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Editorial

Taking it to the streets

Why Miami's a war zone

 by Commando Cody
September 26, 2002

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[Note: The opinions stated here are those of the author and do not necessarily reflect those of AutoRacing1.com]

IRL, NASCAR, CART, Formula One. When "The Captain" talks motorsports, people listen. That was the case when motorsports mogul Roger Penske, 65, sat down last Saturday (Sept. 14) with a group of sports journalists for a free-wheeling interview. Penske is tight-lipped but read between the lines and he'll tell you everything:

Question: "You recently predicted that there would be one domestic open-wheel series within 18 months. You want to revise that?"

Penske: "From my perspective, I think we need one open-wheel series. I said 18 to 24 months ... and I would still say this. Obviously, CART has got capital in the bank. Chris Pook [CART president/CEO] is a very savvy guy. They've got a real strong CEO. The issue is, is the market bigger than what he can control? It's the fans. It's the emotion. At the end of the day, you've got to build a series that will have identity. And we've got to build the stars. That's what NASCAR's done."

Penske is unconsciously projecting his own concerns when he states that "the issue is, is the market bigger than what he can control?" This most certainly doesn't apply to Pook, a man who is barely hanging on by his fingernails to his shrinking race schedule and his embattled series.

BATTLE STATIONS

Christopher Robin Pook is engaged in a classic guerrilla war (Spanish for "little war"). Ever since taking the helm of Championship Auto Racing Teams late last year, he has been battling the combined might of the nation's oval-track conglomerates who appear hell bent on the destruction of his beleaguered racing series and its replacement with an open-wheel racing league of their own. One by one, the oval-track venues his Champ Car series used to race on have been denied him, forcing him to literally take his brand of exotic, high-powered formula car racing to the streets.

The forces arrayed against Pook's increasingly irregular force of gypsy road-racers are beyond formidable (note - there's competition for market share in any business and auto racing is no different).

International Speedway Corporation, headquartered in Daytona Beach, Florida, is the largest promoter of motorsports activities in the United States, currently promoting more than 100 events nationwide. The conglomerate, which annually brings in $525 million, currently owns or operates 12 major U.S. tracks with an ownership interest in at least two others. In addition to motorsports facilities, ISC also owns and operates MRN, the nation's largest independent sports radio network (with 650 affiliated stations in 48 states); Daytona USA, the "Ultimate Motorsports Attraction" in Daytona Beach, Florida and the official attraction of NASCAR; Americrown Service Corporation, a provider of catering services, food and beverage concessions, and merchandise sales; and Motorsports International, a producer and marketer of motorsports-related merchandise. Majority owned and controlled by the family dynasty of William France, Sr., sons William, Jr. and James, ISC controls NASCAR, the most popular form of motorsport in the America.

Founded and managed by O. Bruton Smith, Speedway Motorsports, Inc. is the second leading marketer and promoter of motorsports entertainment in America. The company owns and operates six premiere track facilities. The company provides souvenir merchandising services through its SMI Properties subsidiary, and manufactures and distributes smaller-scale, modified racing cars through its 600 Racing subsidiary. The company also owns Performance Racing Network which broadcasts syndicated motorsports programming to over 750 stations nationwide. SMI's annual revenues are approximately $376 million. Debuting on Wall Street in February 1995, Speedway Motorsports, Inc., became the first motorsports company to be publicly traded on the New York Stock Exchange.

Anton H. "Tony" George, is president and chief executive officer of the Indianapolis Motor Speedway, home since 1911 to the largest single-day sporting event in the world, the Indianapolis 500. George represents the third generation of IMS ownership by the Hulman family of Terre Haute, Indiana. In 1994, George created the Indy Racing League "to preserve the traditions and excitement of America's open-wheel oval racing." Centered around the Indianapolis 500, the IRL campaigns in 15 oval races across the country and is the series that the American oval track owners would like to see replace Pook's CART. An aggressive program of expansion and investment has marked George's tenure as IMS president and CEO including extensive reconstruction and redesign of various track components. Each year, the track plays host to the Indianapolis 500, once the world's best-attended race. In 1994, George brought the NASCAR Winston Cup Series to the Indianapolis Motor Speedway for the annual Brickyard 400 event, the world's second biggest race.

There are other oval track owning companies in the country, including Dover Downs Motorsports, Inc., where Chris Pook worked before he took the helm of CART, but they are minute in comparison to just ISC. Name a major speedway in the U.S. and it's a sure bet that either ISC and/or SMI owns, controls, manages or influences the facility. In large measure, this is because the France family, Penske, and ISC control NASCAR and determine where and when any one of its immensely profitable series will run. Five years ago, before NASCAR's popularity soared to the stratospheric heights it enjoys today, a Wall Street analyst stated that a Winston Cup race date was worth an instantaneous $10 million to any venue lucky enough to get one. That figure has undoubtedly grown much larger today.

ISC is a public company with a difference. Its annual report notes that the company's financial structure is such that the France family holdings, approximately 60%, are weighted in favor of their control of the corporation--even if the percentage of their ownership should be significantly reduced. The annual report also states that it can be expected that "conflicts of interest" might arise with regard to the Frances and their granting of NASCAR rights. Thus, while several suitable speedways owned by small independents clamor for their first NASCAR race, tracks owned or operated by ISC and SMI are host to multiple events.

As much as anything, this is a reason for the conglomerates' attempt to destroy CART and elevate the status of the IRL. ISC et al are skating on thin ice with regard to anti-trust violations. NASCAR's calendar is full and there is no longer room for expansion. A prima facie case can be made that ISC and SMI are engaging in monopolistic practices in the meting out of NASCAR race dates and should share one of two "double header" NASCAR races with the independents. ISC and SMI, needless to say, are more than reluctant to do so. Thus, if they could arrange for a NASCAR surrogate, no matter how profitable, to be offered to the small operators, they could retain all their NASCAR races while maintaining that a competitive market situation exists. Listen to the ISC-influenced motorsports media extol the praises of Tony George's IRL and it is always with reference to the benefits it might provide to tracks OTHER than those owned by the conglomerate(s).

