The Shell Game

An inside look at how the oil and gas giant became -- and still remains -- the sponsor for Roger Penske's racing empire

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In an administration building just outside turn 2 at Michigan International Speedway, a nervous 22-year-old tried to convince a multinational oil giant he was worthy of its millions.

It seemed an appropriate location for the circumstances. The track once was rescued from receivership and resuscitated to motor sports glory by Roger Penske – the same American automobile industry icon whose NASCAR team was now pitching Joey Logano to Shell-Pennzoil as the answer after a volatile 18 months of nonstop PR crises and harried promotional makeovers.

This loomed an even larger reclamation project than rejuvenating a 2-mile speedway, and it wouldn’t be an easy sell.

Shell’s first Sprint Cup driver with Team Penske was Kurt Busch, whose incessant invective on the team radio and multiple meltdowns with the news media caused an unceremonious departure in December 2011. Replacement A.J. Allmendinger didn’t reach the midpoint of the next season before being booted for a positive drug test for amphetamines.

“It was a conversation we had with Joey that, ‘Look you’re driver No. 3, and I’ve learned how to rebrand marketing overnight,’ ” Heidi Massey-Bong, a senior business advisor at Shell, told NBC Sports. “So don’t be that guy. I don’t want to have to do it again, but I’m not going to be afraid to pull the trigger, either, and I’m done with the craziness.”

Logano wasn’t exactly a safe play, either. Penske was asking Shell to take a chance on a former can’t-miss prospect who won only twice during his first four disappointing seasons in Cup.

Over the course of the hourlong meeting in August 2012, a contrite Logano detailed his missteps – by now a familiar refrain for a company twice burned by its drivers’ poor decision-making.

“It was a gamble for them to go with me after everything that was going on,” Logano recently said. “But they’ve been so supportive of everything we’ve done since. It’s been a great sponsor, and it’s been kind of interesting.”

The intrigue has run deep for Shell, which has weathered a fairly dizzying turn of events since shortly before announcing its move to Penske’s organization five years ago last week.

The runner-up in its sweepstakes for choosing a new team was the No. 24 Chevrolet of four-time champion Jeff Gordon, meaning Shell could have been celebrating the farewell tour of a future Hall of Famer this season if not for a chance meeting between old friends in a hallway at Homestead-Miami Speedway that led to Penske.

But there hardly is remorse given how things have worked out with Logano, who turns 25 next month.

READ MORE: Gordon on changing world of NASCAR sponsorships

Last season marked his long-anticipated breakthrough in NASCAR’s premier series, notching six victories and taking the No. 22 Ford to the first championship round of the revamped Chase for the Sprint Cup. He opened the 2015 season with a Daytona 500 victory, bringing smiles to victory lane at Daytona International Speedway among team and sponsor executives who sat stone-faced across from each other in many boardrooms three years ago. Entering Saturday’s SpongeBob SquarePants 400 at Kansas Speedway (where Logano won the most recent race last October), he is ranked fourth in the points standings with eight top-10s in 10 races.

“You’re looking at this young kid, and he’s got his whole career ahead of him,” said Massey-Bong, who has overseen the NASCAR sponsorship since Shell entered Cup in 2007 with Richard Childress Racing. “We can be with him for another 20 years. We’ve got hopefully multiple more Daytona 500-type wins with him and hopefully a championship. We feel like we really hit the home run with him in somebody we can build our brand around long term.”

But Logano arrived only after the team faced “the unspoken third strike,” as Team Penske President Tim Cindric put it, of selecting a new driver.

During the tumultuous 18 months that began the Penske sponsorship, it would have been natural for Shell to question the value of an annual commitment well into eight figures (Sprint Cup teams generally ask at least $18 million per season for a top-line sponsorship, and companies spend as much marketing it).

Zak Brown, founder and CEO of the Just Marketing International agency that handles sponsorships in NASCAR, IndyCar and F1, said morality clauses would have allowed Shell to vacate its Penske contract during the Busch and Allmendinger ordeals, which both generated weeks of negative headlines.

“Sponsors always weigh their options, and I’d imagine there were plenty of conversations about, ‘What do we do here?’ ” Brown told NBC Sports. “Very few teams would have been able to retain Shell.”

So what made it work despite all the headaches?

Good business (the sponsorship essentially pays for itself).

And a good businessman behind it.

“There’s one simple answer as to why Shell stuck through the tough times, and that’s Roger Penske,” Brown said. “There is no better chief relationship officer in motor sports than Roger. He lives on his plane and will treat the Shell petrol station worker in the same manner as he would the CEO. It’s how he gets a tremendous amount of loyalty built up in these massive corporations.

“Through the turbulent times, Roger and his whole organization always provide the confidence they’re going to get it right. It’s why Roger has the ability to retain (sponsors) longer than most. He’s got a great track record.”

