Editorial

How a Champ Car and IRL merger might work
 
by Mark Cipolloni

 April 21, 2005

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The Indy 500 would be restored to its former glory, but more importantly the entire sport will prosper

While just about everyone agrees there should be just one IndyCar series, how to merge the two opposing sides has many people questioning whether it's even possible. Most people are blaming Tony George, and I'm probably just as guilty of that as anyone.  But until Tony has a plan in front of him that has a chance of working, my guess is he will continue to say "no thanks." 

The purpose of this article is to establish a base set of ideas from which an agreement can be reached by both the IRL and Champ Car. Wishful thinking?

Perhaps.

Perhaps not.

Where everyone sees hate and distrust created by the warring factions, I see opportunity.  Opportunity to turn the bitter negative rivalry into a positive. Every sport has rivalries and those rivalries engage the fans and make for great conversation at the Monday water cooler.

Basis of the proposal
The Indy Racing League and the Champ Car World Series will be merged.  The new company will be called the IndyCar Grand Prix Series (or whatever name they wish).  The Hulman George family will give the new series the exclusive right to use the name IndyCar for 99 years, or until the new company is dissolved.  Champ Car might prefer the Champ Car name but this is one area where they will have to yield.  "IndyCar" is a branded name, recognized worldwide, and is clearly the better name to use.

The series will have two divisions called the National Division and the International Division and the two will compete in a regular season and playoff series of joint races to crown an overall champion (see proposed schedule below). 

Hurdles to overcome
Certainly there are some major issues to address like:
1. Who will own and who will rule
2. Marketing and PR
3. Sponsorship
4. Race promotion
5. Equipment and Competition Rules
6. Schedule and Points: How will a champion be crowned?
7. Swapping Teams: Code of Conduct

While I don't claim to have all the answers in this highly charged topic, I do know that something must be done to get the two sides of open wheel racing back together again.  The split is threatening the very existence of the sport and the families that make a living from it.  I'm not willing to just take "it can't be done" for an answer.


Tony George has the power to put Indy Car racing back together again

Who will own and who will rule
Tony George wants to own and run it all. He has made that perfectly clear.  He can't, and he does not have to. In every negotiation there is give and take from both sides.  This is one area where Tony is going to have to give in and accept a partnership. Tony gets 50% and OWRS gets 50%.  Better yet, Tony George, Roger Penske, Kevin Kalkhoven and Gerald Forsythe would each own 20% each.  Each will put up starter money to start and fund the effort equally for a couple of years until the new company becomes profitable. 

One outsider would be brought in on the board for a total of 5 votes to ensure there are no tied votes. Call it a checks and balances system as no one person makes a wrong decision.

The problem with dictatorships is that the dictator does not always make the correct decision.  With this proposal, at least three of five people have to agree, which means there is a better chance all the issues have been examined thoroughly before getting the go-ahead.  The objective will be to have a lean management structure that can make decisions decisively on the majority of issues.


Kevin Kalkhoven has been leading the Champ Car charge

Marketing and PR
The two divisions will be marketed and promoted by the same group of individuals with no division getting preference over the other.  Existing IRL and Champ Car marketing and PR staff will be merged and report to the same Executive VP.

Why a joint effort?  Because it is important that both divisions get equal treatment and the relationship doesn't deteriorate into an us vs. them war again.  Decisions on marketing and PR should be made to the benefit of both divisions.  Remember, the goal here is to grow the entire organization and create a "friendly" rivalry between the two divisions much like we see in all stick-and-ball sports, not a rivalry whereby one side tries to put the other side out of business (as is the case now).

One key to a joint approach is the ability to develop and grow the branding and the theme of the product consistently in all markets, both domestically and abroad.  But the overriding strategy will be to make the drivers the stars.  NASCAR's success has been its ability to make heroes out of its athletes. 

Sponsorship
Adequate sponsorship for both the IRL and Champ Car is an issue right now and part of the problem is the war.  Some sponsors view the current open wheel environment whereby the competing sides are trying to destroy the other as bad for business.  Why get involved in a bee's nest when they can waltz over to NASCAR and know there's no war going on. By becoming one company that barrier goes away.

Having 30 races as presented below means that there's an IndyCar race just about every week during the season, much like NASCAR.  That continuity helps to keep fans interested knowing they will have a race to watch every Sunday. It also makes negotiating a TV contract better because you are dealing with volume and diversity.  The intrigue caused by the battle between the two divisions makes for good TV.  Eventually TV ratings will begin to increase and TV ratings are directly proportional to sponsorship dollars for the teams and the series.

The marketing staff of the new series will assist all the teams and the race promoters in finding sponsorship.  Right now it's a tough sell because of NASCAR's popularity, but once the war is over companies will begin to take a closer look at open wheel racing again, especially when the TV ratings begin to rise and they see a cooperative effort being made by all constituents.

Race Promotion
The brunt of race promotion falls on the shoulders of the promoter of each individual race in the local or regional market.  However, the sanctioning body must be responsible for nationwide and, in this case worldwide, promotion of their series and its drivers.

While the marketing staff of the new series would be responsible for nationwide and overseas promotion of the brand and playing up the rivalry between the two divisions, they would also commit to each race promoter a minimum level of manpower and advertising dollars for the local market promotion. 


CART was running laps around the competition until the split set the sport back to the Stone Ages.  It's time to restore the sport back to its former glory

Equipment and Competition Rules
All new cars designed to run on ovals, street and road courses will be used starting in 2007.  The chassis will be developed jointly by the IRL and Champ Car staff.  The new car will be 100 pounds lighter than the existing cars that are simply too heavy and look clumsy and slow in a street race environment.

