Speaker 1:
From the Library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's 12 exchanges and six clearinghouses around the world. And now, welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
The New York Stock Exchange celebrates excellence each day that our opening bell rings, another company marking an initial public offering. It might be a major event that one of our listed companies is sponsoring, like last August when FedEx corporation, NYSE ticker symbol FDX, which listed here initially on December 28th, 1978, rang the opening bell to celebrate The FedEx Cup, golf's season ending 10 million dollar championship series.
Josh King:
There's another storied moment that happens just once a year. And it, too, is a celebration of excellence. And this year, FedEx was also there at the crowning moment. The checkered flag at the Daytona 500, tens of thousands of fans screaming in the grandstand, millions more watching at home, in the 61st running of the Great American Race, opening the curtain on the 2019 season. You'd have seen, if you were watching glued to the set like me, the number 11 FedEx Toyota, driven by Denny Hamlin for Joe Gibbs Racing, grabbing the honors as darkness settled on Florida, a series of Big One multi-car crashes filling the straightaway in Hamlin's wake.
Josh King:
It was the second Daytona 500 win for Hamlin and Joe Gibbs Racing in four years, which, in the annals of auto racing, puts Hamlin in league with only 11 other drivers in NASCAR's long history, those who've had multiple victories in the season opener spectacular, names like Richard Petty, who won it seven times, Cale Yarborough, who took four checkered flags, Bobby Allison, Dale Jarrett, and Jeff Gordon, who won three each, and Hamlin and six others who've now won two.
Josh King:
I was indoctrinated as a NASCAR fan watching the aforementioned Mr. Jarrett behind the wheel of the number 88 UPS Ford for Robert Yates Racing toward the end of Jarrett's career. But UPS scaled back its sponsorship of NASCAR not long after Jarrett left the ride, leaving Hamlin a clear lane representing the big delivery services in Victory Lane. And he's represented the industry well, 32 NASCAR Cup Series checkered flags and a spot in the championship playoffs every season he's competed full time, now stretching to 12 seasons.
Josh King:
Hamlin's best season may well be the one that's just begun. A win at Daytona in February will do that to the hopes of a driver, his team, and his owner. Atop the standings in points now with 38 races spanning 10 months to go, he's got a long way before the season ending, that quest to emerge number one at the final race of the season at Homestead Miami in Florida in November. That's why the winner of the Daytona 500 makes a pilgrimage to Manhattan, the media capital of the world, within hours of taking the checkered flag to build momentum and excitement for his sport and drive the interest of the fans from now till November.
Josh King:
A year ago, Austin Dillon sat in the seat where I'm looking at Denny Hamlin sitting today. And we're honored that the NYSE is an annual stop for stock car racing's most recent champion. Does Denny have the car, the team, and the drive to go the distance? We'll find out right after this.
Speaker 3:
Arlo is a next generation smart home company that provides a super simple do-it-yourself home security solution with up to 48% market share and class leading internet technology. We're looking at new products and even grow internationally. The NYSE obviously has a tremendous history. The way that they actually bring the stock to market, there's a human element that stabilizes the market. And you could see that in the stock opening today. Having a strong partnership to actually bring Arlo as a public company was really important to us. You only get to do this once.
Josh King:
James Dennis Allen, Denny Hamlin, was born in Tampa, but lived in Chesterfield, Virginia for most of his childhood. The youngest of five kids, he started racing go-karts at age seven. He plied the ranks of racing through the junior divisions, eventually earning a full-time ride with Joe Gibbs Racing in 2004, with his debut in the number 11 FedEx car, then a Chevrolet, at the Kansas Speedway in 2006.
Josh King:
Since then, as I've said before the break, 32 wins on the top NASCAR circuit, now called The Monster Energy NASCAR Cup Series. For Hamlin, like all of the greats, the highs come with lows, crashes, near misses, faulty fuel strategy, and in 2010, falling short as the series runner up to Jimmy Johnson, just 39 points separating him from the championship in a heroic campaign as he beat back a knee injury that would require surgery.
Josh King:
Denny took a checkered flag in every one of his top serious seasons except his last one, 2018. And he came to Daytona determined to break that string of disappointments. He did it in dramatic fashion, holding off his teammates Kyle Bush and Eric Jones, who were also driving Toyotas for Coach Gibbs. That race and the season dedicated to JD Gibbs, the coach's son who discovered Denny all those years ago, who passed away a few months back. Denny Hamlin, welcome Inside the ICE House. Congratulations on the win at Daytona.