With his racing teams having kept some sponsors for more than 30 years while winning 15 Indianapolis 500s and two Daytona 500s, Penske, 78, said the goal is making it last at least that long with Shell.

“That is really at the core of many of our partnerships at Team Penske,” Penske said. “We want to bring all of these companies together, and we want to allow them to build their businesses with each other. Not only is Shell a great partner, but they help us build our business outside of the motorsports world.”

* * *

It was Penske’s reputation for sponsor stability that initially left the team off Shell’s list for a new partner. When the requests for proposals were sent to major Sprint Cup teams, Penske wasn’t included because of a 17-year relationship with ExxonMobil.

Few knew ExxonMobil had informed Penske it couldn’t renew for the full 36 races when its contract ended after the 2010 season. The new proposal would reduce the deal to maybe a dozen races and leave the team with a significant funding hole.

“We couldn’t survive in the same way we were accustomed with that type of program,” Cindric said. “It was going to be a huge change.”

By chance before the 2009 season finale at Homestead, Cindric ran into Ron Schneider, the founder and CEO of the Sport Dimensions agency that handled Shell’s NASCAR sponsorship and the courtship of a new team.

Schneider was involved in Shell’s IndyCar sponsorship in the ’90s with Bobby Rahal’s team, which was then managed by Cindric. There was enough comfort to discuss sensitive information in passing.

“I simply told him, ‘It’s not for everybody to know, but we’re in a position now that we’ve never been in before where we don’t have a solid long-term racing program with an oil and gas company,’ ” Cindric said. “’What’s happening on that front with Shell?’ ”

Schneider was stunned. “On the business side of oil and gas, Roger is the most coveted guy in racing,” he said.

There was a major hurdle, though. Shell wanted a big-name driver, and it already had zeroed in on one of the sport’s best.

A week earlier before the Nov. 15 race at Phoenix International Raceway, major Shell executives were shepherded to a meeting with Gordon on the starting grid.

The four-time series champion already had been involved with Hendrick Motorsports’ official pitch, attending a two-hour meeting with his team’s marketing staff.

“I thought we made a very good presentation, and I thought it was pretty solid, and I felt like we were in the running,” Gordon said. “I left there feeling good.”

Gordon, whose longtime sponsorship with DuPont was one of many well-known NASCAR deals facing a significant downsizing in the wake of the Great Recession, badly wanted the deal partly because he’d rooted as a child for the Pennzoil-sponsored cars of Johnny Rutherford and Rick Mears (driving for Penske) when both went on to win the Indianapolis 500 in the 1980s.

“I felt we put a very solid presentation together,” Gordon, 43, said. “Selfishly, I grew up a huge Johnny Rutherford fan. Watching that Pennzoil car go around Indianapolis, it was one of my favorite cars. So I wanted to be there personally because I wanted to do everything we could. I think it came down to a business decision for them. I think between Hendrick and Penske, they weren’t going to go wrong.”

Penske addressed the need for a driver with results by offering to swap Brad Keselowski, who was struggling through a dismal rookie Cup season in ‘10, into the Miller Lite-sponsored car of Busch, the 2004 series champion who would drive the newly created No. 22 Shell-sponsored entry in ‘11.

Once Shell signed off on that, the decision became a no-brainer based on the breadth of Penske’s business empire, which has more than $20 billion in annual revenue and 44,000 employees worldwide.

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Beyond just slapping logos on Penske’s IndyCar and NASCAR teams, the sponsorship also put Shell’s engine lubricants in the fleets of Penske Truck Leasing, which has more than 200,000 trucks, and the showrooms of Penske Automotive Group, which earned record profits last year and sells a few hundred thousand cars annually.

NASCAR teams often struggle to supply companies with tangible results of their sponsorships, relying on nebulous statistics aimed to measure the value through TV exposure and media impressions.

But the return on Shell’s investment was as easy to quantify as calculating the money generated from sales to Penske’s myriad divisions.

“They’re real numbers,” Cindric said. “You’re talking about millions of gallons. This is real-world stuff.”

With 95 car dealerships across the country in Hendrick Automotive Group, team owner Rick Hendrick could offer a similar arrangement, and he had a sponsorship with Quaker State, a Shell brand.

But Penske Corp.’s reach was greater and global – more than 100 of its 300 dealerships are located outside the United States, and it’s greatly expanded into Australia over the past few years.

Team Penske also could offer an ancillary sponsorship with its IndyCar teams, which allowed Shell more freedom to market its V-power fuels (because of Sunoco’s official NASCAR fuel sponsorship and exclusivity rights, Shell is restricted to promoting its Pennzoil brand at Cup races). IndyCar requires off-the-shelf oil products, putting a focus on consumer marketing, unlike the technology development of NASCAR, which provides harsh conditions for Shell to test the effectiveness of potential components for street cars.