For this stratagem to work, the IRL must be at least marginally profitable. George himself recently estimated that it has cost him at least $250 million out of pocket to establish and sustain his series over the past seven years. The figure is likely to have been understated. Furthermore, while things are definitely looking up for the IRL as of late, there is still no convincing evidence that the IRL has yet to turn a profit. George is in much the same situation with regard to his IRL as ISC is with NASCAR. The only indisputably profitable race in the series is the Indy 500 and George is not likely to share its proceeds with the other track owners holding sparsely-attended IRL races. So, the IRL must grow in order to meet the many needs of its backers and, until recently, it has found that nearly impossible to do with competition from Pook's CART series.

Ergo, Pook's series must cease to exist. There is ample circumstantial evidence to indicate that an organized and funded effort was undertaken to kill CART before the start of its 2002 season. As a public corporation, CART was exquisitely vulnerable to the destructive insider manipulations which crippled the once-thriving race sanctioning body. Forces to which the essentially private Penske and France corporations were immune. As we speak, CART is reeling dangerously close to the brink of extinction brought about by corporate sabotage, the carefully orchestrated defections of several of its top teams, drivers, manufacturers and sponsors, and an unremitting media assault unprecedented in the annals of American motorsports.

The fact that CART is still standing is a miracle. One that is owed to two factors, both mentioned by Roger Penske in his opening interview: Chris Pook and CART's money in the bank.

DEATH OF A 1000 CUTS

In December 2001, the future of the series could probably have been numbered in days. That's when Chris Pook, creator of the Long Beach Grand Prix and a pioneer in the promotion of street race events, took charge of CART and the defensive guerrilla war that it is fighting for its very existence. Like its military counterparts, CART's campaign is being waged against a vastly larger and better-equipped entrenched force. In keeping with the nature of its struggle, CART has taken the issue to the streets of the Americas, avoiding open battle as much as possible, and exploiting the mobility gained from its lack of fixed infrastructure. To be successful, i.e. to survive, the embattled series must have a wide degree of popular support. In this one regard, CART is winning. While its adversaries have contrived to limit CART's access to traditional electronic and print media outlets, its street "events" have been met with the enthusiastic support of hundreds of thousands of spectators and fans.

It has become abundantly clear that if the oval track allies are to defeat CART, barring sudden collapse, they will have to bleed the series to death financially. In this, they have all the traditional advantages of a ruthless, centralized power accustomed to wielding absolute political and financial authority. In predicting a time limit for CART's demise, 18 to 24 months, Roger Penske has set the clock in motion toward the final conflict. One's guess is that CART's opponents have their eye on some critical figure below CART's $140 million capital reserves at which losses will trigger a call (issued no doubt by the conglomerate's institutional operatives) for the dissolution of the company.

In their end game, the key is to continue to drain CART of capital while preventing it from replenishing its reserves. If they can do that, then as the old adage goes, "if your outgo exceeds your income, your upkeep will be your downfall." In this deadly game, all the players on the other side hold an advantage because they all possess cash cows which constantly renew their war chest while CART is required to bring in income primarily from its events, which the conglomerates can interfere with.

Several weeks ago, the media controlled or influenced by the conglomerates signaled a tentative peace proposal. Essentially, the message sent to Pook and his lieutenants was that if CART would abandon the oval tracks to the IRL (almost a fait accompli already) and concentrate its efforts on its highly successful street and road course events, that there was "room enough for two open-wheel series to co-exist." In other words, retreat and cease hostilities and we'll call off the dogs. For the beleaguered series, especially battered by the events of the past few weeks, the offer seems tempting. But, is it for real?

In a word, no. The "Daytona Cartel" and its partners have already all but driven CART from its territory. Why, then, in return for something they already possess--an oval track hegemony--would the conglomerates cease their attack? The answer is to get CART to cease its resistance long enough for ISC's assassins to strike a final death blow.

Pook has already had experience with the conglomerates' peace proposals. Soon after his arrival at CART's Michigan headquarters he was approached by factions within CART who represented that an accommodation with the IRL was close at hand which would allow the two warring series to co-exist, if not come together as a unified series for the first time since they bifurcated in 1995. All that was required was for CART to remake itself in the image of its rival and, then, its opposite number would graciously consent to bury the hatchet. Over the strong opposition of the majority of the series' manufacturers and goaded by a ultimatum from another manufacturer, who later became a mainstay of the IRL, CART complied. And promptly lost all its sponsoring manufacturers, whose support was the life's blood of the series and its teams. Critically wounded, CART was left with reunification with the IRL, in whole or part, as its only viable option. Not to worry, the insiders whispered, come to an open wheel "summit" to be heard.

In Pook's words, what happened next is that: "We put it [commonality] out as an olive branch to try to form some type of compatibility with the other side to bring us closer together to see if we could merge the two. But the olive branch was broken off in two pieces, and we were slapped around the face with it and told to get out of town."

Problem was, CART was now resident in the town and under siege from all quarters. The "peace proposal" had been a trap. Tony George and his allies in Daytona Beach had even had the unmitigated gall to have Pook & Co. pay to transport their belongings to their own cannibal's soup, where their remains could be picked apart by their enemies without them having to go to the trouble of paying freight!

So, it is unlikely that Pook, the guerrilla leader, will fall for any more peace proposals from the benevolent folks in Florida or Indiana. But they know this; they've been outwitted by the masterful Brit enough times to get the measure of the man. So, if the ostensible peace proposal was not the intent of the media notes sent to Pook, what was?

