CART Sues Road America

[indycool]

Story out of Wisconsin says it happened but doesn't say what for......

http://www.wisinfo.com/sheboyganpres..._8637646.shtml

[JonesF1]

The world is coming to an End.

[JamesJimmy]

So, ummm, what exactly are they suing them about? Does anyone know? The article sure wasn't clear about it. I hope Pook doesn't start to think that he can do whatever he wants just because he has been relatively successful so far. Of course being from WI, I'm a little biased, but I think dropping Road America would be a massive PR blow to CART. It's not like people don't like the race. It seems to be the most popular track on the circuit. Sure, numbers were down a bit last year, but that wasn't unusual given the state of the series. The only person who has even hinted at having a problem with it is Pook himself, just because it's not a "larger market." Besides the popularity of Elkhart amongst CART fans, dropping it would also give the Prince of Indy a chance to snap it up (and don't think he wouldn't if he had the chance). Then he'd have the "double crown" of the best oval and the best road course in North America for his series. That would not be good, not good at all.

[Liz]

Maybe he's just trying to get the price down or some other concessions (a tactic he no doubt has heard from his friend Bernie .... )

[¡As-de-mim!]

These spectator numbers are better than many of the street events.

In 1995, ’96, ’98 and ’99, announced crowds of 75,000 spectators passed through Road America’s gates on CART race day and 115,000 for the weekends

[sgw2]

A law suit is an extreme way to negotiate. It certainly burns the bridge doesn't it? Even if this years race goes forward, it is the end for the CART-Road America relationship.

The rumor I heard is that CART wants to move the date but RA refuses. So CART is calling it breach of contract in order to drop the race. Don't know if that is true or not.

¡As-de-mim!,

The article goes on to state that crowds have shrunk to 60,000 recently. I know Laguna Seca has seen a similar drop in the last few years when they shifted date to June. Fontana's drop is similar, from ~90-100,000 down to 60,000 last year.

All in all not good news. CART needs to be at RA.

[Snrub]

Stupid, stupid, stupid. (despite the fact that we don't know what the suit is about) Elkhart is the crown jewel of CART. Always a great race and a great track and that's only from watching it on TV.

Like I've said before, even if Elkhart does little from an attendance or instant money marking perspective, it's great TV (which CART needs to worry about more) and great PR.

[Lee Janotta]

*drops dead*

[sgw2]

Here is what 7G is saying.

From 7G Rumors Page
Some of the rumors concerning Road America were solidifed yesterday with filing of suit against RA by CART in the Indianapolis courts. RA officials have had no comment and CART reps also had to decline comment as it is an active legal issue.

We did some additional investigating on the matter today, and it appears there may be more validity to the rumors mentioned below. 7G also learned that contrary to reports in various news sources today, CART is not filing to get out of any contractual obligations, but to the contrary. We hear that CART is actually filing suit to make sure RA performs and upholds its end of the deal and that the Champ Car World Series DOES race at the venue.

Although neither of the involved parties would comment on the matter directly, 7G did speak to a former track promoter representative who said, "Every promoter came to CART looking for help last year, and CART worked with each and everyone of us. We were actually the first group Chris Pook met with when he came on board. He managed to work things out to meet our needs. Now, one group turns their back on the best road racing in America just to follow Tony George and his money."

The meeting the rep refers to was the track promoter consortium led by IMG's Bud Stanner and held last February.

[Jay]

hmm...wait until the full story comes out.

[Jay]

but... right now, it's looking as if RA is to blame.

While it would be disapointing to lose the track, as it's a great drive, as far as Cart is concerned it really doesn't mean much. Any given street race is as successful if not more so. Many people in major city centres know about their local race, but almost nobody outside racing has heard of "Road America".

[Fogelhund]

The RA CART date was moved from its traditional 3rd weekend date in August to the first weekend. The 3rd weekend was given to the ALMS instead.

From what I have heard, the suit is based revolves around this date change, and something about sanctioning fees, though I know no more then this.

Of course there will be much more information on this to come out, such as were RA allowed to move the date according to the contract (assuming what I heard to be true), and so forth. The details of the contract will a) see if there is any merit to the case and b) see who may have cause to be at fault.

It will also get VERY interesting if this procedes very far and discoveries are done. I can't really say much more, but lets say it would not be flattering.

Rumour IRL gets 2004 date

[sgw2]

It doesn't matter if CART is right or not. The fans will blame CART. And CART will lose many US fans.