Engines will either be 1.8L turbocharged V8's running on methanol or 3.0L V10's running on ethanol.  An RPM limit in the neighborhood of 13,000 will be the goal, subject to debate. Great emphasis will be made on making the engines sound great. The gearbox will be the existing Champ Car gearbox, modified to mate to the new engines. 

This gearbox has proven to be versatile and it works well on all types of circuits.  Wheels and tires will be changed to Formula One size, i.e. 13" wheels but slick tires will be used instead of grooved.  I have made the argument on numerous occasions why the higher, more forgiving sidewalls of an F1 tire make for a better show for  the fans by allowing the driver to get the tail out and not have it break away without warning.  Trivial?  The devils in the details.

The goal of the new rules will be to keep team costs in the neighborhood of $8 to $10 million (max) per year for a 2-car team.

Engine manufacturers will be required to supply an equal number of cars in both divisions (minimum of two cars in each division their first year, minimum of four cars in each division in subsequent years).  Here is the key difference from the past - To prevent the teams from becoming beholden to the engine manufacturers, manufacturers will only be allowed to contribute up to $1 million to each car per season, be that in the way of engine subsidies, personnel hires, etc.  This will be carefully monitored and stiff penalties will be imposed, including exclusion from collecting points the remaining races of the season if caught exceeding this limit.

If a manufacturer wants to participate over and above that amount they can do so in the way of race sponsorship, track signage, TV ads, etc. - all things which can help the series grow while getting the message out about their products.

Schedule and Points
The schedule presented below is hypothetical.  While the international division has many international venues, they also have some USA, Canada and Mexico venues.  In order for teams to sell sponsorship to foreign companies, they must offer them adequate exposure in the USA market, the largest consumer market in the world.  That's where a strong USA TV contract will be essential.

Due to sponsorship demands, some teams from one division may want to also participate in races in another division.  However, while they can compete for the race win and prize money, they will not collect points for non-division races.  In addition to the joint races shown in yellow below, a team may participate in up to three non-division events per year.

Races will be held on alternating weekends to avoid TV conflicts.  With the schedule shown below there will be an "IndyCar" race on TV almost every weekend, just like NASCAR.  This will keep the series and its drivers in the news.  The NY Yankees baseball team doesn't play every day, but every day there is a baseball game being played somewhere.

Three oval tracks and three road course/street course tracks were chosen for the six "joint" races and some consideration was given to whether the paddock and pits can accommodate the larger field of the joint races.

Race

National Division Races International Division Races
1    
2 Homestead Miami, Florida  
3   Phoenix
4 St. Petersburg, Florida  
5 First Joint Race: Long Beach, California (Double Points)
6   Motegi, Japan
7 Houston, TX  
8   Zhuhai, China
9 Sonoma, California  
10 2nd Joint Race: Indy 500 (Double Points)
11 Milwaukee, Wisconsin  
12   Edmonton, Canada
13 Fort Worth, Texas  
14   Cleveland, OH
15 3rd Joint Race: St. Jovite, Canada (Double Points)
16   Denver, Colorado
17 Kansas City, Mo.  
18   Toronto, Canada
19 Nashville, TN  
20 4th Joint Race: Chicagoland, IL (Double Points)
21   San Jose, California
22 Detroit, MI  
23   Holland
24 Watkins Glen, NY Germany
25    
26 Richmond, VA  
27   Surfers Paradise, Australia
28 Sparta, KY  
29

5th Joint Race: Mexico City, Mexico (Double Points)

30

6th Joint Race: Las Vegas, Nevada (Double Points)

Points
Points will be awarded using either the existing IRL or existing Champ Car points system for regular season races.  For the "joint" races, only the fastest 32 cars (33 for Indy) will qualify.  Some teams will go home early, but these are special races and, as they say, only the strong survive, so the fight to get into the field will be fierce and exciting.  The joint races will pay double points. 

Each division will crown a division champion based on points collected in the regular season races.  Then an overall champion will be crowned using a combination of points collected in the regular season races plus the double points collected in the joint races.  As with all sports, the "overall" champion will garner the most publicity and accolades.

There will also be points awarded to team championships, Rookie-of-the-Year, etc.

Swapping Teams: Code of Conduct
Similar to stick-and-ball sports, a driver will have a contract with a team.  Once that contract expires, the driver can renegotiate with the same team for a contract extension, or become a free agent.  Drivers are free to sign a contract with a team in either division once they become a free-agent. 

In the event that a driver wants to also drive for a team in the other division, assuming their primary team OK's it (doubtful due to risk of injury), that driver can sign to drive up to three races in the other division, but they won't collect points toward the championship.

Conclusion
The plan as presented above is a draft.  There would be many other details to iron out before 2007, the first year of the merger.  I have attempted to be as fair and equitable so as not to favor the IRL or Champ Car and I feel both sides have a lot to gain by the merger - I think that's obvious.

We all agree that one series would be best.  I think having two divisions with a little competition will give the sport far more publicity, yet allow everyone to work together toward growth and prosperity because they are governed by a single management team.

I present this for consideration to Tony George and OWRS.  And guys, "can't" isn't in my vocabulary and it shouldn't be in yours.  The future of your sport and the livelihood of many depends on your willingness to lay down your guns and reach an amicable agreement.

The author can be contacted at markc@autoracing1.com

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