Denny Hamlin:
Thank you. I appreciate it. It was very emotional, like you just mentioned there, with the Gibbs family. And I'm proud to get them another Daytona 500.
Josh King:
JD was quite the businessman. He'd have liked another visit to the New York Stock Exchange.
Denny Hamlin:
Absolutely. He was just such a great family man within incredible faith. And I know Joe was very emotional after the race. When you see the interview of him, he's got his grandkids there, JD's kids, his wife Melissa. Just a tough month overall after losing him. But to win the first race, not only that, but the biggest race in NASCAR, was a great, great feeling.
Josh King:
Let's hear the call from the end of the race. Here's the Big One at Daytona.
Speaker 5:
[inaudible 00:06:46]. Everybody.
Speaker 6:
Good grief.
Speaker 5:
Oh.
Speaker 6:
Are you kidding me? This is big.
Speaker 5:
Wow.
Speaker 6:
But it...
Speaker 5:
Boy, it just reminds me of the class, same type of carnage that we saw where these cars were going everywhere. Lot of damages, they all got to turn three.
Speaker 6:
Well, that ruined everything.
Josh King:
But Denny Hamlin, it didn't ruin everything for you.
Denny Hamlin:
Nope. Nope. Yeah. It was all right for me. I was in front of all that mess. So, yeah. I don't know how many cars were in it. It had to be at least 15. But certainly, we see that on a very common basis in the Daytona 500. And anytime you have a pack of cars running that tightly together, it just takes one person at the front of that pack to make a mistake. And you see it in the Tour de France, right? You see one biker go down. The whole field goes down. And that's what happened there.
Josh King:
It's on a part of the straightaway, but you've got to be seeing this in your rear view mirror. How do you strategically try and stay ahead of that from swallowing you up?
Denny Hamlin:
It's tough because everyone wants to be in the front, because they know that's the safest place to be. But not everyone can do it. There's only a few guys that can consistently stay ahead of the wrecks. But for me, I think that sometimes it's luck. Sometimes, it's really being strategic about where you want to put your car. And really over the last few years, we've been very fortunate and strategic to stay out of those wrecks when they start to happen.
Josh King:
What's in your spotter's headphone at that point? What are you hearing from up on top of the stands?
Denny Hamlin:
Yeah. He's saying, "Massive wreck behind you. Big wreck behind you." He's telling me to roll out of the gas. The caution's going to come out. And usually at that point, they're saying, "Okay, we're going to stop you in turn two to get it cleaned up before you come back around," because they don't like you running through the accident scene. So with that many cars damaged and tore all up and everything, it was a lengthy caution.
Josh King:
We mentioned it a little bit in the introduction and you mentioned it too, but it had to have been a point of pride to have JD's name on your car this year. He was the guy who convinced your dad to give you a ride when he spotted you racing crazy fast in Richmond.
Denny Hamlin:
Yeah. That was something that was really special to me, is that JD was the one that found me. He was the one that went to the local short track and saw me running some laps around there and called his dad, called Joe and said, "Hey, I think we should sign this guy. He's really, really good."
Denny Hamlin:
And at that point, I was just 23 or 24 years old and I was looking to break into NASCAR. It's what I'd worked my entire career to do. Like you mentioned, started racing go-karts when I was six or seven years old. So it was important for me, an important moment and turning moment in my racing career to meet JD and him bring me on his team.
Josh King:
There's this strict protocol at Victory Lane. I saw the video of you doing it. You immediately put on your FedEx hat, but then there's about eight other hats to go. There's the Gatorade shower that you're going to get. You have to do all these things in Victory Lane, but you did something out of protocol order. You mentioned Melissa Gibbs earlier. You bring her right up there with you. She had to have a place by your side.
Denny Hamlin:
Yeah, absolutely. And she was so emotional. I knew it was tough for me to keep things straight, because I knew I had a lot of things to say. But it was important for me to acknowledge her and her kids that had to go through this tough battle with JD over the last two years.
Josh King:
I mentioned the Yates family earlier that had Dale Jarrett behind the wheel. Austin Dillon, who sat where you're sitting last year, is the grandson of Richard Childress. For many of our listeners, Joe Gibbs is the NFL Hall of Fame coach with three Super Bowl appearances. Let's hear a little bit about Coach Gibbs' philosophy.
Speaker 7:
Winning championships is Joe Gibbs's specialty. He's done it at the top level in two wildly different sports. The three-time Super Bowl winning coach founded Joe Gibbs Racing in 1992, growing it to the multi-car powerhouse that consistently competes for championships at NASCAR's highest levels.