(CART is in the 'right' since RA is not making the required payments)

[The Snout]

Good on Cart. If Elkhart want to go IRL there's not going to be anything Cart can do once they are out of contract. If Elkhart are in breach on a matter Cart should pursue them, popular or not. All Cart can do is work with it's tracks and come to a win-win situation with them when putting on events, if Cart has worked with Elkhart and Cart want a event there but they don't then it's sad for Cart but their's nothing that can be done about it.

I also think fans are smart enough to know what the story is.

[Jordi]

Let's say that without CART, many people wouldn't even know Elkhart Lake exists....

[Jay]

I'd say without Cart nobody outside of racing would have ever heard of the track... Although honestly, even with Cart... I'm not sure too many have. It's a drivers favorite, and it's had healthy attendance, but in the big picture it really is one of Cart's more minor events.

[The Snout]

Some more information coming to light....
----------------


Here is a synopsis of the .pdf file that has been released.

Facts from CART's point of view (synopsis)

7. Jan 7, 1999 Sanction Agreement (SA) for races in 1999, 2000, 2001, 2002, 2003. RA pays CART fees yearly. 2003 fees total $1,750,000 to be paid in 3 installments.

8. Aug 8, 2002 CART & RA amend agreement.

9. RA was to make first payment for 2003 race ($262,500) on or before Jan 1, 2003. RA didn't pay. CART requested RA to state if they are going to honor SA. No response from RA.

10. CART ready willing to run 2003 race.

11. 2002 amendment put $375,000 of the 2002 SA fee in escrow. Under terms of 2002 amendment CART is now entitled to the full amount.

Allegations

Count 1

14 CART & associates will be "irreparably damaged" if RA cancels race.

15 CART is entitled to run the race.

Count 2

16 "In the alternative, under the terms of the Sanction Agreement, failure of Road America to make the first Organizational and Rights fee payment by January 1, 2003 is a breach of the Sanction Agreement. Pursuant to the Sanction Agreement CART is entitled to termination of the Sanction Agreement and liquidated damages in the amount of $1,750,000."

Count 3

18 "CART is entitled to specific performance of the 2002 Amendment by Road America to authorize the release the $375,000 of the Organization and Rights fees payment in the escrow account to CART."

Count 4

20 "In the alternative, under the terms of the 2002 Amendment, Road America's refusal to permit release of the $375,000 of the Organizational and Rights fees payment in the escrow account to CART is a breach of the 2002 Amendment and CART is entitled to damages in the amount of $375,

[Omega99]

I totally agree, Elkhart is one of the best races of the year. It's probably the most demanding all around course for drivers. 200+mph on the straights then down to around 50 on the tightest corner. It really tests the car too.

What I can't understand is how for all of the races in the US, their only getting around 60,000 fans, and in Canada, Australia, Mexico, Europe, and Brazil the series is more popular than ever, with more than 300,000 fans throughout the weekend! And why don't they go back to Rio?

My point really is that in a field of 19 drivers, two are American. This is an international series (unlike the stupid IRL), and maybe it's time Pookey-boy started marketing it like one. Though I realise it's all a matter of money.

CART will never die! I won't let it happen. Who's with me?

[Tailwind]

In my opinion, there are two primary reasons that the attendance at Road America doesn’t match those of the urban races. First, urban races have the advantage of their proximity to population centers. It’s easy to go downtown to a race. Driving 40 or so miles would discourage the casual fan. Those of us here on the forum are a bit more hard core. I will be driving ten hours on Labor Day to go to the Denver race. (And not the two-and-a-half hours it would take for me to get to the IRL Kansas City race.) I read something the other day about a gentlemen that was going to travel from the UK to the Long Beach race. That is commitment to the series!

The biggest issue I see is that the US races don’t seem to be getting promoted like they should. The respective cities promote the urban races. The races outside the US seem to get promoted well in the respective areas of the world. I hope, and believe, that CART has recognized this and is planning on taking a much more active role in promoting the races. If they put their weight behind the issue, I see attendance records broken all year long.

[Snrub]

So why aren't the Elkhart people paying CART? Any ideas? $1.75M is a fair wack of cash, maybe they can't afford to pay CART that amount?

[The Snout]

People talk about traditional races, well racing in the streets is as traditional as it gets. Seen that black and white footage of races in the early 20th century ? All roads wasn't it. Street races have a carnival atmosphere and involve usually the whole area or city at least knowing and participating in the event, which is 3 or 4 days, not just Sundays race. For actual pure racing I prefer a permanent roadcourses, however for a people packing, city involving event it's hard to go past a street race. Fact is a track miles out of town will only likely get a majority of pure race fans, where as a street race gets damm near everyone from any walk of life. I've been to Melbourne F1, Adelaide F1, Surfers, Monaco. And I've seen types there that wouldn't go near Elkhart.

