Editorial

For CART, it's now or never

 

 by Mark Cipolloni
May 27, 2003

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Now that the month of May is over, and CART didn't take the shellacking it did last May when the IRL dropped one bombshell after another,  it's time to get down to the business of CART's future.  For all of CART's fans, this seems to be the 11th hour for the sport they love.  Whether or not CART has a future beyond next year is going to be determined within the next two or three months.  For many observers, unless a major deep pocket benefactor comes to the rescue, or at least two to three engine manufacturers join the series, CART's ability to survive beyond 2004 will be in serious jeopardy. 

It's no secret that CART is depleting its cash reserves at an alarming rate to produce its current 19-car grid.  After the loss of its two biggest engine manufacturers, and the majority of its sponsors to the IRL, the CART paddock is a mere shadow of its former self. 

Since September 2002, rumors of Bernie Ecclestone buying CART have been running hot and cold. It's now almost a year later and nothing substantive has materialized.  We're beginning to wonder if it isn't a diversionary smoke screen by CART stakeholders to hide the real picture.   

Certainly any commercial intervention by Ecclestone would be a landmark event.  Perhaps the motorsports story of the decade.  Stamping Bernie's name on the series would help attract major sponsors and manufacturers, something CART's management has been unable to do in the last 18 months. 

For the sake of argument, let's assume the Bernie rumors have no substance and that CART is awaiting its last rights.  Many are predicting CART's ultimate demise when its cash reserves are depleted, and without accomplishing the majority of the following initiatives, we too, may soon be joining that chorus.

Television
First, CART must buy air time on CBS for all of its races in 2004 and beyond.  Not 90%, but 100%, even if that means tape delaying some of them.  As we have seen, a tape delayed broadcast on CBS dwarfs CART's live ratings on SPEED Channel.  It's not good enough to say that some of NASCAR's and the IRL's races are on cable TV.  CART is in a precarious position.  Too many people in the industry and media are seriously questioning CART's future.  Sure, while the majority of CART's events are box-office successes, without a network TV package that goes above and beyond its competition, its "code 5" (i.e. life threatening).  Network TV reaches far more viewers than race day attendees.

The reason CART must have all its races on network TV is threefold;

1) If CART wants to attract new engine manufacturers, it must enter into negotiations with a solid USA TV package.  In the absence thereof, the engine manufacturers will not be willing to invest the necessary millions in order to reach the American car-buying public who represent the world's largest consumer marketplace. 

2) If CART intends to enhance the ability of its teams to sell sponsorship, thereby becoming self sufficient, they need a viable network TV package with which to negotiate team sponsorship.  As we see from this year's grid, a weak TV package yields empty sidepods.

3) Business-to-Consumer sponsors need a good network TV package.  If CART believes that it can remain in business by relying merely on the business-to-business deals between sponsors, it's deluding itself.  Sponsors don't need the CART platform to negotiate mutually beneficial business deals; what they need is a TV package from which to launch their business to consumer marketing and advertising objectives.  CART needs sponsors who sell goods to the consumer.  It's the consumer oriented sponsors that will buy TV advertising time for CART's races (much needed revenue to pay for the TV time buys) and perhaps feature its drivers in those ads so that someday they become household names.

If CART's current management team can't produce a 100% network TV package, CART's Board of Directors should find one that can, and fast.  Sure it costs twice as much to buy a time slot on CBS than SPEED, but the return on CBS is far greater (on a cost per viewer basis by over 10 to 1).  CART's future is at stake here.  If CART is going to deplete its cash, it's better to do so on a solid TV package than propping up teams.  Give the teams a great TV package to work with and they will find their own money.

Engines
The next key component of CART's survival is multiple engine manufacturer involvement.  It's great that the current Ford Cosworth engines are economical and equal, but Ford isn't spending the requisite amount of resources, financial and otherwise, necessary to properly promote the series.  CART needs to attract engine manufacturers that view CART as a marketing platform in which to sell their passenger vehicles.  And in that mutually beneficial process, in which the manufacturers use CART as a marketing platform, the series will flourish and the manufacturers will realize a return on their investment.