ISC and its partners have the classic problem that any entrenched force has in dealing with a small, highly-mobile guerrilla unit--it's illusive. In military terms, CART's permanent road course events might as well be held in a fort. Pook and his band are not vulnerable to attack or disruption there. But, street course events, held in public places are relatively unprotected. The conglomerates want CART to commit to a schedule of street races (in addition to its road course venues), so they can catch he and his forces out in the open and annihilate them.

The Grand Prix of the Americas, to be held October 4-6 in Miami, Florida, is the quintessential model for the final battleground as envisioned by the "Daytona Cartel".  Of all the streets in all the Americas (save perhaps Long Beach, CA), Miami has the ones where Pook the street fighter and his turbocharged, high-tech open-wheel guerrilla racers stand their best chance of victory. If they fail there, their cause is in doubt because the conglomerates will have found a way to drive a stake into CART's heart.

Since the conglomerates hold sway over most of the nation's motorsports press, as befits the group controlling its most popular form of motorsport, they can portray an engagement in pretty much any light they desire. Where the battle in Miami is concerned, they choose to depict it as a fairy tale involving the Big Bad Frances in a turf war over one of their brick houses, Homestead-Miami Speedway. This is a tale told so often in childhood that it goes right past the critical thinking function of most observer's brain and registers somewhere in the memory near the story of Jack and the Beanstalk. We have the erstwhile Jack (Pook) trying to sneak one past the giants with the colossal egos (the Frances), who are jealously guarding the golden goose (Homestead-Miami). This is something the average Joe gets before he gets it and the fiction is designed to hide a larger, more sinister purpose.

APPOINTMENT IN MIAMI

Originally proposed in the fall of 2001 by local race promoter, Raceworks, the Grand Prix was to be an American Le Mans Series race that would bring its international style of racing and 180-mph speeds to a picturesque waterfront course in Miami this past April. Raceworks, owned by architect and developer Willy Bermello, motorsports industry attorney Peter Yanowitch and racing legend Emerson Fittipaldi, had plans to return the Grand Prix to the streets of Miami.

Though the city was the host to some of the world's most successful street races in the 1980s and into the 1990s, the music of a race engine at full song has not echoed against Miami's downtown skyscrapers since 1995.

Miami became part of the racing game when a local entrepreneur, Ralph Sanchez dreamed up a race through the downtown streets. Sanchez, a Cuban immigrant and self-made multi-millionaire, loved auto racing and thought it was a perfect way to showcase the cosmopolitan beauty of his adopted city. He promoted the Miami Grand Prix for sports cars which was sanctioned by the original IMSA. He also talked his good friend, Emerson Fittipaldi, who had retired from racing after his foray into Formula 1 with his own team nearly caused him to go bankrupt, to come out of retirement as well as lend his fame to the endeavor.

A hugely successful series of Grand Prix races followed its debut in 1983 and continued well into the 1990s. The sports cars ran on the Grand Prix's 1.784-mile temporary street circuit until 1985 when the PPG CART Indy Car series became the premier event. Each year from 1985 until 1988, the CART series raced through the streets of Tamiami Park, Miami bringing its unique blend of high-octane excitement and thrills and filling the city's coffers each November. In 1995, the year of the Indy Car "split", the CART PPG series was back on the streets in March for the Marlboro GP of Miami.

The success of the Grands Prix began to threaten their existence. They helped bring prosperity to the area and the resultant development began encroaching on the downtown race. Ralph Sanchez began to cast around for a place to locate a permanent facility.

In 1992, Hurricane Andrew devastated South Dade and the City of Homestead. Sensing an opportunity, Sanchez met with Homestead's then-city manager Alex Muxo to negotiate a deal that would bring a racing facility to town with hopes of aiding in the revitalization of the city. With a loan from H. Wayne Huizenga, the "King Midas of South Florida", and $11 million in seed money from hotel taxes, groundbreaking for the new complex took place less than a year after Andrew came to town in August, 1993.

One gets the impression that Ralph Sanchez knows most of the right people in his neck of the Sunbelt.

Grand Opening ceremonies for the ultra-modern 1.5-mile Homestead Motorsports Complex were held on Nov. 3-5, 1995, as NASCAR made its South Florida debut in front of a sellout crowd of 60,000 with its Craftsman Truck and NASCAR Busch Grand National events. Executives and dignitaries did the ribbon cutting and Dale Jarrett provides the fireworks. Although not a points race, former Daytona 500 champion Geoffrey Bodine was the Speedway's first "winner" of a race, taking top honors in a NASCAR Craftsman Truck Series exhibition race on Nov. 4, 1995 - the day before Jarrett won the inaugural Jiffy Lube Miami 300.

In July, 1997, Penske Motorsports, Inc., and International Speedway Corporation became partners with Sanchez and Huizenga. ISC purchased a 40 percent interest in the Homestead Motorsports Complex. Prior to the PMI/ISC takeover, the complex's 1.5-mile oval had undergone an $8.2 million reconstruction which transformed the former quad-oval and its "short-chutes" between the turns into a continuous-turn oval. The Speedway also has an infield road circuit which is used by the France-backed Grand Am sports car series and others. In 1998, ISC purchased an additional 5 percent and owned 45 percent of the facility, with Penske Motorsports, Inc., owning 45 percent. On March 15, 1998, PMI and ISC acquired Sanchez's remaining interest in Homestead Motorsports Complex, and longtime Penske Corporation employee Brian Skuza was named president. Sometime during the acquisition the Motorsports Complex was re-christened the Homestead Miami Speedway, staking out a unilateral claim to the Miami motorsports market.

