Elway unveils another fourth-quarter comeback

(Editor's note: An earlier version of this story was unclear in a reference to the number of John Elway's dealerships sold to Republic Industries in 1997 and now owned by AutoNation.) 

It was looking to the world like National Football League great John Elway was finished, settling into a middle-aged retirement of lush golf courses and tending to his investments.

But how could a guy with a career record of 34 fourth-quarter comebacks ever be finished?

Not only is the 50-year-old former Denver Broncos quarterback back with the Broncos, neck deep in a labor dispute, draft-pick planning and franchise rebuilding. But Elway also is plotting a comeback in the business that got into his blood when he was 29-year-old Broncos No. 7: auto retailing.

His game plan? Open or acquire auto dealerships in and around Denver. But there's a twist: In 1997, Elway sold his six Denver stores to a new publicly traded company called Republic Industries.

That company became AutoNation, now the biggest dealership group in the country. And AutoNation, which still owns Elway's stores, will be Elway's competitor.

It is a bold plan.

While Elway runs the Broncos' football operations, he will operate dealerships under the Elway name through a private investment group. Former AutoNation executive Todd Maul will be in charge of dealership operations.

Elway, Maul and partner Mitch Pierce have one thing in common. They were all big western retailers in the 1980s and 1990s -- Pierce from Tempe, Ariz., and Maul from Denver's multifranchise Chesrown Group -- who were among the first auto dealers to sell out to Republic.

Elway sold his Denver-area stores for a reported $82.5 million in cash and stock, and made it possible for AutoNation to execute its "Mile High" strategy there. AutoNation acquired 17 Denver stores and operated them all under the brand name "Elway."

The Super Bowl champion separately leased his name to AutoNation for nearly a decade to help it take root in Denver.

Now comes the challenge: Elway has his name back. His noncompete clause is long expired. And he wants to invest again in auto dealerships. In Denver.

This has been brewing awhile. Since 2004, Elway and Pierce have owned two Toyota/Scion stores in Manhattan Beach and Ontario, Calif. But it is their Colorado aspirations, under the name Elway Automotive Group, that are gaining attention.

Partners Elway, Maul, Pierce and Indianapolis dealer Fernando Falcon opened their first new dealership in Greeley, Colo., Elway Chrysler-Jeep-Dodge-Ram. The store consists of franchises that Chrysler Group rescinded in its dealer consolidation drive and then were combined in a single new point awarded to Elway. The group now has arranged to buy Burt Chevrolet, a 75-year-old store in Englewood, Colo., near the Broncos headquarters and training camp.

"I always thought I'd be able to get back into this market," Elway says from his office at the Broncos' headquarters in suburban Dove Valley. "I love Denver, and I want to be here. I know the market, and this is where I want to build the business."

But the big difference between the Denver market where he thrived as a young Toyota-Nissan-Honda-Hyundai-Mazda-Ford dealer in the 1990s and the Denver market of 2011 is AutoNation.

Thanks to Elway himself, he and his partners must now contend with a competitor that reported $12.5 billion in revenues last year.

Elway has a history of crawling out of tough spots.

Flash back to Jan. 11, 1987.

It's the Broncos vs. the Cleveland Browns. The Browns are favored and are winning by a touchdown in the game to determine which of the two will go to Super Bowl XXI. Elway finds himself in the tough position of taking possession of the ball on his own 2-yard line after a botched kickoff return, with just more than five minutes on the clock.

Football historians now refer to what happened next as simply "The Drive." Elway ran 15 plays for a 98-yard push to a game-tying touchdown with less than a minute left. A repeat drive in overtime enabled the Broncos to score a field goal and go to the Super Bowl.

Now, in 2011, Elway and his partners believe they have a viable alternative business model to pursue -- a private capital pool ready to buy out dealers in the region who might be ready to sell.

"A lot of people are still under the impression that John still owns all those old Elway stores," Maul notes. "I feel like we're going to be able to compete very effectively."

Elway thinks his name, knowledge of the market and executive team will be a strong combination. He says he has "great respect for AutoNation."

"And you know, I had to ask the question: Do we really want to be in business against these guys? But I believe there is a great opportunity for us."

Maul and Elway say the partnership is focused primarily on acquiring franchises in or close to Denver. But at the Chrysler dealership's grand opening in Greeley late last year, addressing a showroom full of employees, Chrysler representatives, customers and football fans, Elway picked up the microphone and hinted at a larger vision.

"We want to take care of our customers," he told the crowd. "And that's everybody here, as well as everybody in Greeley. Up to Montana and down to Texas -- that's our market."

Maul says other dealerships will follow, but declines to give details.

"I was in charge of 80 dealerships in my last job," he says. "I think I could handle a few more."

Maul's last job was the western regional president for AutoNation. Maul, 52, has been working in dealerships since he graduated from college in Nebraska. After AutoNation bought his Denver employer, he went to work for AutoNation operating the company's big Maroone brand dealerships in South Florida, and then taking over its western stores from an office in California.

At that regional post at AutoNation, it fell to Maul to sit across the table from Elway and be the closer on the group's 2006 negotiations to talk him into renewing the deal to lease his name to the chain.

But Elway declined the terms AutoNation management in Florida was offering. And so it again fell to Maul to start AutoNation's rebranding of all the Denver-area Elway stores to the name "GO" -- as in GO Chrysler and GO Toyota.

Marc Cannon, senior vice president of corporate communications at AutoNation, says the Denver rebranding has been a success. Last year, the renamed Denver group delivered a 17 percent increase in revenues, he reports.

"We're very pleased with our Denver market," Cannon says.

Elway and his partners decline to reveal the size of their investment pool, but Elway says their acquisitions will not rely on debt.

Elway, who looks 10 years younger than his age despite a touch of gray at the temples, has learned since his playing days that a quarterback can get sacked in the business world, too.

After his retirement from professional football and the sell-off of his stores, he invested in upscale laundries and an online sporting goods business that both fizzled. He also tried unsuccessfully to buy the Denver Nuggets basketball team.

And he discussed a more recent financial disaster, one he hasn't talked about publicly.

A year ago, Denver police were summoned to a downtown parking garage where a local 42-year-old investment broker, Sean Mueller, was on a ledge, threatening to jump. It quickly came to light that Mueller had been running a high-level Ponzi scheme with clients' money. A list of 65 investors -- among them Elway and partner Pierce -- had been bilked out of $71 million.

Mueller was taken to jail and pleaded guilty to the investment scam. He was sentenced late last year to 40 years in prison.

"I hope we can learn from that," Elway says of the swindle. "I've never run into a thief like that."

He declines to say how much he lost.

"It's bad any time you lose money, especially when somebody steals it," he says. "It was a setback. Some people did have their life savings in it -- I didn't. I'm always one for diversification. So it was only a small piece."

But was that financial loss what prompted him to get back into auto retailing?

"No, not at all," he says. "This is something I've wanted to do for a long time.

"I believe the automobile business is going to be on an upward trend for years to come. This is where I want to be.

"The restructurings that GM and Chrysler have gone through make the industry stronger now," he says. "And I think we're at the right moment, with the right people and the right game plan to grow with it."