chop456
09-16-03, 07:56 AM
Bah - who needs fact checkers anyway?
http://www.thecarconnection.com/index.asp?article=6422&sid=247&n=158
It's as close as a racing series wants to come to a near-death experience. But will CART's long freefall and seeming rescue last week be the end of the chaos for what was once a premier racing fraternity?
For those who don't follow the drama surrounding Championship Auto Racing Teams - CART for those who do - the entire year has been an ongoing cliffhanger, with the ever-present threat that the entire racing series would wither away. The drama instigated years back, when Tony George took his toys and left CART to start the IRL - and it was CART left on the ropes, looking for someone to call a ten count.
That was seemingly the case until last week. On September 10, CART announced that it would be bought by Open Wheel Racing Series, LLC - a Hail Mary move that might have been its last chance to live on. CART president Chris Pook admitted as much in announcing the transaction: "This past year has been incredibly difficult. We believe this transaction provides the best value available to stockholders while at the same time making it possible to continue."
CART's new owners, Kevin Kalkhoven and Paul Gentilozzi, profess optimism for its future. "It is our intention that CART will be the premier open wheel racing series of the Americas," they said in a release. "OWRS also believes that the long-term future of open wheel racing will be enhanced by introducing new fans to CART by its collaboration with MotoRock."
But does anyone else believe it can work?
Chaos as usual
Championship Auto Racing Teams' current crises loom huge, but it helps to remember that CART rose out of chaos. From the outset, a band of disgruntled team owners wanted a greater say in how open-wheeled racing was conducted. Among them were U.E. "Pat" Patrick, Carl Haas, and Roger Penske, who formed CART to force reforms on what was USAC (United States Auto Club), the sole sanctioning body in open-wheel, IndyCar racing. On USAC's side stood Indianapolis Motor Speedway owner, Tony George, a staunch supporter of oval track speedways as the venue for open-wheeled racers. In a sense, nothing much has changed, other than some of the players.
Over the years, as friction between CART and the Speedway's iconoclastic owner grew, CART decided their mix of ovals and road courses, big name drivers like the Andrettis, Al Unser, Jr., Emerson Fittipaldi, Danny Sullivan, and even Formula 1 champion Nigel Mansell, could overshadow the biggest single-day sporting event in the world, the Indy 500. So CART staged its own 500-mile event, at the Brooklyn, Mich., track then owned by Penske, offering an even richer purse than that offered at the rival Indy 500.
Incensed at CART, George responded in kind: he formed the Indy Racing League, or IRL, to fight back. Although the IRL had a shaky start, relying on stock block, production-based engines versus the high-tech, turbocharged powerplants favored by CART, George and company continued to pump millions into the series, even though at best they could only fill half the seats in most 'bullrings' where the IRL played. As one IRL driver put it, "All the other IRL races are a 'warm-up' for the Indy 500." CART's inability to capitalize on IRL's weaknesses provided the IRL time to attain parity, and to surge ahead as CART spiraled downward.
Fast forward to the late '90s, when CART team owner/former driver Bobby Rahal assumed the reins of CART after a number of faux pas committed by CART. CART hired high-profile CEOs who had corporate savvy but lacked motorsports experience, or they promoted someone with on-track knowledge who couldn't conduct a PowerPoint presentation to save their life. Worst still, if they did manage to find someone with a balance of the two, CART gave them little autonomy, creating high turnover.
While Rahal quelled the majority of rumblings within CART, the IRL continued to push on, fueled largely by a single power play: if you wanted in the May Classic, then you needed to field an IRL team full-time, or compete for a few open slots not reserved for IRL runners. Rahal's commitment to running his own team, followed by an offer from Ford to revive their Jaguar Formula 1 effort, created the opportunity for another visible CART leader to leave the building.
Pook: last one out?
Touted as one of the most qualified individuals to fill the top slot at CART in the 23-year history of the sanctioning body, Chris Pook was selected by the CART Board of Directors to be president and CEO last December. Pook founded of the Toyota Grand Prix of Long Beach, a CART race second only to the Indy 500 as the biggest open-wheel race in the U.S.
Pook's efforts thus far to revive the moribund CART brand have been best described as a triage nurse in battle: care for what can be saved, and leave the rest to die. The same disciplines and techniques Pook used to build the Long Beach race have been implemented at CART, in what some call too little too late. Appearing at a Motor Press Guild luncheon in Los Angeles, Pook was grilled by the media. Attempting to give CART a more positive spin, Pook said there would be additions to the schedule.