“Not a lot of other platforms have the reach that Roger Penske brings to the table,” said Massey-Bong, who wouldn’t disclose how much Shell makes in selling its products to Penske Corp. “As a global organization, it provides great opportunities for our relationship to continue to grow and expand.”

Quickly to start: From when Cindric and Schneider bumped into each other at Homestead, the deal took roughly five months to complete.

But it faced the threat of implosion nearly as quickly when Penske and Shell hit the track together the following year.

* * *

Though he made the Chase for the Sprint Cup with two victories, the 2011 season wasn’t pleasant for Busch. A vulgarity-filled tirade during a May race at Richmond International Raceway was the first of many high-profile blemishes, including multiple clashes with reporters. When a video of Busch berating ESPN reporter Jerry Punch during the season finale went viral, Penske had had enough and split with the driver.

Allmendinger’s departure was even more sudden. The team learned of his indefinite suspension hours before the green flag on July 7, 2012, at Daytona, forcing a scramble to replace him with Sam Hornish Jr.

“You get the call in the middle of the day that your driver didn’t pass the drug test, it’s hard to prepare yourself for that particular situation, but it makes you stronger as an organization,” Cindric said. “How you manage through that process, every one of us learned something new.

“I think the testament to the strength of the business-to-business relationship was the rocky road we took the first couple of years with Shell. We went through two situations that were very difficult with any sponsor, let alone twice in a short period. We certainly tried their patience, but I think those relationships were much deeper than a simple sponsorship package as you might look at it from an exposure perspective.”

Shell responded to the controversies by pulling back on its national advertising while maintaining its at-track hospitality campaigns.

“It hasn’t been all hunky-dory,” Massey-Bong said. “At same time, Roger is my customer as much as I’m his. That got us through a lot of trying things. We’re partners who were going to see this to the end and do what was right for the Shell brand and Penske brand, so there was never a lot of strife on decisions that needed to be made.

“There was never a question of, ‘Were we going to leave? Is it the right thing for us to be here?’ Racing is very cyclical. You have to ride the wave. We always tried to build our program where it was win-resistant.”

This summer, though, will bring an increase in Shell’s marketing of Logano, who said the company was “really gun-shy when I first signed up, and I don’t blame them. You have to earn their trust a little bit.”

That didn’t take long for Logano, whom Massey-Bong affectionately describes as “an old soul,” to put any fears of misbehavior at ease. The Middletown, Conn., native is a fan of hunting for antiques and the antithesis of a party animal. A wild night for Logano is riding his four-wheeler or crashing on the couch with his wife, Brittany, to watch reruns of Boy Meets World and highlights of old races.

“I’m not the guy who’s going to go crazy,” said Logano, who spent much of his adolescence in the spotlight while becoming the youngest Daytona 500 starter in NASCAR history at 18. “The only thing I am is competitive.”

His fiery side manifested itself quickly at Penske. In his fourth and fifth races, he got into postrace altercations with veterans Denny Hamlin and Tony Stewart – prompting concerns about how Shell might react.

“You started wondering, ‘Oh boy,’ but they were 100 percent on our side,” Logano said. “That’s pretty neat because they went through a lot with having three drivers that quickly.”

Cindric said Logano, who had supplanted Tony Stewart in the Home Depot-sponsored car and muddled through four seasons at Joe Gibbs Racing, “had a genuine appreciation for another opportunity with a top team, and it was a fresh of breath air compared to what we’d been through with (Shell).”

As a gift for making last year’s championship round, the sponsor found an antique Shell sign from the 1930s and installed it in the team’s Mooresville, N.C., shop in January while Logano was on his honeymoon.

At a dinner on the eve of this year’s Daytona 500 with several high-ranking Shell executives visiting from Europe, Logano charmed a group that was accustomed to the detachment of stars in Formula One (where Shell has a longtime sponsorship with Ferrari).

“Off the track, he’s bubbly and very charismatic,” Massey-Bong said of Logano. “You can put him in a room with leadership, and he can hold a conversation about the business. You can put him with a customer, and he can educate them on racing. The whole time, the smile never leaves the face. He’s just so warm.”

Said Penske: “I had a strong belief that Joey could be productive. I am not sure any of us knew how well Joey also could fit in with Shell off the track. But we had the foundation there for a successful combination, and we just needed to put the right driver in that situation.”

It marked another successful Penske turnaround — just like the track where the deal essentially was brokered.

“It was like, ‘Wow, really? Joey Logano?’ ” Massey-Bong recalled with a laugh about the initial meeting in Michigan. “But there is a reason why everything Roger touches turns to gold. He just makes smart decisions.”