New Canadian Team in 2005

[TedN]

Good News

BTW, here is an piece on Jensen from last year. It explains his approach to motorsports and sponsorship. The article is archived so no link is available.

Ted

Saturday, August 23, 2003
Two roads to take to make racing pay
Investors need to see solid returns
Motorsports costly sport for hopefuls
Big leagues are costly for hopefuls to compete in Potential investors need to be able to see solid returns
by Norris McDonald
Toronto Star


In 1975, David White of Oakville won the Canadian professional Formula Ford championship driving a Lola. Carl Haas, now one-half of the Newman-Haas CART team but back then just a guy who had the franchise to sell Lolas in North America, told White he had the talent to move up to Formula Atlantic.

All he'd need was $100,000 to pay for a season.

"That request for $100,000 was like asking me for a million," White said the other day. "There was no way I could come up with that kind of money.

"So that was it as far as my racing career was concerned. I got so far and I didn't get any further. A lot of guys with talent will tell you the same story: unless you have a rich father or a rich uncle, you're not going to go anywhere."

There is some validity to this complaint: in just about any series in the world, including Formula One, there are drivers who have no business being out there. But the bottom line is that they either had that rich daddy or else they realized early on that big league car racing costs a fortune, and they went out and found the moolah.

In short: money talks, everybody else walks.

So how, in 2003, does one go about getting that kind of big money?

Here are two ways- one theoretical, the other practical.

David White has a 23-year-old Formula Ford driving son, Matt, who he thinks has the right stuff to advance to the CART series.

He would like to attract a group of investors- people who have the money to play the stock market- to invest in his son's career. The key would be to raise $5 million through a limited joint-venture partnership.

The $5 million would be spread over three years: $250,000 (U.S.) for a season in Fran-Am (a Ford formula series), $1 million (U.S.) for a season in Formula Atlantic and $2.5 million (U.S.) for a season in CART.

The rest of the money would go to pay the exchange rate and to pay Matt a living during the three years.

During those three years of Matt's apprenticeship, the investors would not get a return on their investment, but would be able to write off some of that money on their income tax. Their return would come when Matt becomes a paid- rather than a paying- driver.

From the moment Matt signs his first contract until his career ends, his income from wages, winnings, endorsements, personal sponsorships and so on, would be divided 50-50- 50 per cent for Matt and 50 per cent to be split up among the investors.

Now, as we all know, speculating on anything is a gamble. But I have friends who have been laughing all the way to the bank for 25 years because they took a chance on a little something called Trivial Pursuit.

An investment in Matt could prove disastrous, of course. The money would be lost if he was unable to advance. On the other hand, if he turned out to be another Paul Tracy, the returns could be handsome.

There are, apparently, syndicates supporting the careers of some European racing hopefuls exactly this way. Justin Wilson, the Formula One driver now employed by Jaguar, was able to finance his ride with Minardi in a similar fashion.

David White thinks that if there are overseas investors willing to take a chance on a budding Michael Schumacher, there just might be Canadians interested in a similar venture.

On the other hand, Eric Jensen, who owns a successful two-car team that runs in the Toyota Atlantic series, is convinced that the only way people or corporations will put money into auto racing is to guarantee a healthy return on their investment immediately- not three or four years down the line (if then).

To cut to the chase on this one, Jensen is sponsored by Starwood Hotels (which owns the Westin and Sheraton hotel chains) and he has- in return for their sponsorship- drummed up more than $10 million in hotel room business for them in the past three years.

Jensen is a team owner, race-car driver, public speaker, host, race-track guide and promotions and public-relations adviser. He attracts business to his company, Starwood Team Jensen, by offering himself up as a complete package.

His presence is in demand these days away from the circuits because he is a race driver (and can talk about that), a team owner (he knows a lot of people in the sport) a businessman (who can talk about growing a company) and an enthusiastic guy (who can talk about- well, just about everything). For example, the Tourist Board of Montreal had him in recently to address a group of event planners, and he was hired to guide Rob Walton (Mr. Wal-Mart U.S.A.) around the Grand Prix of Monaco.