Speaker 8:
Well, Joe Gibbs, you're pretty used to the big occasion, the coach of the winning team, just a few weeks back at Super Bowl. How are you feeling today with auto racing Super Bowl?
Joe Gibbs:
About the same way. I'm nervous right now. I know my job here is not as crucial as it is at the Super Bowl, but I know my place here.
Josh King:
He understates his role, doesn't he?
Denny Hamlin:
He does. And he's a hard worker. That's interesting. You hear that, and he still has such a hands-on role today. I guarantee you, Joe Gibbs was at the shop working at 7:30 in the morning. His car was in the parking lot and he was in his office working, calling sponsors, updating them on things that they want to know. He constantly comes into our driver's meeting and writes down, "Hey, what are the drivers fighting? And how can I make that better?" He's just so good with people.
Denny Hamlin:
And that's something that you notice that someone is successful in multiple sports or multiple businesses, is that they know how to get the best out of their people. And that's what Joe does.
Josh King:
I've watched team owners over the years at many tracks in the garage, and they've got so many responsibilities. They've got to talk to the sponsors. They've got to talk to the media. How is coach interacting with you and the hauler in those 48 hours before a race?
Denny Hamlin:
Well, we have quite a bit of conversation. Joe's actually the one that, even though he's a little bit older than I am, he's the one calling at about midnight every night, wondering, "Hey, how's the car?"
Josh King:
Why aren't you in bed yet?
Denny Hamlin:
Yeah. Yeah. Usually, it goes straight to voicemail because I'm on Do Not Disturb after 11:00. But he likes to call late. He's just been used to it. He says his whole life he's been used to staying up, looking at football film and things like that. He's always been a night owl. He's very hands on.
Denny Hamlin:
And what's what I love about him, too, is that when we go to Victory Lane, you got to think about it. He owns four cars. He doesn't come to Victory Lane first after the end of the race. He goes and visits each one of those guys that didn't win and says, "How can I help you? I know your day didn't go well, but how can we get better?" And then he goes and celebrates with the winning team.
Josh King:
What were the adjustments that you needed to make in the off season to start the season the way that you did?
Denny Hamlin:
Well, we really revamped our race team from top to bottom, starting with our crew chief, our pit crew, the people that actually work on the car in the shop and on the road. So we really changed a lot of things. But sometimes, you got to look in the mirror as well and say, "How can I get better?"
Denny Hamlin:
And so I really spent a lot of time in this off season working on looking at data, just like any other sport would look at film. I do all that for racing and really took an analytics approach to say, "What were my weaknesses? When I started in the outside lane, how did I do compared to how I was in the inside lane on restart?" So you can find advantages. You just got to find the gaps in the margins.
Josh King:
The off season comes to an end. Time to put away for Denny Hamlin the golf clubs and the basketballs for a while. What changes to the car and the rules for this year affect all of the drivers, and how do they help or hurt a driver like you?
Denny Hamlin:
Well, I think it helps me simply because my restrictor plate success over the last five to six years. Now, we won't be running with actual restrictor plates, but we have a different rules package that's going to make the cars run closer together. And the hope of that effect is that you have a pack of cars, even on the mile and a half racetracks instead of just the two mile.
Denny Hamlin:
So as for a fan's perspective, you're going from, "Hey, these are cookie cutter tracks and the racing's not all that great," to, "This could be some of the most exciting racing that we have starting this weekend in Atlanta."
Denny Hamlin:
So I haven't got to run it yet. So I'm excited to get on the race track Friday and test this thing out. The only downside, and it might not be downside to the fans, but downside to us is that anytime you're going to run in a tight pack, what happens? Someone makes one mistake, it takes out a bunch of cars. So it could be pretty exciting to watch.
Josh King:
So the hauler gets packed up in Charlotte, your primary car and your backup loaded into the upper deck. What are your thoughts as you head into a place so steeped in history as Daytona, a place you've won before, and your thoughts of what it will take to win a second time?
Denny Hamlin:
Well, I just think about past success and also past failures. And I think the reason that we won this time around is that I'd lost the race last year. I chose the wrong line. And I learned from that mistake when I had that same situation come up this year. So I think that you got to be willing to learn at all times. And sometimes, failures is what leads you to success.
Josh King:
So you got past the failures. The Big One is behind you. Let's hear the call from the very final lap at Daytona.
Speaker 11:
... can't keep hooked up.