Furthermore, he added, his vision was to keep CART "in market" with races in urban centers as he was successful in doing with Long Beach, "not 40-50 miles outside the market", as he suggested when asked about Mid-Ohio. With Cleveland in market and Mid-Ohio less than two hours away, this is the duplication Pook is hoping to avoid.
Acknowledging CART "treated Tony George like crap, and not with respect which he deserved", Pook commented previously that he was saddened the Indy 500 had "slipped as badly as it slipped", in reference to empty seats and overall lack of enthusiasm that has become prevalent over the last few years for open-wheeled racing.
Is it CART's poor management, IRL's lack of a 'killer instinct' to put CART away, or are open-wheel fans just fed up with both of them?
Where Is CART Going?
Querying members of the racing fraternity to give their assessment of CART, it was as telling what was not said. Alan Larsen, spokesman for Andretti Green Racing, a recent defector to the IRL with Michael Andretti, Dario Franchitti, and Tony Kanaan, first indicated they would respond, and later declined. Michael Townsen, vice president of marketing for Pioneer Electronics, when asked about CART, stated simply, "We are no longer involved in CART." CART board member and Newman-Haas Racing team owner, Carl Haas, did not respond, and Adrian Fernandez, the only owner/driver in CART, also could not be reached.
Team Players/Forsythe Racing owner Gerry Forsythe, with drivers Paul Tracy and Patrick Carpentier, had much to say about the state of CART today. On Pook: "I'm glad he's with CART. He works 70 to 80 hours a week, and he's very passionate about CART. He's turning the organization around, and it's hard to find someone as dedicated as he is."
On the defection of teams: "It's Toyota's and Honda's deep pockets that led to the migration to the IRL. So many teams were being funded by them that it made it difficult to compete. So from our standpoint, I'm glad to see them go."
On the individual drivers: "A lot of them went for the money, when it was this series that made them household names. I'm extremely disappointed that they had no loyalty to this organization."
And on the previous regimes within CART: "Back in the '90s, when CART re-upped with ESPN, our TV contract should have been shopped among the networks, not on cable. At that time, CART had the ratings and the marquee drivers to get a lucrative deal. That's the biggest single mistake I felt CART made that has impacted us today."
Dick Dixon, former Vice President of eCommerce Development of Racesearch.com, where Pook served as Chairman, and part-owner of a Indy 500 winning team, said, "Chris Pook is a talent, a great businessman and a gentleman, but he's two years too late. I appreciate his drive, but even with his abilities, he's hard pressed to succeed. He is capable, but look at the economy as a whole, the low team count, and drivers that are foreign to most, coupled with the spiraling cost of operating teams who can dazzle the paying customer, like Andretti Green Racing, or Team Players/Forsythe Racing. Chris deserves a medal for taking on the challenge. Can CART live on? Only time will tell."
Show 'em the money…any money
On July 22, 2003, CART updated its financials for 2003 and its forecast for 2004. With sponsorship sales lagging, CART lowered its previous expectation for sponsorship sales of $7-$8 million to $6-$7 million. With completion of six of the seven scheduled CBS network races for the year, where the rates CART can charge are higher than those for cable advertising, they still needed to reduce their forecasts down to $2-$3 million for 2003. With the dismal performance of the series, and their reliance on cash reserves to keep them afloat, the outlook for '04 and beyond was projected thusly: "Management does not expect the company to have positive cash flow any earlier than 2006. As announced previously, we are exploring financing and other strategic alternatives that may be available to CART."
On August 18, 2003, CART announced a proposal from Open Wheel Racing Series (OWRS) to acquire all of the outstanding shares of CART. Although CART declined to sign the letter of intent, it engaged in negotiations with OWRS. OWRS is a holding company owned by a group of investors including Gerald R. Forsythe, Kevin Kalkhoven, Paul Gentilozzi, Carl Russo, and Motorock LLC. OWRS currently has ownership of 3,377,400 shares, or approximately 22.9 percent of CART common stock, all shares held by Forsythe or entities owned or controlled by him.
At Denver, Big Bang Productions partner Carl Russo offered his reasons for participating in the CART buyout. "The first goal is to take care of our fans, to strengthen CART, strengthen the show, and to support the fans who have supported the series. If you just let it die, you're going to lose many of them. That's goal No. 1. If we don't do that, all the other goals go away," Russo said.