"We will have $2 million in revenues this year," he said earlier this week from Newcastle before leaving for Montreal and the Molson Indy races this weekend. "I expect we will be taking in between $5- and $10 million in the next two or three years. The growth potential is there and if I don't reach that target, I will be quite disappointed."

Unlike most drivers in the Atlantic series (their race goes later this afternoon at Ile Notre-Dame), Jensen started late. He's 33 now and didn't actually start racing until he was 20. And even when he started driving, it was as a means to a business end. He had (and has) no ambition to become world champion.

"I grew up around race tracks," he said. "My dad is Bruce Jensen, who raced in the Atlantic series back in the '70s.

"I'll be honest, I wasn't a big fan of car racing at that age- 5, 6, 7- because I was afraid that my dad was going to get hurt. I didn't like it because of that. I was 12 when I heard that Gilles Villeneuve had died and it really affected me. My dad had raced against Gilles."

As he got older, however, Jensen realized that auto racing had a wonderful commercial potential. "I'd gone to the (University of Toronto) to study finance and economics and was interested in going into business. I knew car racing (by this time, he had taken a race-driving course) and I understood the basics of sales and sponsorship."

Jensen says there are four ways car racing and corporations can make a commercial sponsorship work:

Branding: "PaySystems Corp. is one of our sponsors this year. They are a credit-card processing company and are interested in name recognition. A race-car sponsorship is not much different from a 30-second TV commercial in a major market except that with the race car their message is in 12 markets rather than one. Also, and this is important, if their name is on a major-league racing car, which is not inexpensive, they will be perceived by other companies as being big enough to do business with."

Promotions: "Take the Molson Indy Toronto. They get 180,000 people there over three days. Starwood Team Jensen gets a marquee location at the track for promotion purposes. Columbia TriStar worked with us to promote Men In Black two years ago. Right now, we're creating a contest for Westin where the winner will win a trip to a race."

VIP Guest Hospitality: "If you buy a Gold Partnership with Starship Team Jensen (for $185,000 Canadian, by the way), you receive, in addition to the brand signage on the car and the property for promotions and marketing, 15 pit passes with VIP hospitality at every race.

"This way, you can take your important clients right down to where the action is. If you take someone important to a box at a Leaf game, you're with them for three hours; if you take them to a box at a car race, you're with them for three days. Which do you think is the greater value?"

Business to business: "Racing is a high-end sport, so it attracts corporate support and the people who come to the races are usually the top guys at those corporations. Put them together and big things can happen."

With Jensen being so involved in the business side of things, it's not really surprising that if his presence in the cockpit proved to be an impediment to the growth of the company, he would be out of it like a shot. "I'm not out there to put my life on the line," he said. "I'm out there because it's my company and I'm the front man.

"Racing is my business; race driving is not."

[StickShift]

I guess he'll be using one of the old Reynards... And it's going to be a shoestring budget operation like his Atlantics effort... It's good that Cart has another car for a few races, but let's face it, it's probably going to be the slowest team Cart has had for years.

[luke]

Patrick Carpentier the driver?

[Kicking-back]

No!

It's only for five races anyway.

But welcome none-the-less.

[BootsOntheSide]

I'm sure Pat would take a full-season drive above this, especially as the driver here would probably have to bring funding. Realistically, teams that plan to enter a car or additional cars for partial seasons rarely happen, so I'll believe this one when I see it.

[Dov]

This is excellent news and let's hope it leads to a full season in '06. If things don't workout for Michael Valiante at Walker Racing next year then maybe we'll see him driving for EJR?!

[StickShift]

For a driver like Valiante, taking a ride at a team like this would be counter-productive for his career.

[Snrub]

Another great link and article Ted, thanks.

The writer of the TO Star article insists there will be a Vancouver Indy in 2005.