Speaker 12:
One lap to go. Two Connecticut Yankees chasing Hamlin and Bush.
Speaker 11:
Wow. What a move by Logano. He got under Kyle Bush.
Speaker 12:
Wow. That was amazing.
Speaker 11:
... Bush.
Speaker 6:
And Preece is coming to help.
Speaker 5:
All right. And that's what he's going to need. He's got to back up to Preece. He's not going to be able to do it on his own. He's got to get that push or Preece. He's going to have to get on the brakes here, but he's got Kyle Bush in the outside lane.
Speaker 12:
Logano and Preece grew up together at the quarter midget tracks in Connecticut. And Logano looks low. Top lane gets filled. It's Kyle.
Speaker 11:
... Logano.
Speaker 12:
Kyle Bush in the top lane, Logano on the bottom. McDowell, the second yellow car, where will he go?
Speaker 11:
I don't know.
Speaker 6:
So interesting that McDowell decided to go with Kyle Bush, but here comes Eric Jones on the inside. Denny Hamlin.
Speaker 12:
Hamlin on turn number four. No side by side battle to the finish this time. Denny Hamlin wins his second Daytona 500 and wins it for Coach Gibbs in Toyota.
Speaker 11:
In the 11 car. Wow. What a day for JD Gibbs, for Joe Gibbs, for that whole team.
Speaker 13:
You are the man.
Speaker 12:
That's storybook stuff right there.
Speaker 11:
That was meant to be.
Josh King:
No post traumatic stress listening to that call, huh?
Denny Hamlin:
No, not at all. It's definitely some good memories. And I hadn't actually heard the last live call yet. So that was interesting to hear that all going on. And I knew what was going on inside of my head at the time. So, yeah, it's just a great night. And I'll relive it the rest of my life for sure.
Josh King:
I think you said at the news conference, "I only survived because I had a teammate back there giving me two bumpers to block with instead of one." Of the 40 cars that entered the race, the casual viewer doesn't think too much about teamwork among drivers, but Kyle Bush really helped you win that race. How does that happen?
Denny Hamlin:
Yeah. We work so well as teammates together. He gave me the option to pull in front of him on that final restart to then try to guarantee one of the two of us was going to win the race for Joe Gibbs Racing, but also allowed him to go on offense and make a move. If I was going to be lining up beside him, there was a chance that somebody behind us was going to jump us and win the race. And so we tried to ensure that one of our team cars won it. I just happened to be on the good end that time.
Josh King:
I read a piece where you're looking at the clock inside your car. I know what time it was because I was waiting for a table at our 7:00 PM reservation at Brandywine Restaurant up in the Catskills. And I'm thinking during the red flag, "Man, this is late." And at the finish it's one, two, three Toyotas for JGR, beating back the field of Chevys and Fords. When I first started watching NASCAR, there wasn't a Toyota in the field. How has it become so successful?
Denny Hamlin:
I think that the NASCAR fan in general has really embraced the Toyota brand and realized how many factories that they have here in the US and there's a US car is out on the road when you look at all the parts and pieces.
Denny Hamlin:
And so even though there was some resistance for the first couple years, they're in the sport now, I think probably 13th, 14th year that they've been in the sport. The fan has really embraced them. And obviously, they've been a great partners of ours at Joe Gibbs Racing. And they give us the tools that we need to go out and succeed. Even though we might not have the numbers that the other teams have, the Fords or Chevys have 12 and 13 cars each, and we have just five, we can still make it successful.
Josh King:
Denny, Kyle Bush, your teammate, said, and I quote, "Brains come unglued. That's all it is. The brain's connection to the gas pedal foot just doesn't quite work the same anymore." How do you keep your brain glued during a red flag with darkness descending on Daytona and just a few laps to go?
Denny Hamlin:
Well, I just rest on past experience. Trust me if I was a rookie, I'm nervous the whole time during the caution, I'm worried about the mistakes, I second guess myself, and I'll probably lose the race. But I'd been there so many times before that I was comfortable in the decisions that I was going to make and I was going to live with the outcome.
Josh King:
Do you meditate? Do you hear a lot of radio traffic? Do you try and tune stuff out?
Denny Hamlin:
I try to tune out quite a bit. But for me, I'm also listening to the spotter, the one that's telling me what's going on around me, because that's how I drive the car faster, is he has to tell me where the cars are around me so I can use those cars to go faster.
