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CART optimistic despite decline

The series, slated to run in St. Petersburg in 2003, has lost engines, teams, stock value and prestige.

By BRUCE LOWITT, Times Staff Writer
© St. Petersburg Times
published June 29, 2002

Depending on your viewpoint, Championship Auto Racing Teams is an open-wheel series heading downhill and picking up speed, a potential 20-car pileup, or emerging from dangerous curves and debris and accelerating toward its own checkered flag.

Chris Pook, CART's president and CEO since Dec.19, is a British-born entrepreneur steering the 23-year-old organization against the newer Indy Racing League. He took the wheel in December in what has become a long and torturous race. Some observers think CART's wheels are close to coming off but Pook sees it gaining strength on an unobstructed straightaway.

He has history going for him. In 1975 Pook created the Long Beach Grand Prix, the first successful American street race. Measured by attendance, it is second only to the Indianapolis 500 in popularity in U.S. open-wheel racing.

The St.Petersburg Grand Prix is scheduled to open CART's 2003 season in February. Pook conceived of this race as well.

At the moment, though, he is trying to jump-start and fine-tune CART, a circuit of street races, road courses and ovals that seems to be riding in the turbulent wake of the oval-only IRL, perhaps even careening toward the scrap heap of failed racing organizations.

Here's what is broadsiding CART:

Losing big-name teams. Roger Penske, owner of open-wheel racing's most dominant North American team, left for the IRL this year.

Losing engine makers. Honda announced it will quit CART after this season, and Toyota will go after 2003. Each will build engines for the IRL next year.

Few big-name drivers. Most have gone into retirement or to the IRL and other racing circuits.

No Indy 500. It is the IRL's diamond in a circuit of cubic zirconias. CART has no crown jewel.

Less favorable television contracts. ABC is paying to broadcast 10 IRL races this year. CART is paying CBS to televise seven of its events.

Sponsors are harder to find. With nine of its 19 races outside the United States (four overseas) CART can't rely on U.S.-based products and services to sponsor foreign-based races.

Devalued stock: CART went public March 10, 1998 (MPH on the NYSE), opening at $19 a share. It was $35.63 on June 8, 1999. Friday it closed at $9.85.

"The economics of the sport are such that I think CART is going to have a difficult time surviving," said Chris Economaki, editor of National Speed Sport News and longtime television racing analyst.

And Glen Reid, a securities analyst with Bear Stearns, a brokerage firm, said: "The stock price is the consensus of the investment community ... and most people right now are betting that the company will not survive."

Gerald Forsythe is co-owner of Player's/Forsythe Racing and CART's biggest stockholder with about 2.4-million shares (14.6 percent). "I can assure you that now is a great buying opportunity for CART," Forsythe said. "I wouldn't be continually buying the stock if I didn't believe that."

'I can see the trend'

Penske, one of CART's founders, entered the 2001 Indy 500. His drivers, Helio Castroneves and Gil de Ferran, were 1-2 in a parade of CART-backed cars that finished in the top five spots.

At the behest of sponsor Marlboro, Penske quit CART and switched this season to the IRL with Castroneves winning Indy again. That could presage more defections after this season, starting with Chip Ganassi Racing.

"Let's just say I can see the trend," Ganassi said, broadly hinting his plans for 2003. "There seem to be more people going from CART to IRL than there are from IRL to CART."

Team Green (with drivers Michael Andretti, Dario Franchitti and Indy 500 runnerup Paul Tracy) and Mo Nunn Racing (Felipe Giaffone and Tony Kanaan) are powered by Honda. When Honda goes to the IRL, teams and drivers almost certainly will follow. Nunn already has moved half his CART team to the IRL.

When the IRL was formed and required teams to race specific chassis and engines on its circuit, including the Indy 500, CART boycotted the race. "When we lost Indy, we lost 50 percent of our fan base," Michael Andretti said.

CART, which routinely filled the 33 spots in the Indy 500 starting grid before the IRL formed, now holds events with 20 or fewer cars. Further, all but three of CART's drivers -- Andretti, Jimmy Vasser and Townsend Bell -- are foreign-born.

"That affects attendance," Economaki said. "People like to cheer for drivers they've seen racing, somebody they know. Years ago, hundreds of thousands of fans from short tracks in the east watched Mario (Andretti) work his way to Indy, and busloads of them went there and to other big races where he raced. Drivers in CART now don't have a fan base."

Pook points to CART drivers' finishes at Indy and predicts, "We'll build our own (fan base). We will have new teams and they will have the best drivers." He offered no details.

Less bang for the buck

According to caranddriver.com, CART will pay CBS $235,000 per hour to air seven of its races, then sell commercial time. CART said the break-even price, if it can sell all 50 half-minute ads in each 2-1/2-hour race, is $20,000 per ad.

CART also is getting "less bang for the buck" because of its switch "from pretty heavily based ABC and ESPN package to Speed Channel with some CBS thrown in," said Eric Wright, vice president of research and development at Joyce Julius and Associates, which researches the benefits to companies sponsoring televised events. "(CART is) certainly going to draw less domestic viewers." And that, Wright said, has a direct impact on the kind and number of sponsors attracted to CART.

Pook said he expects dramatic changes, citing the history of Fox, which bought Speed Channel. "When Rupert Murdoch started the network people said it was impossible to compete with ABC, NBC and CBS. ... Today, Fox is the leader in sports on television," he said. "Then they started Fox News and everybody said it was impossible to compete with CNN and MSNBC. He blew them both out of the water.

"Now he has acquired Speedvision (renamed Speed Channel). In the first six months he took it from 36-million homes to 52-million homes. He's targeting 60-million by the end of the year and 75-million by the end of 2003. ... We've aligned ourselves with what we consider the most successful broadcast media company in the world," Pook said.

CART's overseas races will be televised live at odd hours in the United States (Australia, midnight; Germany, 7:30 a.m. and England, 8:30 a.m.; Japan's was tape-delayed). The April27 race at the Honda-built Twin Ring Motegi track in Japan was CART's last there. The IRL will stage its first non-U.S. race there next year.

"CART's situation does not inspire confidence," Wright said. "It has to find sponsors that can benefit from international broadcasts. It can't look at U.S.-based products; it has to look more at global products."

Exactly, Pook said. "We're not interested in being just a domestic series and chasing just after totally domestic sponsors. We're positioning ourselves as a multinational company. That's a unique quality we have and we can use."

As for next season, supporters of the St. Petersburg Grand Prix envision world-class drivers wheeling past backdrops of glistening beachfront water and the downtown skyline. Said Pook, wearing his best rose-colored glasses: "We have every reason to believe this will be one of the most successful races, if not one of the most romantic, on our schedule."

-- Information from other news organizations was used in this report.

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