In 1999, the ISC merged with PMI. With the merger, ISC held a 90% interest in the Homestead-Miami Speedway (it acquired the remaining 10% in 2001). Coincidentally, I'm sure, in 1999 the Speedway hosted NASCAR's premier Winston Cup division when Tony Stewart won the inaugural Pennzoil 400. Prior to the event, the Speedway nearly doubled its seating capacity, raising the existing grandstands from 32 to 48 rows while adding a massive expansion in Turn 1.

FAST CARS, BIG MONEY

As an aside, the Ft. Lauderdale Sun-Sentinel in February 1997, published the results of a study of the financial impact of the partially public funded ($60 million in tourist taxes) Homestead Motorsports Complex and the CART Marlboro Grand Prix of Miami on the economy of South Dade county. The headline read: "Auto Racing, Fast Cars, Big Spenders -- Grand Prix of Miami worth $23 million to local economy." The study had several interesting findings, especially as they relate to CART and the current owner of Homestead Miami Speedway, ISC.

* Really fast cars generate really big money. * CART, running its second straight season at the South Dade superspeedway, would attract 155,787 spectators over the three-day race weekend, including an expected sellout of 72,000 for Sunday's headline event. * The author, Washington-based economist William Lilley, said the $23 million in actual spending represents a 10-percent increase over a similar study he conducted the year before. Lilley's canvassers discovered that hotels, restaurants and shops as far north as downtown Miami were generating heavy race weekend business for the PPG CART Indy Car series event. * More importantly, Lilley said, about 80 percent of that spending would be generated by people outside Dade County. This was music to the ears of Metro-Dade politicians and Homestead boosters who had committed $60 million in tourist taxes to build the track shortly after Hurricane Andrew devastated the area in 1992.

"If Hurricane Andrew took Homestead off the map, then (the motorsports complex) put it right back on the map," said Metro-Dade Commissioner Katy Sorensen. "The psychological impact on the community is just as great as the economic one."

* Auto racing events such as the Grand Prix were generating new dollars - and tourists - into the community rather than pro baseball, football, basketball and hockey, which largely take entertainment dollars that would have been spent on other local events.

"What's significant is that this is new money that wouldn't normally come into this community," Lilley said.

* In relatively small, poor and undiversified economies such as South Dade, the near-absolute certainty of sharply increased revenues at a predictable point in time is an important factor in determining the ability of a relatively small service business to profitably exist. * Indy Car events typically draw a slightly wealthier audience than the NASCAR Busch Grand National or Craftsman Truck events that also run at Homestead. * The average race fan will spend $150 a day for tickets, food, beverages, parking and souvenirs. * The Grand Prix is also more of a recognized event because of its history; Sanchez has been promoting the race since the early 1980s, when it ran through the streets of downtown Miami. * Hoteliers, especially those close to Homestead, were cashing in on the 100 percent capacity rates. Room prices during Grand Prix weekend are, on average, 35 percent above normal rates this year; the figure was up from 28 percent in 1996.

The economics of the situation clearly indicate what a Grand Prix of the Americas type of event can mean to the city fathers of Miami. Speedways of the sort owned by ISC/SMI are self-contained merchandizing loops. It's not a coincidence that the oval track conglomerates inevitable include subsidiary divisions providing catering services, food and beverage concessions, merchandise sales and production and marketing of motorsports-related merchandise. At this moment, there is a nationwide fan boycott of certain ISC tracks because it is charged that they used 9/11 "security concerns" as an excuse to ban coolers from the tracks, forcing the fans to buy their food and beverages from ISC concessionaires, who reportedly raised their prices to celebrate the occasion.

Speedway conglomerates like ISC use their political clout to try to get the taxpayers of an area to pay as much of the cost of their tracks as possible. If they can't get direct building grants or loans at low interest, they lobby for tax-free status and/or reduced fees of all types. All of these requests are predicated on the supposed infusions of money and jobs into the local economy generated by the speedways in attracting tourists (i.e. fans from outside the area).

If one thinks about that proposition for a moment, though, one will see the weakness of the argument. Take the speedway's much vaunted addition to the job market. If a speedway holds ten race weekends a year, that's twenty days of seasonal employment for workers in the local economy.

When politicos were attempting to get the taxpayers to pay for the acquisition of a new professional football team in Los Angeles, CA a few years back, a University of Chicago study was produced which showed that the seasonal economic impact of an NFL stadium on the local job market was less than that of a average-sized Motel 6! One after another the copious economic studies presented to the city by the NFL citing supposed benefits to the local economy from the presence of a major-league football team were proved to be specious. Finally, after months of examination and debate, the NFL essentially said that the primary reason for a city to have a professional football team was for the status it conferred on the city. "A major-league franchise puts a city on the map," said a spokesman for the team owners association. The taxpayers of Los Angeles basically answered, "Thanks, but no thanks. We're ALREADY on the map."

The speedways are designed to keep every penny they can within the confines of the complexes. Their only valid argument for the role they play in augmenting the local economy boils down to being an attractive nuisance. In other words, the tourist industries (food, lodging, and gasoline) benefit from the race fans passing through. The same could be said for the fall display of the leaves changing colors on the East Coast and the trees aren't asking for taxpayer subsidies. Moreover, if the speedways could sell you a room for the night, meals and gasoline, they'd do so in a minute. Don't bother trotting out all the gazillion "studies" to the contrary, they're bogus. In fact one of the only parasites savvy enough to prey on speedway management are the highly paid "economists" churning out economic studies used to justify the conglomerates' stance with regard to taxpayer subsidies and government hand-outs.

Now, look at a street race anywhere--in this case, Miami. The oval track conglomerates make about 45% of their revenues from the sale of tickets. Given the same number of fans at a street race, the amount of tickets sold is the same but the revenues account for a much larger percentage of the promoter's gross because the rest of the revenues (by and large) that ordinarily go to the speedway, go instead directly into the local economy. Instead of the customers being held within the confines of the speedway, at a street race they're within the confines of the city where all the taxpayers and residents can benefit from any additional revenues which are generated.

