Champ Car cements another brick in its foundation
by Mark Cipolloni

 October 12, 2005

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As CART, now Champ Car, closes on its second full season under the ownership of Kevin Kalkhoven, Gerald Forsythe and Paul Gentilozzi, the series clearly has a new lease on life.  Whereas 2004 was a survival year, I predicted 2005 would be a foundation building year, and indeed that is the case.  With Tuesday's announcement of its exciting new car, Champ Car has laid another brick in the foundation that will support a bright and secure future. 

The new car looks mean and lean

The new car addresses many of the shortcomings of the current formula in the areas of cost, weight, technology, performance and presentation.  The new car will beat the existing car in every measurable way, and it has the racing discussion forums lit up like a Christmas tree.  Seems everyone is talking about Champ Car again.

From where I sit, the most important news about the new car is the price. A new rolling chassis will cost approximately 35 percent less than the current car while the costs of spare parts are expected to yield a savings to teams of nearly 50 percent.  This in itself will bring new teams and drivers into the sport.  One key element of NASCAR's success is large fields of cars and drivers.  For each driver in the race, there are fans sitting in the grandstand or watching on TV rooting for their "hero."  Eyeballs watching on TV and butts in the seats are key to attracting new sponsors.

While lowering the cost of entry is one key element, now the series needs to address the 2nd key element - prize money.  The current Champ Car prize money structure is pitiful.  In fact, if everything stays the same, the Atlantic Champion in 2006 will win more money ($2 million) than the Champ Car Champion ($1 million).  That's analogous to the NY Yankees AAA farm team making more money than the major league ballplayers.

We saw what the sweetened pot did for the Atlantic series - 40 new cars ordered and counting.  Imagine what would happen in Champ Car if the pot of gold for the championship winning team/driver was $5 million, or dare I say $10 million.  New teams and drivers with sponsorship in their back pocket will be fighting to get in the door. 

I had this conversation with new Champ Car president Steve Johnson and Chairman Dick Eidswick the other day.  They agree and told me to "stay tuned."  There are things they are working on with sponsors that will enable Champ Car to offer a much improved prize money structure in coming years.

A new business model and more positive signs

But the new car isn't the only sign that Champ Car is headed in the right direction.

A new marketing team, improved PR, better promoter relations, better promoters, new venues, better operations, better TV, better top management, race control and race operations.  In every way the new Champ Car is better than the old CART.  

Sure there's still work to do.  The series is not flush with sponsors like it was in CART's heyday, but that is about to change, and instead of the financial foundation being built on the backs of volatile car manufacturer money, the series has rid itself from that noose around its neck (just ask the IRL), and is beginning to build a financial structure based on a plethora of sponsors who are in because it makes good business sense.

"We're in some major negotiations right now with several sponsors that are not only team sponsors but series sponsors. Boy, all I can say is stay tuned because we're going to have some big announcements coming up that has a lot to do with our teams as well as series," says new Champ Car President Steve Johnson.

Champ Car's new business model makes a lot of sense in many respects.  Sure the car manufacturer money is nice, and someday I'm sure car manufacturers will be an integral part of the new Champ Car series.  "But not right now," says Kevin Kalkhoven.  "When the time is right we'll bring them back in under the right circumstances."

Historically, the problem with automobile racing has been the desire of the car manufacturers to beat each other on the race track and use racing to help sell passenger cars.  In principle that sounds good, but in reality the series and the teams become beholden to the manufacturer money and get caught in the political crossfire between the auto giants as they maneuver both on and off the track to beat their competition. 

The only race series that has done a good job of really controlling the manufacturers has been NASCAR.  To their credit, they deliver value to the manufacturers in the way of huge TV ratings, huge race attendance and great marketing.  In return NASCAR rules with a heavy hand and the manufacturers are playing their game. 

As long as NASCAR can keep the rules stable, TV ratings high, attendance high, and everyone winning their fair share of races, the NASCAR family will continue to operate in harmony. The manufacturers also know that the series really doesn't need the manufacturer money any longer to survive.  Sure their money helps, don't get me wrong, but NASCAR is so flush with other sponsorship money, we suspect the manufacturers could pull out in unison and still the series will survive.

It's a juggling act and so far NASCAR has all its balls still up in the air.  Whether they can maintain that balance when Toyota comes in remains to be seen, but so far in the Truck series they are doing it well.

Champ Car has a long way to go before it approaches NASCAR's success, if that's even possible, but it had to start somewhere.  And of course NASCAR didn't have someone put a gun to their head in the name of Tony George and the IRL, and pull the trigger.

Champ Car to the rescue

Everyone except those feeding at the Hulman George money trough, are realizing that the IRL's concept of what open wheel racing should be is nothing but a failed repeat of the old USAC days.  CART dealt with that back in its early days, realized that USAC's predominantly oval track model didn't work, and set about to carve out a nice little niche built on more and more road and street circuits.

Tony George thought he had a better idea, resurrected the failed USAC model and, thereby, set the sport back 10 or more years. Now he's trying to morph into the old CART.  How ironic.

It's clear to me that several more things will fall into place for Champ Car in 2005 and into 2006 as Champ Car finishes the foundation for its future.  They still need to announce their TV package for 2006, they still need a series sponsor, some teams still need sponsorship, but all the signs have turned positive, and now it's not a case of if, but when. 

In 2006 Champ Car's house will be built on the foundation. That will set the stage for the target year - 2007, the dawning of "new Champ Car."

And believe it or not, Tony George and all the worshippers of the Indy 500 had better hope Champ Car succeeds.

Any hope that Tony George had of making the IRL the pinnacle of open wheel oval racing in North America is gone.  NASCAR has maneuvered to lock up the oval track marketplace in North America, even at the short-track grassroots level, and if it continues to monopolize motorsports in North America, other forms risk extinction......and with it the future of the Indy 500.

Racing fast open wheel cars on high-speed ovals week-in and week-out is downright suicidal and the cost enormous.  Ever hear of the phrase whistling past the grave?  While Tony George might not agree, the best thing that could happen to open wheel racing in North America is for the IRL to quietly go away in 2007 and by default everyone put their resources behind a single "professional" top-rung open wheel series in North America.

A successful Champ Car as the top rung of open wheel racing on road and street courses will ensure open wheel racing's future apart from NASCAR's oval model.  As in Europe and the rest of the world, open wheel racing's niche is road racing. The fact that open wheel racing's premier event, the Indy 500, is an oval race, just helps to make the 500 that much more unique and special.

Common sense says that's what should happen, but Champ Car isn't waiting for Tony George to come to his senses.  As Steve Johnson said, "The Champ Car World Series is focused on our business model and Champ Car. We're continuing to move forward with that. We're not focused on anybody else out there, other than what we're doing. We're going to provide the best entertainment value in motorsports."

The author can be contacted at markc@autoracing1.com

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