LEAGUE CITY — Group 1 Automotive said this week it had acquired troubled New York Yankees slugger Alex Rodriguez’s Mercedes-Benz dealership, 500 Interstate 45.
Publicly traded Group 1 (NYSE: GPI) declined to disclose the purchase price of the dealership it estimates will generate $85 million in yearly revenues. Group 1 will change the dealership’s name from Alex Rodriguez Mercedes-Benz to Mercedes-Benz of Clear Lake.
Rodriguez, known as A-Rod, was on top of his game in 2005 when he opened the $6 million dealership. He was one of the most highly compensated players after signing a staggering 10-year, $252 million contract in 2001 with the Texas Rangers as a shortstop. In 2004, he was traded to the New York Yankees. Texas paid $67 million of the $179 million left on Rodriguez’s record contract.
When he announced plans for the dealership, he was widely considered the best player in baseball.
But as he sells his League City dealership, Rodriguez’s image is tainted by accusations of using performance enhancing drugs.
Earlier this year, he was hit with a 162-game suspension for allegedly using steroids. In early January, on the day his attorneys filed lawsuits against Major League Baseball Commissioner Bud Selig and the players’ union over the season-long suspension, he visited the League City dealership for a VIP customer event, according to reports. He withdrew the lawsuits in February.
Until Rodriguez rolled in, Galveston County didn’t have a Mercedes-Benz presence. He was the majority owner of the dealership, which also includes the Mercedes Sprinter commercial vehicle franchise. Rodriguez partnered with Mercedes-Benz industry veteran Jerry Glauser in the League City venture.
Group 1 representatives said Thursday the removal of Rodriguez’s name from the dealership had nothing to do with the third baseman’s troubles, rather it was in line with the naming of its area dealerships — Advantage BMW of Clear Lake and Lexus of Clear Lake.
Group 1 owns and operates 151 dealerships, 192 franchises and 37 collision centers in the United States, United Kingdom and Brazil, offering 34 brands of automobiles.
Despite bad winter weather that put a dent in car sales industry-wide, Group 1 on April 24 announced first quarter earnings of $31.3 million, a 7.1 percent increase from the same period a year ago. Total revenue increased 15.1 percent to $2.3 billion; total gross profit grew 12.5 percent to $338.1 million.
“Despite a difficult start to the year due to significant weather disruption, we were able to achieve respectable financial results for the quarter due to a very strong performance in March,” Earl J. Hesterberg, Group 1’s president and CEO, said. “Our March results were driven by record performance in our U.K. operations and extremely strong vehicle sales in the U.S., especially in Texas and Oklahoma.”