““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
When Chip Ganassi was five, his father gave him and his cousins a number of go-karts he had confiscated from the owner of a go-kart track who had failed to pay his bill after the elder Ganassi had paved the track. That early experience led the young Ganassi to high school dirt-bike motocross contests, motorcycle racing and, eventually, professional auto racing. He competed in the Indianapolis 500 five times between 1982 and 1986 before transitioning into the owner/management side of the business.
Today, Chip Ganassi steers a nearly $100 million auto-racing empire and Sports Illustrated ranks him among the most powerful men in motorsports. In 2008, Team Ganassi enjoyed its best year ever, taking the Grand-Am Series Championship and its prestigious Rolex 24 at Daytona, and highlighted by driver Scott Dixon's winning the IndyCar Series and its crown jewel: the Indianapolis 500. Ganassi also merged his NASCAR operations with those of Dale Earnhardt Inc., one of the sport's most recognizable names.
A Pittsburgh native, Ganassi attended local Duquesne University and still resides in the Steel City, where he maintains his corporate offices. But he doesn't spend much time there. Making heavy use of a Learjet 45 (delivered on his 45th birthday) and other airplanes, he flies to racing hotbeds in Charlotte, N.C., and Indianapolis, as well as to numerous races across the country. His operation also employs three other aircraft to ferry crew from venue to venue on the IndyCar, NASCAR and Grand-Am racing circuits.
When you graduated from college in 1982 did you plan a career in auto racing?
No, I was going to go into our family businesses, but I just couldn't get racing out of my system. I entered the sport at a time when it was becoming a business and I was fortunate to be on the leading edge of that trend.
What led you to go from driving to the business side of the sport?
I was getting older and my family background and college education were in business. I always looked at the business model of things.
Do you still drive?
No. I think there was a time and place for that, and while I certainly enjoyed that time in my life, I'm past it.
Is it common for race team owners to be involved in several race platforms?
Most owners are just in one segment-Indy cars, NASCAR or sports cars. I guess I'm like the gambling addict who doesn't care if it's the blackjack table or the horses. I like the action of racing in whatever form that takes.
What led you to use business aircraft?
In the early '90s, people in the racing business were beginning to use business aircraft. In those days we were probably doing 12 or 15 races a year and I didn't really see a need for it, but as I began to get older I spoke with Mario Andretti, who was a big mentor of mine early in my career, and he talked to me about the use of business aircraft. So I started getting my toe in the water. It was around the beginning of '95 when I acquired my first aircraft, a Lear 24.
Prior to that it was $100,000 a year in commercial air travel, often running through airports trying to make flights, spending a lot of extra nights on the road. I spent a lot of Sunday evenings in not-so-glamorous places trying to get home, and there were a lot of red-eye flights.
You've owned other jets before the Learjet 45. How long do you plan to hold onto this one?
Prior to the Lear 45 I had a Lear 31, and prior to that the 24. I've had [the 45] for five years. I just put money down on a Learjet 85. I expect to take delivery of it in 2013. What I am trying to figure out is if I want to go to a [Learjet] 60 before that. You certainly can stand up in it and it's got a little more performance, but it's just not as sexy as a 45.
It's said that you use your aircraft like other people use their cars. What is a typical week like for you?
Usually on Tuesdays I'm in Charlotte or Indianapolis for the day. Then on Thursday or Friday I'm off to a race. If I have meetings at Target-our main sponsor-that's usually on a Wednesday or Thursday. And then on the weekends, about 40 a year, I'm usually off to a race. We've averaged between 450 and 490 flight hours a year for the last five years.
What about personal travel?
I do so much business travel that a lot of my personal travel is tied into a business trip. I probably use the jet [solely for personal trips] only about twice a year.
It sounds as if your operation couldn't function without private air transportation.
We transport more people on the weekends and have more away games than an NFL team-an NFL team has only half its games away. We have 34 NASCAR races away and IndyCar has 18 away, and sports cars are all away games. That's where our corporate aircraft come into play. [Without them] we wouldn't be as nimble and competitive. With a jet you can be at somebody's desk in a few hours and when you are dealing with a lot of high-level decision-makers, it's great to be face to face.
What other benefits do you derive from business jet ownership?
Certainly you get home sooner, you can leave later and you can accomplish more in one day. You can get up in the morning, go to the West Coast, turn around and come back that evening. I've done that a bunch of times. You can have two or three meetings in a day in two or three towns very easily. We often are in three, sometimes four races a weekend, so we'll use the jet to transport seven or eight people to a race.
What moments do you remember the most in your auto-racing career?
This past year, obviously, winning the Indianapolis 500 for the third time. The first time I ever drove at the Indianapolis Motor Speedway and the first time I qualified for the Indianapolis 500 at age 23-those moments stand out.
Your racing teams are having their best season ever. Does your strategy change depending on the racing circuit?
The hardest thing to do in business when you have a good strategy is to keep the same strategy. People always want to tell you that you need to do this and you need to do that, but when you have a successful model you want to keep it. We have a strategy that works and we're staying with it until it becomes antiquated-and I don't see that happening.
You seem to have a keen eye for driving talent. What do you look for in a driver?
It's easy to look at statistics only, but I think you need to dig further. What we look for first is heart. I want to know what a driver's life is outside of sports because that tells a lot about a person. You look at history and upbringing. You want a driver to have a solid foundation to stand on so they have confidence when some blogger or media person takes a shot at their performance. We want someone who can maintain a smooth disposition over a particularly rocky period.
Which is more important for racing success-the car or the driver?
It depends on the moment. I can tell you this: when you win it's always because you had a great driver, and when you lose it's because you had a bad car. But it takes a great team to make a winning organization.
How important is the corporate sponsorship?
Without sponsorship, we go away. We used to be a three-car stock-car team and we had a lack of sponsorship for the third car so we closed that down this past June. We shuttered about one seventh of our business.
What do you do when you're not managing race teams?
I enjoy time with my daughter. I like to ski. But I enjoy what I do for a living, so when I'm not doing it, I'm [usually] either sleeping or heading for the next race. I enjoy this business a lot, so in a way it's my country club, my girlfriend, my cigarettes and my social drink all gathered up in one.
Name: Chip Ganassi
Occupation: Racing team owner and manager
Transportation: Learjet 45, Beechcraft King Air 200, Dornier 328, Embraer 145
Personal: Lives in Pittsburgh. Divorced. Has11-year-old daughter.