Adria makes bid for CART race

[Muzza]

Fellows,

I understand that the Adria International Raceway, a new Italian race track located close to Venice, has officially presented a biding dossier to CART aiming to be included in this category schedule for 2004.

Gossips say that the race will be called "Alessandro Zanardi Trophy".

Adria was inaugurated this year and about a month ago hosted a DTM race. Facilities are said to be excellent, but the track lay-out is terribly mickey-mouse (short staright, hairpin, short straight, hairpin).

Adria official website is http://www.adriaraceway.com.

Well, I guess I just got another reason to visit my relatives (but I would love to see CART racing in Mugello).

Cheers,

Muzza

[Jay]

The track doesn't look terribly interesting(I know Lee would have a fit ), but it does look like it could be up to standard, so you never know. It looks like there might be a place or two to pass, which is what's important. Would itlians go to a Cart race though?

I must say, if it can be a success, I like the idea of running in Italy. But, I don't think we should have any more than three European races, and I thought Portugal was on the short-list.

[Lee Janotta]

Dead link. Here's the proper address:
http://www.adriaraceway.it/

Here's the page from racingcircuits.net:
http://www.racingcircuits.net/Italy/Adria.html

Do I really need to comment on how bad this track is? Though I'll admit it's damn near impossible to cram a proper race circuit on so little land.

CART literally can't afford to go overseas next year, it's gonna be a lot of last-minute scrambling to try and replace those dates with Willow Springs, Pocono, and Mont Tremblant.

[enemy-ace]

Mont. Tremblant would be fantastic!!!

[Jay]

Ahh Lee, I'm dissapointed. I thought you'd have to more to say on the circuit...

I wouldn't say Cart can't afford to go overseas next year, infact I'd say Cart can't afford NOT to go overseas next year. They are recruiting manufacturers and sponsors from overseas and not having races there would seriously put that in jeopardy, as well as the series. Brands is the only one that's a given though... hopefully Germany will be back, and another wouldn't be bad idea either.

[DNQ]

And with the Euro strong and the US dollar weak atm...

[Jay]

Tremblant....would be interesting. But, it's not designed to have powerful open-wheel cars running on it. The curbs are way too high, not enough run off, none of the faicilities required to stage such an event... Also, its only a short drive away from one of Cart's most successful events, the Montreal Molson Indy. It would no doubt take aways from it..or more likely nobody (except for maybe 5000 racing nuts) would go to Tremblant, opting instead for the much more convenient Montreal race. Anyway, you get the idea...

As for Cart racing in Europe, I don't think Cart has a choice.

[Lee Janotta]

Well, actually, I think if you space them out of the schedule, Jay, les Quebecqois will support both races passionately. Those people really know and love their auto racing. The province could probably support 3 races, I'd say.

As for Mont Tremblant itself... Hey, beggars can't be choosers, and this is crunch time for CART. It's anybody's guess now whether we'll even see it in 2 years. So whether they can honestly afford to hire the plane for the fly-away races is a real question. CART isn't going to even make it to that new formula in 2005 if they don't get through 2004!

*sigh*

Here's hoping, though.

[Jay]

But Cart has to keep its future in mind, and another race in Quebec wouldn't do much for that... There are no new manufacturers they can get from there. Maybe another sponsor or two, but nothing that would really help the series. They *need* to have a race in Germany and probably England too. Those are MUSTS if the series is even going to have a chance. I think not going to Europe next year would be literally giving up on the series.

I fully understand how mad the Quebecois are about racing (I live 1 mile from Quebec, and spend a lot of time there) while there are more die-hards in Quebec, most of them are just casual fans that will go if it's convenient.

Also, I don't see the point, considering the millions it would cost to bring the circuit to a place where they could run these cars... Much smarter to spend the money going to Europe and closing deals with engine manufacturers.

[Lee Janotta]

Jay, I just think this whole "plan" looks like a house of cards.

Pook's investing the whole future of the series on bringing in the Germans. And if it doesn't happen, all the money'll have been wasted.

It's a very shakey plan, vs. the alternative of scaling back CART to a North American privateer series which could then operate in a very healthy manner.

I just think those days of manufacturer interest in CART and big budget teams are gone, and won't be back for quite a long time.

[Jay]

Well, there is manufacturer interest in Germany, we know that much. Mercedes even a have a team looking into it, and my guess is that others do as well. Most Cart insiders seem to think there is more interest. Chris Pook isn't flying around the world for vacations and if you think that, you haven't been around him much.

