Money losing RPM looking for bailout money

UPDATE #2 Sirius NASCAR Radio's Sirius Speedway with Dave Moody has learned that the sale of a Lake Tahoe Ski Resort by Richard Petty Motorsports majority owner George Gillett this week apparently brought far less to the team's financial coffers than initially believed. Gillett's Booth Creek Ski Holdings, Inc., sold its stock in the companies that operate the Northstar-at-Tahoe Ski Resort to Vail Resorts Tuesday for a reported $63 million. However, a search of public records shows that Northstar-at-Tahoe actually sold for $80 million in November of 2007 to CNL Lifestyle Properties, a real estate investment trust. CNL's company prospectus outlines terms of the sale, and makes it clear that since late 2007, Gillett's company has only managed the resort on their behalf, and not owned it. Industry sources say those management rights likely sold for far less than the claimed $64 million. Further, they say that Gillett personally owns only 2% of Booth Creek Ski Holdings, with his wife accounting for an additional 2%. Thus, Gillett would have received very little cash from Tuesday's sale. Richard Petty Motorsports confirmed late yesterday that it will field all four cars this weekend at Talladega Superspeedway for drivers AJ Allmendinger, Elliott Sadler, Paul Menard and Aric Almirola. Today's news raises new concerns, however, over the team's long-term viability. Sirius Speedway

10/27/10 Richard Petty Motorsports majority owner George Gillett, Jr., made a major move to shore-up the financial standing of the team Tuesday. His Booth Creek Resort Properties LLC sold its stock in the companies that operate the Northstar-at-Tahoe Ski Resort to Vail Resorts Tuesday for $63 million. Gillett reportedly owes approximately $70 million to Wachovia Bank from his purchase of the team formerly known as Evernham Motorsports. It is also believed that he continues to make payments to Evernham for the team, and Evernham told Sirius NASCAR Radio's Sirius Speedway with Dave Moody that Gillett is current in his payments. The former car owner and championship-winning crew chief declined to discuss the inner workings of the team, beyond confirming that he receives regular updates on RPM's finances. Informed sources say that without the infusion of capital, RPM would not have been able to compete at Talladega Superspeedway this weekend, despite the return of the team's Talladega chassis and engines by Roush Fenway Racing and Roush Yates Racing Engines late last week. There is no word on whether today's $63 million cash infusion will allow RPM to compete for the remainder of the 2010 season, or on how it might impact Richard Petty's attempt to secure financing for a purchase of Gillett's ownership stake. Sirius Speedway

10/26/10 George Gillett's financial difficulty following the sale of Liverpool FC has thrown the future of Richard Petty Motorsports into doubt and left the NASCAR team's owners and lenders searching for investors to keep the team afloat. The Gilletts and Pettys, which are two of the NASCAR team's principal owners, began an aggressive search for investors this month. RPM has hired the Gordian Group, a New York-based investment bank, to assist them in their search, while the syndicate of banks that lent Gillett more than $90 million to buy the team have been working with FTI Consulting, a global consultancy specializing in corporate finance, to find investors, sources said. A spokeswoman for RPM declined to comment. The search for funding for RPM follows a challenging financial year for Gillett. The team reportedly defaulted on its roughly $90 million loan last February, and Gillett, who owns as much as 70% of the team, has been unable to restructure it. Gillett was counting on the sale of his stake in Liverpool FC to assist him in funding the NASCAR team. But Liverpool sold two weeks ago for $475 million, a sum far less than Gillett and co-owner Tom Hicks expected and one that has put a heavy strain on Gillett's liquidity.

The team was renamed Richard Petty Motorsports in 2009 after Gillett formed a partnership with Petty that gave the NASCAR great a roughly 4% stake in the team. The partnership followed the closure of Petty Enterprises. RPM plans to run two cars next season after running four this year. Only one of the 2011 cars, the #9 Stanley Tools Ford to be driven by Marcos Ambrose, is sponsored. The team remains in negotiations with Best Buy about extending its sponsorship of the #43 car driven by AJ Allmendinger. More at Sporting News/SportsBusiness Journal