Street races aren't just a threat to the speedway's monopoly with regard to the fan's dollar, they're a threat to the speedway itself. NASCAR is arranged such that most of the time the series participants need to race on expensive tracks with their smooth, banked turns and other features unique to the speedways. If one comes up with a popular motor racing form using readily available public infrastructure, like Champ Cars on a slightly modified city street, one has no need of speedways. Races can be held at potentially thousands of venues and the infrastructure put in place by the taxpayer pays dividends back to the taxpayer. This is not the forum for a long-winded discourse on economics; feel free to completely disagree (but you'd be wrong).

However, if even a modicum of the arguments made hold true, one has only to put oneself in the place of a Miami public official and in the place of a speedway executive to see why the former may welcome a street race and the latter may view it as a threat to his existence. Certainly, beyond dispute, is the fact that the speedway conglomerates want Chris Pook and his CART series to go away -- forever.

SHOWDOWN IN MIAMI

What should come as no surprise given the foregoing is that earlier this year the target of ISC's minions in Miami was not Pook but Don Panoz and his partner in the Panoz-Sanchez group, Ralph Sanchez (remember him?). Why? Well, they wanted to hold a street race featuring Panoz's American Le Mans Series and Sanchez's Trans Am.

Don Panoz is in love with sports cars. After amassing considerable wealth, primarily in pharmaceuticals and land development, Panoz and his son, Danny, formed Panoz Auto Development at the end of the 80's, almost as a hobby. Besides auto manufacturing, the company became involved with racing. The bug bit hard and in 1997 Don founded Panoz Motor Sports to race his own cars internationally and acquired the Road Atlanta Motorsports Center and Sebring International Raceway. In 1998, he added Mosport Park Raceway in Canada.

Panoz had found a mission: to revive major-league sports car racing, particularly in North America. In 1999, he founded the American Le Mans Series for sports prototypes with an eight-race schedule. The same year he expanded his motorsports holdings with the formation of the Elan Motorsport Technologies Group and the purchase of Van Diemen International and G Force. Panoz went into partnership with Ralph Sanchez and they acquired the rights to the Trans-Am series.

The turn of the millennium found Panoz expanding the ALMS into Europe, Asia and Australia. The series schedule was expanded to 12 races -- eight in the United States, one in Canada, 2 in Europe and the season finale in Adelaide, Australia -- including the historic 12 Hours of Sebring and the Petit Le Mans at Panoz's Road Atlanta. . In a sense, Panoz found his fledgling series expanding in a vacuum and with domestic and international televised coverage unprecedented in American sports car racing history, he found himself with a hit show on his hands.

It's not hard to see why. ALMS is sportscar racing at its finest and features both individual sprint races as well as endurance races with multiple drivers and pit stops. The formula is very exciting for the fans and viewing audiences alike.

With his series visiting race tracks across the U.S. and Canada, Panoz became focused on reviving some of the most historic and popular sports car races from the sport s illustrious past. It was perhaps inevitable, then, with Ralph Sanchez as a partner, that the idea came to revive the Grand Prix of Miami in the city's streets.

The prospects for the race couldn't have seemed brighter. The ALMS's popularity was soaring and former Miami Grands Prix had been unqualified successes. With Sanchez on board to shepherd the race, Miami's elected officials were looking forward to a healthy boost to the local economy and the opportunity to showcase the city's downtown and waterfront around the world.

What they had in mind was a 1.54-mile temporary racing circuit that would include part of Miami's famous Biscayne Boulevard and the city's Bayfront Park. Cars would travel south on Biscayne, make a brief loop to the north, and then turn into Bayfront Park. The circuit would wind through the park and then rejoin Biscayne. Pit road and the paddock area were to be placed on Biscayne Boulevard.

While racing through the park, the cars and the television cameras following them would have scenic Biscayne Bay in the background, with dozens of yachts and other boats moored in the water. Large cruise ships would be visible in the distance at the Port of Miami. It was remarked that the world-famous Grand Prix of Monaco has similar nautical scenery.

Thus, Raceworks, LLC, a group of Miami businessmen working with the full cooperation of the city, secured a city lease to stage the Grand Prix of the Americas over a three-day weekend set for April 5-7 of this year. The event was expected to attract a projected 50,000 to 75,000 local and international spectators to downtown Miami.

Way up the Florida coast to the north, the France family took notice of the plans of the group in Miami and was not pleased. In their view, the only one that counts in their estimation, the Homestead-Miami Speedway more than adequately serves the Miami market and they did not want any other races taking place in South Florida, particularly ones put on by the ALMS.

That is because they are also at war with Don Panoz and his ALMS.

The Frances have never consented to an interview on the subject so one will have to intuit the reasons for their dislike. Like CART the ALMS stages road races on permanent road courses and city streets. So does its allied Trans Am series. Arriving out of the blue, the ALMS was an unexpected hit with television audiences and a competitor for the domestic motorsports dollar. Most important, though, was the fact that the series showed no sign of ever needing to rent ISC's facilities and the Frances didn't own a piece of the action.

Many of the speedways owned by the conglomerates contain infield road courses. They get plenty of use for everything from driving schools to motorcycle racing. Generally speaking, what they don't get used for, however, is big-league road racing. For whatever reasons, most fans of road racing do not consider the speedway road courses to be proper venues for their favorite sport. It is perhaps understandable that the Frances and the other speedway owners have never understood this.

Faced with an emerging road racing series which makes exclusive use of permanent road circuits and city streets, ISC's response was automatic and well-rehearsed: destroy the series and replace it with a pale imitation owned by the Frances and which makes use of the infield road courses at speedways and/or conglomerate tracks. Thus, the Grand American Road Racing Series was born in 2000.