Josh King:
A 23 year-old JD Gibbs was a tire changer for Dale Jarrett, who I mentioned earlier, at Daytona in 1993. He forgot to secure all five lug nuts in the final pit of that race, giving everyone white knuckles in the final laps. But still, Jarrett held off Dale Earnhardt Sr. for his breakthrough win.
Josh King:
You have a new crew chief this year in Chris Gabehart. How do you and Chris mold your current team to make sure all of your lug nuts are fastened on all of those pits?
Denny Hamlin:
Yeah, it's super important now. Now more than ever, we're going faster than what we ever have in history. But certainly, I have so much faith in the pit crew. Those guys are trained professionals. And back in the day, when JD kind of ... I remember on the last pit stop, he said, "Didn't get all the lug nuts tight for Dale Jarrett." He remembered and they said, "Hey, are you going to tell the crew chief?" And then he says, "No, I'm not going to tell him." And they said, "Well, is it the tire going to stay on?" He said, "Well, we're about to find out."
Denny Hamlin:
So that'd be a big no-no because we're going too fast. Too much stuff can happen. But certainly now, these guys are trained athletes that are coming from other sports that either maybe didn't make it in football or baseball, just so many giant athletes that pit these cars in 12, 13 seconds. It's pretty amazing. So I got full faith in them that they're going to do their job, and they feel the same about me.
Josh King:
When we come back, more with 2019 Daytona 500 winner Denny Hamlin, his start in the sport, where the season at and the sport itself go from here. That's right after this.
Speaker 14:
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Speaker 14:
There's a reason they call the NYSE The Big Board. It's a great home for companies like us, big companies with big ideas. Cushman & Wakefield, now listed on the NYSE.
Josh King:
Back now with Denny Hamlin, the 2019 Daytona 500 Champion and driver of the number 11 FedEx Toyota from Joe Gibbs Racing. Denny, you grew up in Chesterfield, Virginia, a little south of Richmond, a little north of Petersburg. How did racing get into your blood? Parents, siblings?
Denny Hamlin:
My dad really, he raced a little bit of dirt track stuff, but it was before I was born. And my mom said he wasn't very good anyway.
Josh King:
It was a hobby for him?
Denny Hamlin:
Yeah. It was just a hobby for him. But really, it started in 1985. I went to a NASCAR race in Richmond. I was five years old. And the first time I saw the cars revving around the racetrack and I smelled the tires and the fuel, and it was like, "Ugh. I want to be a race car driver. This is amazing."
Denny Hamlin:
And from that point forward, I wanted to go get a go-cart. And my parents waited until I was of age. At that time, you had to be seven years old to go out there and run. So we waited till then, got a go-cart, took it to the track, and instantly was hooked from then on.
Josh King:
Did you just buy a go cart off the rack, or did you have to build it from the wheels up?
Denny Hamlin:
No. We bought it right out of the newspaper. It was like 200, "race ready," which means it's just sitting in this guy's backyard.
Josh King:
There's been plenty written about your other hobbies, managing your own golf tour and basketball league. Let's hear a little sound from the Hoop Group.
Denny Hamlin:
There was always some kind of social media or on Twitter, people would see me playing basketball. So they'd say, "Hey, I want to come play." And the group just got bigger and bigger. And next thing you know, we're up to 30 guys that want to play on a weekly basis.
Denny Hamlin:
Austin Dillon is the point guard of the league. He's probably the only true point guard. He led the league in assists this past season.
Austin Dillon:
I played it in high school a little bit growing up and had a good AAU coach that played at Wake Forest, taught me a lot.
Michael Waltrip:
Got to have a coach. Got to have a head coach. That's why kids play so good.
Josh King:
That's Austin Dillon the point guard and Michael Waltrip the coach.
Denny Hamlin:
Mm-hmm (affirmative).
Josh King:
Does the organizational and competitive challenge help you keep your mental edge behind the wheel, or is it distraction from your job one?
Denny Hamlin:
It never has before. And actually, I think the relationships that I build through maybe the golf league or the basketball league helps me in situations where, hey, you need that friend on the racetrack at the end of these races. They're more likely to give you a push than someone that they don't hang out with. So I think those relationships that I've built have paid dividends in the past.
Josh King:
I watched some of the video of it. You said something, that you started it out on an outside wherever you lived, first of all.
Denny Hamlin:
Yeah.
Josh King:
And now, you've got a pretty swankier indoor gym. They must like coming over.
Denny Hamlin:
They do.
Josh King:
It's a good setting for a game.