Hope we keep Elkhart, we'll see.

I think only $262 000 is due as of Jan 1 so it's not the full amount yet I don't beleive, but I'm no lawyer.

[The Snout]

More information, a summary as it were
---------------------------------------

Road America Vs. CART: Rumor Control
After having talked with Road America and sorting through the growing rumors and innuendo that is rapidly growing both among the fan community and established sites, and in the absence of any hard information outside of the filed court papers, here's what is actually known:

1. CART is suing Road America for breech of contract based for failure to receive the first installment payment for this year's event.

2. Rumors have surfaced that the suit may be because of RA negotiating with the IRL for an IRL sanctioned road racing event at RA in 2004.

3. Both George Bruggenthies (President of Road America) and Cheryl Barnes (RA Communications Director) have stated that RA is deeply disappointed that CART has chosen to file this suit.

4. Both George Bruggenthies and Cheryl Barnes have also emphatically denied that RA is in negotiations with the IRL. PERIOD.

5. Both are also quite hopeful that things will be worked out quickly and that the CART event at Road America, one of the highlights of their season and one of the most popular stops for the series both with fans and drivers will continue as planned and be a big success.

6. Neither CART nor Road America can discuss the details of the suit as it is pending litigation and obviously, any public statements could come back to haunt them.

7. Road America is the promoter of events at Road America.

8. CART wants to put on their race at Road America as planned this summer.

9. Road America wants to put on their licensed CART event this summer and renew their contract with CART to continue bringing CART to Road America.

From those points the following can be deduced:

1. Rumors that the promoter of the CART event has caused this problem by chasing IRL money are news to both the President of Road America and the Director of Communications, Road America being the Promoter. George Bruggenthies has also gone on record that Road America is not negotiating with IRL management at this time.

2. If the rumor about the promoter defecting to the IRL is true, it isn't Road America, which publicly stated it isn't. This means that either another promoter of another event(s) is the one the rumor refers to or the story is a smoke screen to "spin the story" for someone's benefit.

3. As both sides seem to want the event to go forward, neither would apparently benefit from it not, and there have been talks going on for some time to finalize the written agreement over this year's event, the suit is probably about the most simple of things, money.

4. The most plausible dispute over money would probably be over those "Verbal Agreements" and negotiations for next season's race event.

5. No one from CART or RA is going to be able to say anything publicly that has not been approved by their lawyers first about this situation, or until the matter goes to court. The court date, by the way, could be a while depending on the current docket, so there will, in all likelihood, be a settlement before too long, if for no other reasons that to end a growing amount of bad press and push on with preparations for August's race event.

[macdaddy]

Thanks for doing the legwork, Snout.

[indycool]

Good posts and good thinkin', Snout.
300,000 fans at all those places, Omega?
I've read everything I can about this suit, too...a few things:
1. The Road America date for '03 has been a nightmare. Road America and ALMS set a date, then months later, CART came out with a ragtag schedule that forced back-to-back weekends. Road America's CART date has NEVER been traditional, having been moved back and forth between July and October throughout history. Then CART switched Elkhart and put its date on Brickyard 400 and Oshkosh Fly-In weekend (make no mistake, the Oshkosh deal is HUGE, the world's biggest air show). That switch also had the element of putting Mid-Ohio on Kentucky's IRL date. CART and Mid-Ohio switched that recently, CART not announcing it and Mid-Ohio throwing it immediately up on its website to let its fans know what was going on.
2. Agree with Snout. Possibly the escrow money has been in dispute for some time because of some deal that was made last year after the promoter revolt.
3. After Portland got its deal with CART changed (so that CART is SOLE promoter in '03 on a one-year basis), certainly Road America, Mid-Ohio and Laguna Seca would be looking to do something similar.
4. We have seen CART's pleadings and allegations. We have not yet seen Road America's responses.
5. AR1's reporting that Montreal may move to Aug. 24, Mexico City to Sept. 14 and Miami to October, Estoril looks out and who knows what's happening with Chicago. It's Feb. 13. CART and RA in court makes it very unlikely that a firm '03 schedule is anywhere close. It's an ongoing mess.
6. Since TG said in his "State of the Sport" speech that the IRL is not going road racing in the "foreseeable future," IRL and Road America have both denied any action with each other and CART's filing makes no mention of it, it leads one to think strongly that TG and the IRL aren't even interested bystanders in a dispute over money between CART and Road America.

[Jordi]

It leads one to think that, but many things have been denied and have happened later, indycool. Who knows how much TG can foresee in his foreseeable future? Maybe he only sees until next Saturday....