"The second goal is - well, it's obvious," Russo added. "Everyone wants one series. It's for the good of everyone, the competitors and the fans. I've met with the IRL. I've met Tony George, and spoken to Brian Barnhart at length. They have a strong operation. Indy is the cornerstone of American racing. "I think we should work to build up Indy, not tear it apart. Why disenfranchise one set of fans over the other?"
Reunification of open-wheel racing is not on OWRS's agenda, however. "Carl's a provocative guy and that's his personal statement. That's not a statement for all of us," Gentilozzi was quoted in AutoWeek. "We definitely would love to have one series. But that is not the position of OWRS. When we're ready, we'll put our position in a press release. After we have a deal, we'll release our philosophy."
Russo's remarks also run counter to Paul Newman's passion for and support of CART. One of the most acclaimed actors of our time, Newman has only missed a handful of races in 20 years. Prior to the Denver race, Newman flew in to watch his team perform but also to make them aware of his position in the wake of the news partner Carl Haas was testing an IRL car with the intention of fielding a team at the '04 Indy 500. Newman told reporters he was there to quell any rumors that Newman-Haas was going to the IRL. His dislike for Tony George and disinterest in the IRL is overshadowed by his commitment to CART, of which he said, "CART is still the most challenging and exciting racing in America." Should Haas pursue the IRL deal, he would most likely go at it alone.
Haily Mary
For now, it seems, CART has solved one of its problems: money. On September 10, CART and Open Wheel Racing Series LLC announced the signing of an agreement to acquire CART for cash equivalent to $0.56 per share. The transaction must be approved by stockholders holding a majority of the outstanding shares, and is expected to close towards the end of 2003.
Chris Pook said of the deal: "Management and the Board pursued other alternatives but we believe that there is not any better alternative. We even considered liquidating the company, but concluded that after covering our existing obligations and the liabilities that would be created if CART went out of business there would be less left for our stockholders than in this transaction."
Kalkhoven and Gentilozzi added: "CART has millions of people who come to the races and follow it around the world on television. OWRS intends to fulfill its commitment to these fans by keeping CART in its current format of ovals, road races, and street courses."
But will solving one problem cure CART of its chronic ills? What resolution comes of the acquisition of CART is anyone's guess, but it serves as a reminder that whether you call them IndyCars or Champ Cars, the song remains the same - there's going to be controversy, in-fighting, sponsor and team defections, and even a Chevy that by any other name is a Ford. Now who said open-wheeled racing is boring?
http://www.thecarconnection.com/index.asp?article=6422&sid=247&n=158
It's as close as a racing series wants to come to a near-death experience. But will CART's long freefall and seeming rescue last week be the end of the chaos for what was once a premier racing fraternity?
For those who don't follow the drama surrounding Championship Auto Racing Teams - CART for those who do - the entire year has been an ongoing cliffhanger, with the ever-present threat that the entire racing series would wither away. The drama instigated years back, when Tony George took his toys and left CART to start the IRL - and it was CART left on the ropes, looking for someone to call a ten count.
That was seemingly the case until last week. On September 10, CART announced that it would be bought by Open Wheel Racing Series, LLC - a Hail Mary move that might have been its last chance to live on. CART president Chris Pook admitted as much in announcing the transaction: "This past year has been incredibly difficult. We believe this transaction provides the best value available to stockholders while at the same time making it possible to continue."
CART's new owners, Kevin Kalkhoven and Paul Gentilozzi, profess optimism for its future. "It is our intention that CART will be the premier open wheel racing series of the Americas," they said in a release. "OWRS also believes that the long-term future of open wheel racing will be enhanced by introducing new fans to CART by its collaboration with MotoRock."
But does anyone else believe it can work?
Chaos as usual
Championship Auto Racing Teams' current crises loom huge, but it helps to remember that CART rose out of chaos. From the outset, a band of disgruntled team owners wanted a greater say in how open-wheeled racing was conducted. Among them were U.E. "Pat" Patrick, Carl Haas, and Roger Penske, who formed CART to force reforms on what was USAC (United States Auto Club), the sole sanctioning body in open-wheel, IndyCar racing. On USAC's side stood Indianapolis Motor Speedway owner, Tony George, a staunch supporter of oval track speedways as the venue for open-wheeled racers. In a sense, nothing much has changed, other than some of the players.
Over the years, as friction between CART and the Speedway's iconoclastic owner grew, CART decided their mix of ovals and road courses, big name drivers like the Andrettis, Al Unser, Jr., Emerson Fittipaldi, Danny Sullivan, and even Formula 1 champion Nigel Mansell, could overshadow the biggest single-day sporting event in the world, the Indy 500. So CART staged its own 500-mile event, at the Brooklyn, Mich., track then owned by Penske, offering an even richer purse than that offered at the rival Indy 500.