Denny Hamlin:
It's convenient. I got a nice springy floor, because I've had two bad knees, of course getting up there in age. So I don't have quite the jump that I used to have. But certainly is a lot of fun. And now, listening to that, we're up to 42 guys. So it continues to grow and we have a draft every year.
Josh King:
Forty-two guys is eight teams?
Denny Hamlin:
Seven teams. So we just keep building it up.
Josh King:
You, like every other driver, Denny, have a rhythm that you follow week after week, race after race. You're breaking that rhythm now with a side trip to the Big Apple. But from minute one when the race wraps up to when the next green flag falls, how does it usually play out that week?
Denny Hamlin:
Yeah. My weeks are pretty scheduled. I know what I have ahead of me each week. After the race, you get to the airplane, you head home. Monday, we'll have a meeting at Joe Gibbs Racing, talking about the past weekend, what we can do better. We'll talk about what do we do good, what do we do better. It's really a round table discussion with all the crew chiefs. Joe's in there because he wants to write down notes to then go back and tell the sponsors, "Hey, here's why we were good. Here's why we were bad."
Denny Hamlin:
And so that will happen on Monday. I'll go to Pilates. I'll do some training throughout the week. And really, I'll get Tuesday, Wednesday off to do whatever I want to do. So I'll get back in the gym that morning as well. But I'll just mess around those two days, hang out with the kids and stuff like that. Got one that's one years old and one that's six, and so she's just now starting kindergarten. So really enjoy my time with them. And if it's during the summer, I'll go golfing or something during the day.
Denny Hamlin:
But really, for the most part, the work will then start on Wednesday evening where I'll get an email. We'll have a bunch of different information that they'll send me for the weekend upcoming that I've got to study.
Josh King:
As the Daytona 500 winner, you've got a special obligation to serve as an ambassador for the sport, as you're doing here at the NYSE and as you'll really do throughout the year. It's probably a good problem to have, but is it a problem for your routine? It's a real duty to hold this mantle.
Denny Hamlin:
Yeah. It's not. I love it. I really do. Representing, especially NASCAR on this type of stage and feel like, you know, I can relate to a lot of different people that are out there in diverse groups that watch NASCAR. And so I enjoy it. I really do. Even thought it might be a little bit of time away from home, I said that one day, that one tough full day is worth it, because the rest of your life changes.
Josh King:
How do you go about bringing new fans into the sport, people who might have just tuned into your race just as a kid a couple days ago? Coming here is one thing. Signing autographs is another. Social media a big connection for drivers?
Denny Hamlin:
It really is. And really, it's changed the game of how people actually watch the race as well. There's so many live streams and people are getting live updates and things like that. And really in all sports nowadays, it seems like people are watching differently than just sitting down and watching TV. So it's great to be a part of this sport. It's something that I strived for ever since I was a kid. And to be able to accomplish the things we have at the highest level of my profession is really a great feeling.
Josh King:
We've talked about your owner. We've talked about your crew. We've talked about your own approach to gearing up for a season. We talked about the fans. The name you have on your hood and quarter panel, FedEx, a lot of continuity for them with you. How does your sponsor, number one, help you win. And number two, as a businessman, how do you help FedEx win the race for shipping?
Denny Hamlin:
Yeah, I tell you, it's been a great part partnership we've had with them. And I love that they see how much value is within the sport. They've been a full-time sponsor now for 14 years, which is something very, very rare in our sport, that someone that is all in like they are in NASCAR and in all sports really. But NASCAR, they really do believe in. The business-to-business agreements that they have really works out well. Not only that, they can entertain so many employees and customers. And when they started their racing program 14 years ago, Fred Smith told me, "We did this for our employees. They asked us. They wanted to be part of NASCAR. And so we did this for them."
Josh King:
In my early years as a fan, which started ironically with Dale Earnhardt Sr. died at Daytona in the race that you've won twice, he was driving the number three Goodwrench Chevrolet. As I looked at the starting field of the most recent Daytona, not as many well known corporate names on the hoods. We've heard stories about how the 30 million dollar price tag to run a car over 38 races has scared off sponsors. FedEx seems to be among a smaller group of household names. What are today's economics compared to the day when The Intimidator was behind the wheel of number three?
Denny Hamlin:
It's different. The landscape has certainly changed. There's no doubt about it. Speed costs money. And teams really have started to realize that. And so it got to the point where engineering has just taken off. You can't unlearn anything, right? So we know that running the cars right on the ground is faster than not.