Keep in mind that Jensen is saying they'll do "at least" 5 races. Who knows, things might work out and they'll get more. Slowest team ever? We've had Mazzacane and Spirafico drive.

[StickShift]

Mazzacane and Sperafico were both driving for competent teams.

--

Eric Jensen couldn't even run an updated Toyota Atlantic car the past couple seasons. What makes you think he'll run a good champ car team?

The only car he'll be able to afford is a dilapidated Reynard. The rest of the field (Yes, including Walker if all goes to plan) will be running Lola's.

If a commendable team like Walker is half a second off the Lola's, how will a downright ****ty team do running Reynards? We're talking seconds off the pace imo.

[Dov]

Originally posted by StickShift
For a driver like Valiante, taking a ride at a team like this would be counter-productive for his career.

Where would you suggest Valiante go then if he doesn't get a ride with DWR? Would it be more productive for his career -IF- he could find a ride in the new Superfund Euro3000 series, GP2, World Series of Renault or ALMS ???

[Kicking-back]

Valiente in something like GP2 would be worthwhile.

[Dov]

Maybe MV would race in GP2 if F1 had some interest in him somewhere down the road, but think about how many amazing (young) open wheel drivers there are without rides in F1. Wirdheim, Bourdais, Wilson, Pantano, Luzzi, the English test driver for BAR (can't think of his name right now), Ralph Firphman, etc., etc.!! IMO, it would be better if Valiante stuck around North America for the time being and keeps on fighting for a permanent CC ride.

[BootsOntheSide]

I'm not sure how he'd get a GP2 ride anyway. The current F3000 series has only had a few non-paying drivers each season, GP2 will be even more expensive, and the organisers are plannign to announce all the entries at once, reducing the chance of non-racing companies offering sponsorship packages this year. Also, the series' cars will have to be a lot more like F1 cars (than the F3000 ones were) for it to be valued by F1 bosses. Anythign below GP2 is a big risk, he could all too easily fall inot oblivion. Unfortunately, Michael is in a difficult position if he can't get a full-season with Walker.

[GTRMagic]

But wasnt this kind of thing part of the CART dream from yonks ago, a couple of smaller operations running cars at selected rounds, originally to get experience/testing for the Indy500, but also a possible precursor to a full time gig in the series?

Would it be competitive? Probably as quick as the DCR cars.. but it does pad the field, and may actually unearth a new talent from somewhere... or not.. but if you dont try you dont know

[codename_47]

Originally posted by GTRMagic
But wasnt this kind of thing part of the CART dream from yonks ago, a couple of smaller operations running cars at selected rounds, originally to get experience/testing for the Indy500, but also a possible precursor to a full time gig in the series?

Would it be competitive? Probably as quick as the DCR cars.. but it does pad the field, and may actually unearth a new talent from somewhere... or not.. but if you dont try you dont know

I agree....all this shows is that people are seeing the series as a good place to migrate to...

Which makes a change on the last couple of years, anyway!

[StickShift]

Trust me, it's going to be Ross Bentley 2.0

[Dov]

Originally posted by BootsOntheSide
Also, the series' cars will have to be a lot more like F1 cars (than the F3000 ones were) for it to be valued by F1 bosses. Anythign below GP2 is a big risk,

Actually, the new SuperFund Euro3000 series (the one starting in '05) technical package will be closer to that of F1 then the GP2 series. That being said, the GP2 series will be known as the 'official' stepping stone to F1 and they will follow the F1 circus around the world.

[Ac.]

Originally posted by GTRMagic
But wasnt this kind of thing part of the CART dream from yonks ago, a couple of smaller operations running cars at selected rounds, originally to get experience/testing for the Indy500, but also a possible precursor to a full time gig in the series?

Would it be competitive? Probably as quick as the DCR cars.. but it does pad the field, and may actually unearth a new talent from somewhere... or not.. but if you dont try you dont know

Exactly right GTRMagic, and all the better if Jensen can keep up with DCR - Servia is starting fifth for Coyne tomorrow in Mexico City!