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Michael Waltrip Racing closing because Kauffman couldn't justify his continued investment

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BRISTOL, Tennessee — The decision to close Michael Waltrip Racing boiled down to finances and results.

When the results weren't matching the financial investment Rob Kauffman was making on an annual basis, the co-owner could no longer justify pouring money into the organization.

That's the explanation Kauffman gave Friday for his decision this week to pull out of MWR. He rescued Michael Waltrip during MWR's rocky 2007 debut season, but will shift his money to Chip Ganassi Racing beginning next season.

"Michael Waltrip Racing wouldn't have existed through today without substantial and continued financial support from me," Kauffman said at Bristol Motor Speedway. "From a business standpoint, that didn't make sense any longer. You can't have a top-10 budget and top-10 resources and not be in the top 10 for a sustained period of time.

"It's a performance-related business. It's all about performance. It's a great sport but a very difficult business model. From a business decision, it just made sense to not go forward with that organization, which is not commercially viable."

Kauffman initially said this week only that MWR would not field any full-time entries next year. On Friday, he said MWR would cease operations at the end of the year and Waltrip is trying to sell the shop in Cornelius, North Carolina.

The team struggled out of the gate in 2007 despite strong sponsorship and heavy backing from manufacturer Toyota. But Waltrip was caught with jet fuel in his engine before the season-opening Daytona 500 and it set the tone for a challenging nine years in NASCAR for the two-time Daytona 500 winner in his bid to be a team owner.

MWR has just seven wins in those nine seasons and has not been to victory lane in more than two years. Bowyer contended for the championship in 2012 and was near the top of the standings for most of the 2013 regular season.

PHOTO: Fans sit in the stands during practice for the Food City 300 NASCAR Xfinity Series auto race on Friday, Aug. 21, 2015 in Bristol, Tenn. (AP Photo/Wade Payne)
Fans sit in the stands during practice for the Food City 300 NASCAR Xfinity Series auto race on Friday, Aug. 21, 2015 in Bristol, Tenn. (AP Photo/Wade Payne)

Then the team was accused of having Bowyer intentionally spin in the regular season finale, and the ensuing caution for the Bowyer spin set in motion a series of events that allowed MWR driver Martin Truex Jr. to make the Chase.

Accused by NASCAR of manipulating the finish of the race, MWR was heavily sanctioned and the ramifications were devastating. Longtime sponsor NAPA left at the end of the year and Kauffman was forced to shutter Truex's team. Truex was given his release and has already qualified this year for the Chase with new team Furniture Row Racing. The closing of the team cost MWR 15 percent of its workforce, and the organization has not won a race since.

Bowyer is currently clinging to a spot in the 16-driver Chase, but he's been granted a release from his contract and is looking for work for next year.

He personally doesn't believe the Richmond scandal is still hurting the team.

"It was two years ago," Bowyer said. "Since then, Rob and everybody in management has restructured, reorganized and we are a two-car team. We are not a three-car team. We're a two-car team, which by the way, was fully funded on my car moving forward. It was a business decision by Rob to do this. I am proud to work for MWR and work for Rob. I am happy for that experience."

Kauffman wasn't so certain that the fallout ever ended.

"Certainly that was a pretty heavy body blow to our organization," Kauffman said. "It caused a big restructuring; 2014 was at some level a large reset year for everybody, also (on the) financial (side). As we got into the late spring in 2015, from a performance standpoint, the company wasn't where it needed to be and that kind of forced some decisions and thought processes over the summer."

Kauffman, who made his fortune as one of three co-founders of the hedge fund Fortress Investment Group, is a noted auto enthusiast and reiterated Friday his support of NASCAR. But he's long complained about the business model that is so dependent on sponsorship dollars. When sponsorship falls short or vanishes, the team owner is left with nothing more than equipment.

Kauffman is head of the Race Team Alliance, a group of team owners pushing for cost-saving measures and ways to strengthen their investments into NASCAR. Kauffman supports a franchise model, and doesn't seem to be backing down from trying to get that changed.

"I'm quite optimistic. I think the discussions with the folks at NASCAR around a variety of things in the sport - the competition side, the long-term equity program, those are all initiatives that are well underway and we're working quite hard on those," he said. "So I'm really optimistic we'll make some good progress on those in the next number of months."

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PHOTO: Fans sit in the stands during practice for the Food City 300 NASCAR Xfinity Series auto race on Friday, Aug. 21, 2015 in Bristol, Tenn. (AP Photo/Wade Payne)
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