KHI Closing Shop

KHI has closed his chassis-building business and plans to sell the 80,000-square foot shop in Kernersville, N.C. Kevin and Delana Harvick’s company employs 140 people.

Races Wins T5 T10 Pole Winnings
NNS 347 10 90 163 17 $10,002,157
CWTS 343 39 137 204 22 $6,457,888
Total 690 49 227 367 39 $16,460,045
CWTS Championship 2007, 2009

Here’s what Harvick said about the decision to close KHI's racing operation

SiriusXM Morning Drive interview

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Permalink Reply by Bigzoom on September 9, 2011 at 11:54am
It's sad the sport has come to this, but Harvick was candid. The business model doesn't fit to run a Truck team. The NW model only makes sense to run out of a Cup shop.

Sprint (Nextel) deal was worth $90 million per year. There's 73 Official Sponsors of Nascar. The following once sponsored teams: Citi, Coca Cola, Coors Light, Craftsman, DirecTV, Dodge, DuPont, Exide, Ford, Featherlite, Mars, Mobil 1, Kraft, Office Depot, Old Spice, O'Reilly's, Sirius, Raybestos, UPS, K&N, Autolite, Sunoco & Camping World.

Many others still have spnsorship involvment with teams. The following companies have been removed from the sport due to non-compete or exclusiveness: AT&T, Alltel, Motorola, Verizon.

Many companies that compete with "Official Nascar Sponsors" can't enter the sport depending on their agreement
Permalink Reply by WJM on September 9, 2011 at 12:29pm
Top 50 sports advertisers

The top three spent over $1 billion in sports advertising in 2010. Guess where they didn't spend? When did you last see a Budweiser commercial during a Cup race?

Exclusivity deals: good for NASCAR, INC. Bad for teams.
Permalink Reply by Bigzoom on September 9, 2011 at 12:46pm
2 of the Top 3 (AT&T, Verizon) aren't allowed in Nascar. Thy would each sponsor a team.
Permalink Reply by WJM on September 9, 2011 at 1:24pm
Sprint's exclusivity goes beyond carrier service. It also includes hardware which shuts out manufacturers of all handheld devices. Remember in 2007 when NASCAR had Robby remove the Motorola logos? Ultimately NASCAR allowed him to advertise only "digital audio player" in some generic form without mention of Motorola. That's a deal killer for any team.
Permalink Reply by Josh Fisher on September 9, 2011 at 4:09pm
Another thing about sponsorship is 15-20 years ago there were 10 companies that owned 10 separate brands.... Now it's 2 or 3 companies owning those same 10 brands.

Look how many Brands Pepsi or Coke have, look at how many Brands AB InBev & MillerCoors have.... Yet you only see Pepsi/Pepsi Max, Mountain Dew/Amp, Coke/Coke Zero, Gatorade, Powerade, Budweiser & Miller Light being used to sponsor cars. Pepsi could afford to take 15 of their brands to 15 different cars for 15 races each, but yet they don't and it's hurting teams at all levels of racing across all disciples of racing.
Permalink Reply by Justin Smith on September 9, 2011 at 10:16pm
Good to see Pepsi slapping Pepsi Max on Tommy Baldwin's car for a few races at least. At least someone other than Hendrick Motorsports is getting some Pepsi love.
Permalink Reply by J.R. Sands on September 9, 2011 at 10:25pm
I saw that as well...Nice job Tommy
Permalink Reply by NIKAL on September 9, 2011 at 12:40pm
Delana was on Sirius yesterday with Dave Moody and Angie Skinner. She spoke a bit about this and just said that they loved having the teams and even through the tough times they still enjoyed every bit of it. But with that said it was tough to continue from a business side of things. KHI will continue, but it will be like it was when they started it. Delena will handle Kevin's racing, personal business, fan club and websites stuff.

Delana said her and Kevin will have input regarding the #2 and #33 NW teams, but the day to day and sponsorship stuff will be handled by RCR. She felt working under the RCR banner will help in the marketing dept. The other good news is Elliott Sadler will stay in the #2 car and become part of the RCR team.
Permalink Reply by NIKAL on September 9, 2011 at 1:03pm
BTW on Dave and Angie's show Angie spoke about what the perfect model a Truck team looks and bases its budgets around. She said most teams figure a budget of around $100K per race. This number is derived by figuring your yearly operating costs and dividing that by the number of races per year. She said a few teams like KHI and KBM's model is closer to $120 -$125K per race. Many smaller single truck teams running out of small shops that outsource the majority of their work and parts can do it for much less. But those teams are also not the teams competing for wins or top 5's regularly.

The fact is most if not all truck series teams are not coming close to the model number it takes to run these teams. With the reduced purse and financial support from NASCAR it is going to make competing in these lower tear series that much tougher from a business stand point.

Angie said for both her and Mike it has been tough and frustrating as Mike has been reduced to starting and parking for income as he cant find a ride in any of the three series without bring a sponsor or financial backing with him. Many of these drivers coming into the sport today are bring there own money with them to finance these rides. I know personally the only paying sponsor Germain has is Geico. All the other teams sponsors are sponsors that were brought in with the drivers. And those are sponsors are paying substantially less then the model number.
Permalink Reply by Ben Cartwright on September 9, 2011 at 2:55pm
randy moss motorsports is also finished after this year
Permalink Reply by Scott B on September 9, 2011 at 5:04pm
I think there is more into this that will eventually come out.
Permalink Reply by Head Held High on September 9, 2011 at 6:27pm
+1

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