"Drive it like you stole it," Baldwin radioed his driver.

Ward, who hasn't won a race since 1995, finished second to his brother, Jeff, and said he had "a tear of two" because he was so sad not to be in victory lane.

That reaction was much better than the one he had in 1987, when going for the lead in a Late Model Stock race in South Boston, Va., Jeff ran the nose of his car six inches under Ward's rear bumper and wrecked the two of them.

"That day brought us closer together as brothers and as a family," Ward said. "I got out of my car and I got him by the throat and lifted him up -- until I saw our dad coming. Then I put him down and went on back to my pit. We both learned from the experience.

"He'll always be my younger brother. I have to respect him and take up for him right or wrong."

Nuts and bolts

In the strange-twist department, NicoDerm CQ-Nicorette will become the first and only smoking cessation product involved in major-league auto racing when it sponsors the car driven by Dennis Vitolo in CART's Marlboro Grand Prix of Miami, next Sunday. Jeff Burton has picked his NCAA Final Four: Duke, Michigan State, Maryland and Stanford. It looked good at the start.

Baltimore's Larry Kopp is currently second in the NHRA Pro Stock Truck series standings. Donald Trump's efforts to build a major motorsports facility in the New York City area got a boost Friday when NYISC, a wholly-owned subsidiary of International Speedway Corp., signed on to help develop a track. "We look forward to the opportunity to bring premier motorsports racing to the area," said Bill France, chairman and chief executive officer for ISC. "[This] shows our commitment to the racing fans in New York City."

Pub Date: 3/14/99

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