Denny Hamlin:
So these teams started to hire more and more engineers, and that costs money. And you wanted to hire the best pit crew members, because God forbid you have the fastest car and lose it on the final pit stop. So I think that NASCAR and the teams have gotten together and had great meetings over the last couple years on how can we reel that back slightly. Not necessarily a salary cap, but how can we help each other?
Denny Hamlin:
And some of those things have already been implemented in the sense of there's been no off season testing that the teams are allowed to do, like they used to five, 10 years ago. The teams just got together and said, "Look, we're killing ourselves. We're out here testing, trying to beat each other. Let's call a truce and say no testing for anyone." And so little things like that, really.
Josh King:
So it's okay that you show up to Atlanta cold, not having run this package.
Denny Hamlin:
And the teams are okay with that, because the computers are now driving what's in the car instead of the people. So I think that they're doing a good job of trying to manage that cost and get that number down at least half of that, because when Dale Earnhardt was in this sport, the number probably was in the five to six million range. And so it's really jumped up, and that's been a challenge
Josh King:
On Kyle Larson's 42 car, for example, the company I used to work for First Data sponsored about a half dozen races along with Target, Credit One, DC Solar, and McDonald's. Is splitting the sponsorship an effective way forward? And you have the luxury of only having to name really one primary sponsor.
Denny Hamlin:
One. Yeah.
Josh King:
But Kyle has to keep whichever ... He doesn't know what's on his car that week.
Denny Hamlin:
Yeah. It's difficult, but it's also probably the future business model, because these teams are able to go out and attract sponsors that maybe are very big in that local market. So obviously, FedEx is big pretty much everywhere, which makes it pretty easy. But some of these companies like you talked about, they're niche companies that are good and big in certain areas and want to really promote their business or entertain customers at certain racetracks. So it is definitely a feasible business model that seems like the teams are doing to fill the void of the money that's missing.
Josh King:
The next Superspeedway race is Talladega, April 28th. How quickly can NASCAR incorporate the data and telemetry from Daytona to make any changes to the way the next high speed race is run? Is there anything different you'd like to see from the way Daytona played out, mindful that the results were favorable to you, or is everything A-okay?
Denny Hamlin:
I think everything's A-okay. It's the drivers making the mistakes. That's the bottom line about it, is that if we all held our line and raced within our means, then we wouldn't have the wreck. It's not the cars causing the wrecks.
Denny Hamlin:
Now, certainly the package that we have causes us to run closer together, but we're the ones that are not willing to give the person on the inside or the outside a foot of room to maneuver his car. So that's the issue with it. But certainly, when you think about it, the fans come there to see a lot of excitement. And sometimes, they come there to see those 15 car pile ups. And that's just part of our sport.
Josh King:
The last few years have been tough for NASCAR for a couple of reasons. Some of the legendary names like Jeff Gordon retired. There's been some stories about tracks removing grandstands so the seats aren't looking so empty, yet I've heard you on a few podcasts talking about this being the golden age of racing. Make the case for that.
Denny Hamlin:
Well, I think that the best years are ahead, simply because it got to the point where, like I talked about, that the teams were spending so much money, but the sponsorship dollars were going down because teams have figured different ways to market. And obviously, with whole age of social media, Twitter, and Instagram and everything, the sponsorship dollars get spread around to a lot of different places. It's not just, "We want to sponsor the race car for X amount of dollars," and that's it.
Denny Hamlin:
So it's getting spread amongst too many people now. And so they have to figure out a way to run these race teams efficiently with less sponsored dollars. And some of that money, most of that money comes from the TV contracts. And so I think everything's on the table going forward with NASCAR. They're looking at schedule changes, ways to make the cars more cost effective for the race teams.
Denny Hamlin:
So I believe that there are peaks and valleys, and there has been in every sport. But certainly it hasn't been pretty over the last few years, but there's certain ... You can see with the ratings of Daytona up 8%, that I think the best years could be ahead for NASCAR. And certainly, I'm pretty optimistic that knowing that a sponsor like FedEx sees value in it is probably a good business model.
Josh King:
You're a member of the NASCAR Driver's Council. So you get really a voice in some of the things that are going to change NASCAR going forward. I think I saw you speak or tweet about the need at some point to really reign back on the schedule that has you out at the racetrack on a Thursday for practice with qualifying on Friday. That Thursday day, when this stands are pretty much empty, the motor homes haven't really set up yet, this is a day when you could stay back in Charlotte and give your teammates another full day of rest. Less fatigue across the season.