I can't see how the series can rebuild without getting funding and help from outside of the US. Rigth now, all of the interest in the US is in Nascar, and there aren't many American sponsors or manufacturers interested besides Ford. Cutting the international races and just racing in the US, to me would be like saying 'The series has no future, so let's just have a few races for our own entertainment with the money we have left, then call it a day'. That's not what I or the Cart management want to do. I want to see the series grow, and get back to a point where it can sustain itself and have a national TV coverage again. Right now, the only way that will happen is with non-US manufacturers and non-US sponsors...until the economy picks up here. Besides, what would you rather see, a Porsche/Benz/Audi or a Chevy?

[Lee Janotta]

Originally posted by Jay
Besides, what would you rather see, a Porsche/Benz/Audi or a Chevy?

Chevy. The series was healthy when they were around, before Mercedes, Toyota or Honda. It's the Japanese and Germans who got CART all fat and bloated, bringing their stupid political squabbles into the series.

There _is_ room to survive, but not as a premier series, not right now. I think you're aiming too high, Jay.

And frankly, I think that question absolutely reeks of the eurosnob attitude that poisoned Indycar racing.

[Jay]

Suit yourself then, watch the IRL and Nascar. Cart is aiming to be closer to F1, but slightly below or to the side with more street races and some ovals, aiming at an urban audience. Cart would be more manufacturer friendly (kind of a nascar thing actually), with engines and chassis that apply technologies that can be more directly applied to road cars. In some ways, it's a lot like what the manufacturers in F1 were trying to do, which is why wokring with Bernie would be a good idea. Love him or hate him, best to have him on our side.

[Omega99]

Originally posted by Jay
Also, its only a short drive away from one of Cart's most successful events, the Montreal Molson Indy. It would no doubt take aways from it..or more likely nobody (except for maybe 5000 racing nuts) would go to Tremblant, opting instead for the much more convenient Montreal race. Anyway, you get the idea...

St. Petersburg and Miami both get good attendance numbers and are not in an area as crazy about racing as Quebec. Like Lee said, space them out (although this would be more difficult with the shorter summer) and it'll work.

I would hope that CART does have the money to go to Europe, or somebody hands it to them.

[Jay]

True, I didn't think of Florida, but Quebec has much fewer people that are much more spread out and already has 3 similar major racing events within 200 miles in addition to a number of others. Even if you could get the Tremblant circuit in suitable condition for Champcars (that would require a lot), I can't see getting more than 30,000 people for the race. Why spend millions to throw in another race in an already strong market when there will be minimal additional return for the series, and it won't due anything to secure the series future?

Ironic...the event I'm arguing against would be a 2 hour drive from here. I'm just being realistic though.

[Lee Janotta]

Ah, Jay... Everytime someone disagrees with you and Pook, you accuse them of being IRL fans. I could just as easily assert that you're really an F1 fan who doesn't know that there's a damn bit of difference between the two.

But what's really sad is that you seem more interested in rooting for CART as a corporate entity than as a racing series.

I've supported CART on everything up until this season. But I can't call myself a CART fan anymore, because CART is nothing but a corporation anymore, and one struggling to stay out of bankruptcy.

It's certainly no longer the series which I was absolutely devoted to since I was 4 years old. BPCCWSPBF bears almost no resemblence to the CART PPG Indycar Series. That's the series I was devoted to, not this.

I can't support this.

If you want to keep asking people to leave the room, Jay, pretty soon you're going to find you're the only one in it.

At this point, Chris Pook and Jerry Forsythe are doing as much damage to North American OW racing as Tony George or Joe Heitzler did.

This isn't a business, it's a sport. That's why the call it motorSPORT. And I'm no longer going to be part of the corporate feud that's ruining it.

Am I still going to watch? You bet. Am I still going to post here? Sure, just like I post in the IRL forum. But CART doesn't have my support anymore, I'm sad to say. I'm sure they won't even blink, but... It won't be long before others start feeling the same way I do.

[Jordi]

I think I'm not positive either way. Either way is Lee's view or Jay's view. But I'm gonna live for the moment. There is a night race today and I can't be arsed to think about financials right now. OK?

[Fogelhund]

Jay - 2003 sees the burning of $40million, leaving $40 million.

One can only come to the conclusion that CART can only afford to burn through $20million at most in 04'.

So a combination of increased revenue, decreased cost for $20 million is needed.

Where is this coming from?

[Jay]

I have no idea where you get those figures from... The last quarterly report for Cart showed a working capital of 75.1 million. The majority of money speant for this season has already been speant. Yes, a ton more will need to be speant, but it's there for the end of 2004. Other than that, I'm not sure what your point is - Cart just CANT afford to not race in Europe if it is going to be around, it's that simple. Cart's done a ton of cost cutting and needs to continue. That said, they're still rebuilding, and this involves spending money.

Great race tonight! I like the night thing!