Incensed at CART, George responded in kind: he formed the Indy Racing League, or IRL, to fight back. Although the IRL had a shaky start, relying on stock block, production-based engines versus the high-tech, turbocharged powerplants favored by CART, George and company continued to pump millions into the series, even though at best they could only fill half the seats in most 'bullrings' where the IRL played. As one IRL driver put it, "All the other IRL races are a 'warm-up' for the Indy 500." CART's inability to capitalize on IRL's weaknesses provided the IRL time to attain parity, and to surge ahead as CART spiraled downward.
Fast forward to the late '90s, when CART team owner/former driver Bobby Rahal assumed the reins of CART after a number of faux pas committed by CART. CART hired high-profile CEOs who had corporate savvy but lacked motorsports experience, or they promoted someone with on-track knowledge who couldn't conduct a PowerPoint presentation to save their life. Worst still, if they did manage to find someone with a balance of the two, CART gave them little autonomy, creating high turnover.
While Rahal quelled the majority of rumblings within CART, the IRL continued to push on, fueled largely by a single power play: if you wanted in the May Classic, then you needed to field an IRL team full-time, or compete for a few open slots not reserved for IRL runners. Rahal's commitment to running his own team, followed by an offer from Ford to revive their Jaguar Formula 1 effort, created the opportunity for another visible CART leader to leave the building.
Pook: last one out?
Touted as one of the most qualified individuals to fill the top slot at CART in the 23-year history of the sanctioning body, Chris Pook was selected by the CART Board of Directors to be president and CEO last December. Pook founded of the Toyota Grand Prix of Long Beach, a CART race second only to the Indy 500 as the biggest open-wheel race in the U.S.
Pook's efforts thus far to revive the moribund CART brand have been best described as a triage nurse in battle: care for what can be saved, and leave the rest to die. The same disciplines and techniques Pook used to build the Long Beach race have been implemented at CART, in what some call too little too late. Appearing at a Motor Press Guild luncheon in Los Angeles, Pook was grilled by the media. Attempting to give CART a more positive spin, Pook said there would be additions to the schedule.
Furthermore, he added, his vision was to keep CART "in market" with races in urban centers as he was successful in doing with Long Beach, "not 40-50 miles outside the market", as he suggested when asked about Mid-Ohio. With Cleveland in market and Mid-Ohio less than two hours away, this is the duplication Pook is hoping to avoid.
Acknowledging CART "treated Tony George like crap, and not with respect which he deserved", Pook commented previously that he was saddened the Indy 500 had "slipped as badly as it slipped", in reference to empty seats and overall lack of enthusiasm that has become prevalent over the last few years for open-wheeled racing.
Is it CART's poor management, IRL's lack of a 'killer instinct' to put CART away, or are open-wheel fans just fed up with both of them?
Where Is CART Going?
Querying members of the racing fraternity to give their assessment of CART, it was as telling what was not said. Alan Larsen, spokesman for Andretti Green Racing, a recent defector to the IRL with Michael Andretti, Dario Franchitti, and Tony Kanaan, first indicated they would respond, and later declined. Michael Townsen, vice president of marketing for Pioneer Electronics, when asked about CART, stated simply, "We are no longer involved in CART." CART board member and Newman-Haas Racing team owner, Carl Haas, did not respond, and Adrian Fernandez, the only owner/driver in CART, also could not be reached.
Team Players/Forsythe Racing owner Gerry Forsythe, with drivers Paul Tracy and Patrick Carpentier, had much to say about the state of CART today. On Pook: "I'm glad he's with CART. He works 70 to 80 hours a week, and he's very passionate about CART. He's turning the organization around, and it's hard to find someone as dedicated as he is."
On the defection of teams: "It's Toyota's and Honda's deep pockets that led to the migration to the IRL. So many teams were being funded by them that it made it difficult to compete. So from our standpoint, I'm glad to see them go."
On the individual drivers: "A lot of them went for the money, when it was this series that made them household names. I'm extremely disappointed that they had no loyalty to this organization."
And on the previous regimes within CART: "Back in the '90s, when CART re-upped with ESPN, our TV contract should have been shopped among the networks, not on cable. At that time, CART had the ratings and the marquee drivers to get a lucrative deal. That's the biggest single mistake I felt CART made that has impacted us today."