As is the norm, the Frances' description of the mission of their Grand Am is a study in hypocrisy: "Most importantly, Grand American has brought stability to sports car racing and automobile road racing in general. This country has seen a variety of organizations and private entrepreneurs come and go at the helm of automobile road racing. The result has been that the sport has lagged behind other motorsport series in developing a sustained fan base and sponsorship support. It is our mission to provide the stable platform this sport so dearly needs and we will do that by controlling our spending and growth at levels that can be built on each new year."

In that brief statement, ISC basically outlined the key elements of their campaign(s), only in reverse: destabilize the target series by creating a competing series and attack the viability of the fan base and sponsor support to end up "at the helm of automobile [fill in the type] racing."

As was mentioned at the outset, what makes the situation in Miami so noteworthy is the fact that the ALMS, the Trans-Am, and CART all have powerful friends among the movers and shakers of the city. It's remarkable that ISC chose to attack them there. For one thing it is an open declaration of "total war", meaning that ISC is signaling that it will settle for nothing less than complete victory -- no "peaceful co-existence" being possible. Secondly, it is a test of ISC's might. To paraphrase the song: "If they can do it there, they can do it anywhere."

THE OPENING ROUND

In mid-December of 2001 the principals of Raceworks, LLC secured the go-ahead from the city and hosted a "kick-off" luncheon to mark the official 143-day count down to the Grand Prix of the Americas, "a high voltage street race slated for the streets of downtown Miami."

The luncheon was held in a tent in Bayfront Park, the site of the event, and featured prominent auto racing personalities including Derek Bell, winner of the 1985 Grand Prix of Miami, Raul Boesel, winner of the 1991 Grand Prix of Miami, and Andy Pilgrim, GTS class winner for the past two years in Petit Le Mans at Road Atlanta.

The official Grand Prix of the Americas logo, designed by Coconut Grove architectural and engineering firm Bermello Ajamil & Partners, was unveiled at the event.

The entrance to the luncheon tent was lined with racing cars including a Champion Racing Audi R8, a Porsche 911 GT3 RS and a Porsche 962 Prototype.

Peter J. Yanowitch, President & Founder of Raceworks LLC, stated, "This event will attract thousands of tourists, race participants, sports enthusiasts, and the international press who will patronize the local hotels and restaurants generating an economic impact in excess of $25 million for the City of Miami."

Mr. Yanowitch also happens to be Ralph Sanchez's attorney and friend.

"We will celebrate the 20-year anniversary of the original Downtown race by adding more entertainment activities that will appeal to a wider audience", said Willy A. Bermello, Principal of Raceworks LLC.

Famed championship driver and race promoter Emerson Fittipaldi, who recently joined the Raceworks team, said: "I have had a long-standing love affair with Miami. It is the perfect location for auto racing and I am very excited to be part of the return of racing to Downtown Miami."

The main attraction was to be an American Le Mans Series race, a series of sports car endurance races that features many of the same world-class drivers and cars that compete in the famous 24 Hours of Le Mans.

"They will join the international and cosmopolitan atmosphere of Miami. Sports cars are extremely popular in Miami, and most of the old street races in the city were sports car events."

"I'm really excited about racing in Miami," said Tom Kristensen of Denmark, a three-time winner of the 24 Hours of Le Mans and a driver for the powerful Audi factory team. "We presented our new Audi in Miami two years ago and the people were very excited to see it. It's a lively city with lively people, and the event will be very exciting."

"I raced in the last street race in Miami in 1995 and it was great," said California's Bryan Herta, who has joined the Panoz factory team for 2002 after a stellar career in CART racing. "It's an exciting city to be in and a great place to hold a street race."

The Grand Prix of the Americas weekend in Miami was also to include a race for the popular Trans-Am Series for the BFGoodrich Tires Cup, along with a race for historic sports cars, including many that actually competed in previous Miami races. Also part of the weekend was to be a celebrity race, with participants to be announced.

Around the time of the "kick-off" luncheon, the Miami City Commission members started receiving phone calls from officials representing the Daytona Beach motorsports conglomerate seeing if there was anything that could be done to stop the event. They are said to have coaxed and cajoled, calling city commissioners at home trying to bring pressure to bear, warning of a possible scarcity of comp tickets to the popular NASCAR events as well as greater care exercised with respect to future campaign contributions. After failing to exert enough pressure on the Miami City Commissioners, the Speedway and ISC finally hired a large law firm to continue the battle and to ferret out any possible loophole and stop the event, and they did.

A lawsuit was brought to block the event, citing irregularities in the lease arrangements between the city and the race organizers. A county judge threw out the agreement between Raceworks LLC and the city of Miami. For technical reasons the county judge felt that a revocable permit to hold the event was more appropriate than a lease.

The problem for the Raceworks group lay in the word "revocable". By having a county judge vacate the lease in favor of a permit, ISC had accomplished at least two goals: they had opened up the process of granting permission to hold a race to a virtually unlimited number of challenges up to the actual moment of the race and they had managed to pit county officials (with whom one assumes ISC has more influence) against city officials.

With nothing but delays and legal wrangling in sight, Raceworks started to cast about for an alternative. The added expense of the legal proceedings and road-blocks caused the promoters to determine that they needed more co-investors and a loan from the city for marketing and staff and to help start construction of the course. Application was made to the Miami Sports & Exhibition Authority for a loan and Raceworks openly searched for investors willing to buy a controlling interest in the event.

CART had been looking at several sites in and around the Miami area and a Miami race some time ago and let the ball drop when the folks at ALMS beat them to the punch. CART was being forced out of venues controlled by the conglomerates. CART had had great success with its street races in Miami in 1985-1988 and 1995 and hoped to return. Panoz, though, seemed to have the race locked up. Until ISC launched its attack on him.