[Fogelhund]

According to 10-Q - March 31 2003

Working Capital
Cash 15.7
Securities 54.9

Total - 70.6mil

*Down from 92mil at Q4 02'

Revenue Q1 03 - 6.1mil
Revenue Q1 02 - 5.6mil

Expense Q1 03 - 20.5mil
Expense Q1 03 - 12.5mil - netted out 8mil "race distributions"
Expense Q1 02 - 7.6mil



Notation - 1 more race in 03' for Q1 then in 02'.

I fail to see where the expenses have been reduced, in fact on most lines they've increased.

I fail to see exactly what you are talking about, when you suggest that the majority of the money to be spent has been done.

If you read the 10-Q, you will find the "Race Distributions" (pookfare) is being paid out throughout the year, and totals 33 million, of which 25 million is still to be paid out and accounted for.

All other expenses have not decreased over last year. Take a look, compare.

Expenses for 03' should come in around $115 mil., Revenues $60 mil. $15 mil loss so far, a further $40 mil to go.

* Note expense and revenue estimates based upon 02' actuals, and adding in additional $33 mil pookfare. I added in $3mil in revenue to round the numbers off. I do note a 29% reduction in sponsorship revenue though, despite televising more races.

CART can't afford to not race in Europe?

This is an interesting theory, and based on one of two premises.

a) Ecclestone and co. come in and replace pookfare with berniefare.

OR.

b) European manufacturers come in, provide free engines to teams, AND pay, in full, the costs for the teams and CART to be sent to Europe. *Please note, new manufacturers coming in before 05' will reduce the revenue generated by CART through its present lease program.

If neither of these premises holds true IN 04', then it is a cost that MUST be eliminated.

Being charitable, and realizing a loss of $55 mil for 03', net of taxes suggests, at best, cash position of $40 mil at the end of 03'.

So I think we understand what the point is now. So the original question is still relevant.

From this position, CART needs to reduces expenses by $20 mil in 04' over 03'. Where is that money going to be cut, and if not, who is replacing this revenue?

[Jay]

First of all, here's the actual document: http://biz.yahoo.com/e/030506/mph10-q.html
Here are the financial statements:http://biz.yahoo.com/fin/l/m/mph.html

You can't really compare spending this year with last year, because of all of new marketing expenses and revenues. Cart is a completely different company from last year, and will have a very different looking income statement. Revenues should be much higher this year as Cart will be receiving a lot more advertising revenue (most won't be seen til the Q2 report), that in the past would have gone elsewhere (teams, TV, promoters, etc). Thus the 60 mil figure from last year is too low. That could easily get you that 20 million! And check out Cart's balance sheet. It's the envy of most North American companies. Zero debt(long term Liabs) and 76 million in working capital. If Cart didn't have this, they'd be borrowing money now and looking a lot like Air Canada...which when you think about it is a very similar business.

As for Europe, this is how I see it: Option 1) Stay here, burn remaining cash to run a few more races, call it a day 2) Go to Europe, try to obtain additional manufacturers and funding that's not here to keep the series running.

Anyway, back about the original topic. I can't see this circuit getting on the calander for 2004, but possibly 2005 or 2006 if there's an itlian manufacturer or other financing in the series. Who knows..lots of talking going on.

[Fogelhund]

You are correct, the balance sheet is in wonderful shape, and thank someone for that. Without it, we wouldn't even be discussing this.

I normally use the SEC website itself to check all filings for a company.

You'll find the full 10-Q here http://sec.thomsonfn.com/sec/SecProd...des=E&viewer=Y

Frankly, I'll be suprised if there is a ton of revenue showing up all of the sudden from the TV in Q2, that somehow wasn't generated in the TV broadcasts in Q1, but we can discuss that once the second quarters are out.

[The Snout]

Well I support CART, it's not the total product I want but it's the best I can hope for considering where things were 9 months ago.

Where's CART going to get the money, I don't know ? But I'll be around to the bitter end, I'm not turning my back because it's not all going my way. You can bet that CART management are more aware than us ******s about the state of the business and are working their arses off to securing funding. CART may get their, we may go down, we won't know for a little while yet how the money chase works out, until then, as always, I'm in.

Judging by the International TV figures there's a lot of support outside North America and I'm happy for CART to go after it in the shape of manufacturers and a few races.

As for the Italian track, I'd rather Monza.

[Jay]

I dont know...I;m thinking like Jordi right now, I have to deal with this stuff all week, and don't want to have to it on the weekend...

yeah, I'm sure the champcars would put on a better show than F1 at Monza. Maybe if Cart and Bernie get together it could happen eventually. I'd fly to that.

[rustyfan]

Trying to get back on topic, I personally think the DTM race at Adria was a very pleasant surprise - I had expected it to be a rather boring race (given the flat look of the track), but it was very close and tight, with plenty of hard racing.

So even thought the track looks rather boring, I think CART would be able to put on a rather good show there.

Then again, I'd prefer to see them go to Spa if they were to add another race in Europe of course...