Dick Dixon, former Vice President of eCommerce Development of Racesearch.com, where Pook served as Chairman, and part-owner of a Indy 500 winning team, said, "Chris Pook is a talent, a great businessman and a gentleman, but he's two years too late. I appreciate his drive, but even with his abilities, he's hard pressed to succeed. He is capable, but look at the economy as a whole, the low team count, and drivers that are foreign to most, coupled with the spiraling cost of operating teams who can dazzle the paying customer, like Andretti Green Racing, or Team Players/Forsythe Racing. Chris deserves a medal for taking on the challenge. Can CART live on? Only time will tell."
Show 'em the money…any money
On July 22, 2003, CART updated its financials for 2003 and its forecast for 2004. With sponsorship sales lagging, CART lowered its previous expectation for sponsorship sales of $7-$8 million to $6-$7 million. With completion of six of the seven scheduled CBS network races for the year, where the rates CART can charge are higher than those for cable advertising, they still needed to reduce their forecasts down to $2-$3 million for 2003. With the dismal performance of the series, and their reliance on cash reserves to keep them afloat, the outlook for '04 and beyond was projected thusly: "Management does not expect the company to have positive cash flow any earlier than 2006. As announced previously, we are exploring financing and other strategic alternatives that may be available to CART."
On August 18, 2003, CART announced a proposal from Open Wheel Racing Series (OWRS) to acquire all of the outstanding shares of CART. Although CART declined to sign the letter of intent, it engaged in negotiations with OWRS. OWRS is a holding company owned by a group of investors including Gerald R. Forsythe, Kevin Kalkhoven, Paul Gentilozzi, Carl Russo, and Motorock LLC. OWRS currently has ownership of 3,377,400 shares, or approximately 22.9 percent of CART common stock, all shares held by Forsythe or entities owned or controlled by him.
At Denver, Big Bang Productions partner Carl Russo offered his reasons for participating in the CART buyout. "The first goal is to take care of our fans, to strengthen CART, strengthen the show, and to support the fans who have supported the series. If you just let it die, you're going to lose many of them. That's goal No. 1. If we don't do that, all the other goals go away," Russo said.
"The second goal is - well, it's obvious," Russo added. "Everyone wants one series. It's for the good of everyone, the competitors and the fans. I've met with the IRL. I've met Tony George, and spoken to Brian Barnhart at length. They have a strong operation. Indy is the cornerstone of American racing. "I think we should work to build up Indy, not tear it apart. Why disenfranchise one set of fans over the other?"
Reunification of open-wheel racing is not on OWRS's agenda, however. "Carl's a provocative guy and that's his personal statement. That's not a statement for all of us," Gentilozzi was quoted in AutoWeek. "We definitely would love to have one series. But that is not the position of OWRS. When we're ready, we'll put our position in a press release. After we have a deal, we'll release our philosophy."
Russo's remarks also run counter to Paul Newman's passion for and support of CART. One of the most acclaimed actors of our time, Newman has only missed a handful of races in 20 years. Prior to the Denver race, Newman flew in to watch his team perform but also to make them aware of his position in the wake of the news partner Carl Haas was testing an IRL car with the intention of fielding a team at the '04 Indy 500. Newman told reporters he was there to quell any rumors that Newman-Haas was going to the IRL. His dislike for Tony George and disinterest in the IRL is overshadowed by his commitment to CART, of which he said, "CART is still the most challenging and exciting racing in America." Should Haas pursue the IRL deal, he would most likely go at it alone.
Haily Mary
For now, it seems, CART has solved one of its problems: money. On September 10, CART and Open Wheel Racing Series LLC announced the signing of an agreement to acquire CART for cash equivalent to $0.56 per share. The transaction must be approved by stockholders holding a majority of the outstanding shares, and is expected to close towards the end of 2003.
Chris Pook said of the deal: "Management and the Board pursued other alternatives but we believe that there is not any better alternative. We even considered liquidating the company, but concluded that after covering our existing obligations and the liabilities that would be created if CART went out of business there would be less left for our stockholders than in this transaction."
Kalkhoven and Gentilozzi added: "CART has millions of people who come to the races and follow it around the world on television. OWRS intends to fulfill its commitment to these fans by keeping CART in its current format of ovals, road races, and street courses."
But will solving one problem cure CART of its chronic ills? What resolution comes of the acquisition of CART is anyone's guess, but it serves as a reminder that whether you call them IndyCars or Champ Cars, the song remains the same - there's going to be controversy, in-fighting, sponsor and team defections, and even a Chevy that by any other name is a Ford. Now who said open-wheeled racing is boring?