"The enemy of my enemy is my friend." Pook and Panoz have mutual friends. For all I know, Pook and Panoz are friends. Raceworks and CART going into partnership in Miami had many advantages. They were both battling a common enemy, ISC. The conglomerate showed no signs of letting up and the ALMS/Trans-Am race date was near--too near. Moving the race date to October with a joint event gave everyone breathing room. Raceworks would provide the friends in Miami that CART needed. plus add a vital race to its schedule, while Panoz & Co. got the financing they needed along with an ally in battling ISC. Once the Grand Prix of the Americas is in the history books it can also be assumed that it will be more difficult to disrupt next time.

So, Raceworks LLC and Panoz's IMSA/ALMS decided to partner with CART for a joint mega race weekend in October featuring FedEx Championship, American Le Mans Series, and Trans-Am series races.

The organizers approached the city with a proposal to sell up to 60% of Racework's controlling interest to Championship Auto Racing Teams and applied for a $1.5 million five-year loan from the City of Miami.

"Raceworks is looking for investors to buy controlling interests in the event," said Lucia Dougherty with the law firm of Greenberg Traurig representing the promoter.

Event organizers asked Miami commissioners to amend the city-issued revocable license to reflect CART and a Delaware-base limited partnership as new partners. But the city administration said the change was unnecessary until an ownership transfer took place. Raceworks had the same owners it did when the license was granted, said Assistant City Manager Frank Rollason. Mr. Bermello owns 33.33%, Mr. Yanowitch 63.67% and Mr. Fittipaldi 3%.

While still not a partner, CART officially committed to participating in the three-day event. The American Le Mans Series race was moved to Saturday.

The race falls under the purview of the city's Sports & Exhibition Authority, which reports to the Miami City Commission. The group, with some city commissioners sitting on its board, is in charge of marketing, funding or underwriting sports and community events.

Ferey Kian, the Authority's director of finance, said the group's proposed loan to Raceworks consists of lending Miami Arena-generated funds to pay for road improvements. The five-year loan would have an interest of 150 points above Wall Street's prime rate. The $1.5 million would not be disbursed at once but in chunks, as reimbursements to incurred expenses, he said.

If Raceworks sells part of its ownership, the authority would get 7.5% from sales proceeds, Mr. Kian said. The borrower would also be subject to relocation fees.

If the event is moved out of Miami in its second year, Raceworks would pay $1 million. If it leaves the following year, it would pay $750,000. Fees will keep on decreasing until year five, he said.

While this provision is probably standard Authority practice (to see that public funds get spent where they're supposed to), it has interesting ramifications for any group who might wish to relocate to, say, Homestead.

The law firm of Steel, Hector & Davis, representing ISC/Homestead-Miami Speedway immediately notified the Miami Sports & Exhibition Authority that Speedway executives were also inquiring about applying for a similar loan for another street race they contemplated in downtown Miami.

The lawyers also questioned whether the city's revocable Street Race Permit granted to Raceworks LLC shouldn't be reopened to competitive bid to assure Miami taxpayers of the best return on its sale.

Jorge Luis Lopez, of Steel, Hector & Davis, said he was watching closely how the city and authority proceeded. His firm represents the speedway, which sued the city over its agreement with Raceworks, forcing the city to sign a revocable license with the promoters rather than a lease.

"To say that nothing has changed, when CART is about to get on board, is misleading" he said.

According to Lopez, another speedway complaint about the city's negotiations for the race was pending.

Miami Mayor Manny Diaz was highly upset with the turn of events and vowed "This race started in downtown Miami [as the Grand Prix of Miami]; this race belongs in downtown Miami, and this race will run in downtown Miami."

Finally, after more than a month of wrangling, the commission acted.

City officials made changes to the contract -- including making it a revocable license agreement -- which they said brought it into compliance with the county judge's order. The city also formally invited any other racing company to apply for an unsolicited license to race in Miami.

But Jorge Lopez, the lawyer for Homestead-Miami Speedway, questioned whether the city's actions were enough to address Judge Genden's ruling. "They thumbed their nose at the judge's order," Lopez said after the commission meeting.

Commissioners Joe Sanchez and Johnny Winton expressed their frustration with the Speedway, which they said was only interested in stopping the race.

Winton instructed City Attorney Alejandro Vilarello to ask the U.S. Justice Department to investigate whether the Speedway and its parent company, the International Speedway Corporation, are violating antitrust laws.

"Their entire intent has been to block this race for their own monopolistic purposes," Winton said. "They are trying to corner the market for themselves."

"The idea that ISC/Homestead Miami Speedway wants to offer a bid for another event in the area is sheer nonsense," said one local news source. "ISC/Homestead-Miami has no interest in seeing another racing event anywhere near Miami."

"It is hoped this is the end of ISC-Homestead Miami Speedway's intervention and that Raceworks and the City of Miami can move forward with the business of putting on a world-class racing event. However, we believe that neither threat of another court battle, nor threat of involvement of the U.S. Justice Department will deter the minions of the Family France, NASCAR, ISC and the Speedway, such is their arrogance and belief in their own power," wrote a local sports writer.


So, in July 2002, at a press event in Miami's Bayfront Park, "a ceremonial signing was held of the final permit allowing the Miami street race to go forward. The race, originally scheduled for April, encountered substantial delays due to legal actions brought by Homestead-Miami Speedway seeking to kill the event, as well as a change of ownership of race promoter Raceworks, LLC."

Miami City Manager Carlos Gimenez, before signing a giant facsimile Street Race Permit document, joked, "The real one was signed yesterday, so it's too late for another injunction. This race WILL happen."

"It's been a long and winding road, but this is going to be a great event for us," City Commissioner Joe Sanchez said.