If it was up to me, I would suggest to Cosworth and Ford that they either agree to selling the rights to use those engines to other manufacturers (for a badging tolling fee of course), or I'd be on the telephone to John Judd or Zytek who would be more than happy to oblige.

Perhaps the best scenario would be for CART to have a Cosworth, Judd, or Zytek produce a standard, relatively high-tech "CART" engine.  CART would sell the naming rights to that engine to as many as six automobile manufacturers.  They would then pay a tolling fee to CART for the right to put their name on it.  CART could either have Cosworth, Judd or Zytek do all the engine rebuilds for all the companies (so all engines are equal), or produce blueprints of the standard engine and provide them to each engine manufacturer from which they would build their own. 

Each would have to build the engines to those blueprints, meaning all would be nearly equal.  Because each manufacturer would have to find ways to improve the engine's performance without changing its dimensions or material in any way, they would be competitively challenged to find 5 or 10 more HP out of the engine.  They should be spending their money on advertising, not R&D anyway.  If it was up to me, I would let each company design the look of their cam covers, nothing more.  CART should supply a standard Engine Control Management (ECM) system as well - to prevent any cheating with regard to traction control and the like.

If CART does not want to go the "standard" engine formula, than it must be prepared to announce its new engines specifications and a minimum of two major automobile manufacturers by July or August of this year.  If this announcement is not made by then, we fear the sun may never rise on the 2005 CART season.  Manufacturers must begin their engine designs now, to be race-ready by 2005. 

2005 is the critical year, because CART's cash reserves can't make it past 2004 with the current engines, like Cosworth might like them to. CART needs manufacturer involvement, and the investment that brings, as soon as possible.   If CART can't produce new manufactures by late summer, then any talk of a 2005 season is mute.

Who's buying?
Clearly CART is not going to stay a public company much longer.  Gerald Forsythe wants to buy CART, but even he admits he's not the right guy to go it alone. 

Bernie Ecclestone is the right guy, but those rumors have gone very cold lately.  If I were Bernie, I'd buy CART just to have it in my back pocket should the GPWC negotiations not go well.  Bernie could do wonders with CART if he devoted his attention to it like he does F1.  If the current manufacturers want to join the GPWC and split from the FIA, Bernie would find new manufacturers (GM, Hyundai, Kia, Audi, etc.) who would want to come onboard with his new CART series if the price of entry was reasonable.

The Rupert Murdoch/News Corp. buying CART rumor is perhaps the most intriguing (see rumors page for all the details).

Then there's the Kevin Kalkhoven and Roger Penske rumors, but Roger is surgically conjoined at the hip with ISC and the France family to get involved with CART.  Insiders suggest they would just as soon see CART dead.  A combination of a Forsythe, Kalkhoven and Jon Vannini owning CART would be an interesting mix.  Forsythe and Kalkhoven have the money, but it's Jon Vannini who has the take the bull by the horns and take no prisoners panache that can turn the company around.  With Chris Pook retiring soon, throw current COO and former Bernie Ecclestone right-hand man David Clare into the mix, and CART might just have the right combination at the top, finally.

Merging CART with the IRL has been suggested by many for years,  most recently by Mario Andretti and Roger Penske.  However, insiders say Tony George has been, and remains on, a personal vendetta to destroy CART, and this notion is purely fanciful. If he puts his hammer away, than perhaps it's possible.   In fact, with the IRL concept not connecting with the ticket buying public, CART might be best served by distancing itself as far as possible from the flawed IRL all-oval concept.  NASCAR is "king of the ovals," and it will be a cold day in hell before the France family allows any open wheel series to even minimally erode its stranglehold on that market.  To think otherwise is simply delusional.

Whether it's Bernie, Rupert, or the Forsythe/Kalkhoven/Vannini/Clare team, CART had better go private by the end of this summer.  If not, the vultures will be circling overhead come 2004, waiting for CART's final death knell, Tony George's final nail in their coffin.

Without some major blockbuster announcements from CART in the next two or three months, as outlined above, the reappearance in the media of CART's impending death is an absolute certainty.

Time is of the essence, for they are in the 11th hour, rapidly approaching midnight.  For CART, it's now or never.

The author can be contacted at markc@autoracing1.com

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