Denny Hamlin:
Absolutely. And that's what I was saying about it, is it's really not about us, right? We'll show up on Wednesday if you want us to. But it's about these team guys that travel. We have the privilege of traveling with our families. Those guys don't get to, the team members. And the struggle within our sport is finding good mechanics and good guys that want to stay on the road. You almost can't pay them enough money because they just are like, "I'm away from my family for 10 months and I never get to see them." It's a seven day a week job.
Denny Hamlin:
So it's giving them that extra night at home. And not only that, you also then save on hundreds of hotel rooms. And that helps with the cost effectiveness as well for the race team. So I think it's a win-win with these condensed schedules, two-day events that NASCAR has gone to over the last couple years.
Josh King:
Management of the sport at the driver's meeting in Daytona, Jim France, who took over for his nephew Brian last August, recommitted his family to NASCAR saying, and I quote, "This sport was built by families, and we're just a part of it. It's so important that we remember that this is still a family business. Our family is committed to it. It's a tough, tough sport, tough business. It's hard, but we've got a soft family side, and that's what makes NASCAR special." What would stock car racing be without the France family?
Denny Hamlin:
Nothing. And I continue to say why I'm so optimistic is that look what it did when they spent 400 million on Daytona International Speedway. The Daytona 500 has been sold out now for the last few years. They are reinvesting in our sport, and in lots of different ways. You see it with Phoenix Raceway, which is ISM, Richmond. They have plans now for Talladega. There's so many racetracks where they're reinvesting money back into these places, because honestly the people that go to sporting events, they're not okay with just sitting in aluminum bleachers for four hours anymore. It's a different landscape.
Denny Hamlin:
They expect to be at Lexus Stadium with a cup holder sitting here and someone coming to bring them a beverage. It's just that people expect more now. They're way more high maintenance than what they used to. NASCAR sees that. They see that people want to be more social. I've been to so many baseball games within Charlotte with the Charlotte Knights. I couldn't tell you one player on the team, but I go there because it's social, because I can hang out with my friends and it's a fun place to hang out.
Denny Hamlin:
So you're starting to see that with NASCAR. It's more of a family event. They're putting on concerts and everything before the event. So it's more than just the race.
Josh King:
Just tell me they're not going to get rid of that flame red hot dog at Martinsville.
Denny Hamlin:
They tried to, but they quickly brought that back.
Josh King:
There's a lot of talk, Denny, about the G7 car currently in development, slated for its debut in 2021. What should the normal, maybe casual fan of NASCAR on television or the track think about how a new car might represent the future of racing?
Denny Hamlin:
Well, I think it's important for the manufacturers to be able to identify. And they want their car seen as the same car that you can go out and buy on the street. Now, obviously that's not going to be the case. But certainly, there was an aspect to stock car racing that was stock. And morphed its way away from that.
Denny Hamlin:
But you saw with the reduction of horsepower that's starting this year with 550 horsepower, that's a little bit more like what you'll see on a showroom floor for a high performance vehicle. The 700 and 900 we used to have just a few years ago wasn't realistic. And so I'll be interested to see that new generation car that will be in the track in probably just a few, two or three years. Where will the manufacturers take it? Will it look even more like a street car? How much technology will be built into it, similar to what you see on the inside of a street car? It's something I'm pretty excited about.
Josh King:
But at least for the next two or three years, Denny, you're still going to be in the Gen 6 car for this season and next. For those picking up your upcoming journey to Atlanta and then Las Vegas, Phoenix, and LA, and all the races that follow, what are the signs they should be looking for from Denny Hamlin and the number 11 FedEx as keys that you're on your way to a championship in Miami?
Denny Hamlin:
Well, I think it comes down to leading laps. I think that's a great barometer for how are you truly running. You can win races, but sometimes you might luck into them or something like that. Eventually, you got to have preparation. But are you leading laps? That means you have speed. And when you have speed, you win more races. And for us, we want to win at least three to four races before the playoffs start to give us a nice cushion of playoff points. And that's something that we've struggled with over the last couple years. If we can do that, we'll be pretty successful and hopefully have a chance in Homestead.
Josh King:
Denny Hamlin, good luck with the rest of the season. Thanks for joining us Inside of the ICE House.
Denny Hamlin:
Thank you.
Josh King:
That's our conversation for this week. Our guest was Denny Hamlin, winner of the 61st running of the Daytona 500, The Great American Race. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a question or a comment you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet us @NYSE. Our show is produced by Pete Ash and Ian Wolf with production assistance from Ken Abel. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor is affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