Delays and legal challenges led to the race being moved to October but also transformed it into a full weekend of racing that includes the ALMS race, a Trans Am Series race and a CART FedEx Championship Series race.

But attorneys representing Homestead-Miami Speedway, which has been fighting the street race, say legal issues remain. At the next Miami City Commission meeting, they are scheduled to appeal the race's zoning permit.

"The fundamental issue is can you race in the park?" said Jorge Luis Lopez, an attorney representing the speedway. "We think the answer is 'No.'"

Lopez said his clients also questions whether safety issues have been addressed.

A Miami judge's ruling that the original contract establishing the race was invalid also is still on appeal, Lopez said.

Grand Prix of the Americas President Chuck M. Martinez said plans are on track and organizers expect crowds of at least 100,000 for the three-day event.

"We are fully confident everyone is on board on this," Martinez said.

Drivers, too, are excited about street racing in Miami -- the Miami Grand Prix was held on Miami streets, at Bicentennial Park and at Tamiami Park from 1983 to 1995 until it moved to the Homestead-Miami Speedway.

American Le Mans Series drivers Johnny Herbert and Milka Duno were on hand for a ceremonial placing of the first concrete barrier. They were joined by local CART drivers Christian Fittipaldi, Tony Kanaan and Oriol Servia who are expected to compete in Miami at the 18th of 20 CART races this season. Fittipaldi, who lives on Key Biscayne, made his CART debut at the 1995 race in Miami, finishing fifth. Fittipaldi is currently in seventh place in the CART standings.

"What Miami will produce will be outstanding," said Fittipaldi. "The drivers will entertain people during the day and they can party in the evening."

Servia is looking forward to racing on the streets of his hometown.

"It's the road where people go to buy their bread and can see 800 horsepower cars fighting for position," said Servia, who has a season best sixth-place finish in Japan. "It's more real racing in the streets."

Wednesday's event was not a press conference, per se, as there were no questions taken by the organizers. The event was primarily intended to introduce the new people in charge of the event, and to announce that legal hurdles to the race had finally been cleared. Local media, including several Miami-area television stations, were on hand for the event and did interviews with organizers and drivers.

On display at the event were an Audi R8 show car in Le Mans 2000-winning livery (ordinarily on display in Champion Audi's showroom in Pompano Beach) and (in a bold stroke of irony) a blue Motorola Michael Andretti Champ Car.

In the interim since the first launch of the Miami street race, the controlling interest in race promoter Raceworks was sold to CART, which is now the primary promoter for the event, scheduled to take place October 4-6. The ALMS race will run on Saturday, with CART and Trans Am races on Sunday.

"Downtown Miami and its Bayfront Park locale are very picturesque and tourist-friendly, and the cultural makeup of the south Florida area is incredibly diverse, making for what would seem to be an ideal climate for ALMS success. But in a most curious move, the preliminary CART schedule for 2003 places the Miami date in direct conflict with the Le Mans Preliminary Tests. So whether this marriage will be a long one remains to be seen."

[As an aside, note the recent events involving ISC and its allies with regard to the CART contingent that were on hand that day: Andretti and Kanaan gone to the IRL, Fittipaldi gone to NASCAR, and if memory serves the Japanese supposedly took a run at Servia for F1.]

Last week, a local (perhaps pro-ISC) news outlet brought events at Miami up to date:

____________________

Miami's street race is on ... apparently

by Richard Biebrich
Staff Writer
Posted Septemer 18, 2002

MIAMI 7 Giving new meaning to the phrase dog-and-pony show, Miami Mayor Manny Diaz stepped out of the yellow Corvette pace car on the grounds of Flagler Dog Track to the high-pitched whining engines of two Toyota pace cars and the smoke of a CO2 fire extinguisher.

Far removed from the lawyers arguing Tuesday whether a race can or should be held in the streets of Miami, Diaz proudly proclaimed the Grand Prix Americas race week the start of a renaissance for the city.

Miami's grand prix is going to happen, where it belongs ... in downtown Miami," Diaz said at a news conference featuring drivers from the CART/FedEx Series, American Le Mans Series and the Trans Am Series, which will compete Oct. 4-6, bringing racing back to downtown for the first time since the CART left for the 1.5-mile oval in Homestead in 1996.

"This race has been an obstacle race," Miami Commissioner Tomas P. Regalado said. "But we won."

The ongoing soap opera started when the grand prix was first announced in July 2001 as an ALMS event by the city and race promoter Raceworks.

The race drew legal challenges by the Homestead-Miami Speedway and was pushed back from April 2002 to its present Oct. 4-6 date, which allowed organizers to add the CART series. Judges continue to hear appeals even as the weekend has grown to become a week celebrating speed with Tuesday's announcement of the inclusion of Sept. 29's Miami Cycling Classic at Coconut Grove. The final stop on the U.S. Pro Cycling Tour, the four-year-old Classic will feature some racers from the U.S. Postal Service Team.

"In the past we've had big-name riders, but they've never been supported by full teams," said Lee Marks, president of Velo Racing, the promoter of the race.

With 17 days remaining until cars start to take practice laps on the street course laid out downtown, Diaz is hopeful the event's legal issues will fade.

"[The speedway's lawyers] come up with stuff all the time," Diaz said. "But I think we are now in a position where this is right around the corner, and I think we should just enjoy the races."

* * *

Footnote: CART's 2003 Board, as elected by CART's shareholders, includes one new appointee and eight returning directors. The new appointee is veteran motorsports promoter Rafael A. "Ralph" Sanchez who joins returning directors James Grosfeld (who recently resigned for personal reasons), Carl A. Haas, James F. Hardymon, James A. Henderson, U.E. "Pat" Patrick, Fredrick T. Tucker, Derrick Walker and CART President and CEO Christopher R. Pook.

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