IRL doubles OWRS' bid for CART

[Dov]

From Indystar.com: http://www.indystar.com/articles/6/114498-9576-037.html

IRL doubles competitor's bid for CART
Judge will decide open-wheel racing series' fate Wednesday.

By Curt Cavin
curt.cavin@indystar.com
January 24, 2004

The Indy Racing League offered $3.3 million for selected assets of bankrupt rival Championship Auto Racing Teams, according to several sources with knowledge of the bid.

The offer was double the amount offered by the Open Wheel Racing Series group last month, the only other bidder to emerge before Friday's deadline.

Judge Frank J. Otte is scheduled to choose between the offers Wednesday in U.S. Bankruptcy court in Indianapolis. The hearing is set for 9:30 a.m.

IRL spokesman Fred Nation said the assets on which league president Tony George bid were similar to those bid on by OWRS. The difference was the IRL is seeking only one of CART's races, the Grand Prix of Long Beach, the most successful event in series history. Nation said the IRL is confident it can acquire some of CART's other races on its own.

"The hard items we bid on were the same (as OWRS) to make it easier for the judge to compare apples and apples," Nation said.

No other bids were received by Friday morning's deadline. The Grand American Road Racing Series had considered a bid, but its officials opted to pass.

George, who is also the president of Indianapolis Motor Speedway, started the Indy Racing League in 1996 as an alternative to CART. The two series have competed for fans, sponsors, drivers and racing teams.

OWRS co-owner Paul Gentilozzi said the primary items in the IRL's bid are the Long Beach race and the Ford engines used by the champ-car racing series.

The latter is significant because the IRL has contracts with engine manufacturers Honda, Toyota, Chevrolet and Cosworth, a wholly owned subsidiary of Ford. If the IRL prevails, champ-car racing wouldn't have engines in place in time to stage the 2004 season.

Long Beach officials were one of three creditors to officially file an objection with the bankruptcy court Friday. The others were 88 Corp., a company owned by the International Speedway Corp., and the promoter of CART's race in Australia.

Both the IRL and OWRS will have the opportunity to revise their bids before Wednesday's hearing.

"It's clear what (the IRL's) intentions are when you look at which assets they want to purchase," Gentilozzi said. "They just want to kill the series by taking the engines and cherry-pick Long Beach.

"If you can do that and take away your competition, I guess you try to do that. But it won't work."

George declined to comment Friday, but he faxed a statement to IRL teams, sponsors and promoters to highlight his reasons for pursuing key assets of CART, which last month filed Chapter 11 bankruptcy.

"If we are successful with our bid, our intention is to work quickly and effectively to create a unified, market-driven North American open-wheel series," he wrote. "We believe there is a window of opportunity right now to accomplish this."

The IRL's offer seemed low, according to one of Gentilozzi's partners, Kevin Kalkhoven.

"Not so much the dollar amount, but because the offer doesn't take into account any of the liabilities, which will run in the tens of millions of dollars (if the series doesn't continue)," Kalkhoven said. "Those are critical concerns, so it doesn't matter how much money you put up if it all disappears in liabilities."

The IRL's bid will be reviewed by members of CART's creditors' committee. Walker, a race team owner and member of the committee, said it will meet this weekend to discuss the two bids. He said the judge will have the option to make his own selection.

"Either way, I'm personally disappointed by what's happened," said Walker, who was one of CART's board of directors when the company lost $78 million through the first three quarters of 2003. "This (auction) doesn't really help anybody in the long run.

"I guess the judge is going to decide if we're going to have one series or two series."

Otte declined comment through a representative Friday.

[Jay]

Walker is right, it's not helping anyone...

OWRS, time to see your next hand...

[GP Racer]

Originally posted by Dov
[
"If we are successful with our bid, our intention is to work quickly and effectively to create a unified, market-driven North American open-wheel series," he wrote. "We believe there is a window of opportunity right now to accomplish this."
[/B]

Hatred for TG aside, isn't this what we have wanted all along?

:confused:

[Jay]

Depends, if it doesn't have a signifcant(50% at least) road/street racing component, then my answer is no... if it does, then I'm listening...

[Dov]

Yeah! What Jay said! LOL

[Testure]

Hadn't thought of it before, but it might be interesting to hear what Ford think of this. Anyone know?

[GP Racer]

Originally posted by Jay
Depends, if it doesn't have a signifcant(50% at least) road/street racing component, then my answer is no... if it does, then I'm listening...

I'm sure at the beginning it won't be 50/50, as it would be basically impossible legally, logistically, and all of that.

But eventually I believe it would come close, but probably always a few more ovals, because TG himself has said the pressure for him to go road racing has been tremendous.

[MLM]

That's what I was thinking, too...maybe not 50/50 the 1st year, but more would be added on in time.

You know, I'm still confused about teams and personal. Are they any part of the bids or are they all, in a sense, free agents? COULD some of them go either way and choose in which series they would participate?

I know I am asking a lot of questions but I'm still unclear about what could/will/might happen (although, I'm starting to get a clearer picture from what I've seen here and at Track Forum...thanks )

[Jay]

I think if the IRL will go where the money is - and that's not some of the small ovals they run at now. It's the street races. So, I imagine he'll dump his more pathetic events and take the cream of CART's if worst should come to worst.

I don't think this over by any means though, OWRS has the opportunity to up their bid, and I'm sure it's well within their means to beat the IRL's current offer.

[Testure]

MLM - TG is just bidding on the right to hold an open-wheel race in Long Beach and on the Ford engines (I guess so he can give 'em back?) The OWRS guys raise an interesting point about the liabilities - surely no CART series in 2004 is going to breach an awful lot of contracts??? We hear a lot about George's cash reserves, but he's not that rich in the scheme of things.

The teams are free to go and do what they like, but they can't all go to the IRL. Some won't be able to raise the money to buy new cars. Some will have sponsors who aren't interested in the IRL (thinking of Mexico here...) If TG ends up as the only fish in the puddle, it'll be pretty interesting to see what happens to all the current CART teams/drivers/mechanics/personnel/etc.

[Ac.]

Originally posted by Testure
The teams are free to go and do what they like, but they can't all go to the IRL. Some won't be able to raise the money to buy new cars. Some will have sponsors who aren't interested in the IRL (thinking of Mexico here...) If TG ends up as the only fish in the puddle, it'll be pretty interesting to see what happens to all the current CART teams/drivers/mechanics/personnel/etc.

This is definitely something that cannot be ignored. CART has a larger fan base outside of the United States than within. Long Beach is the only US Champ Car race that has a chance of making the top five when it comes to attendance for CART events.

If the IRL is successful in it's "reunification" plans, fans in Mexico, Australia, and likely some parts of Canada will be left without a race. By my count the attendance at the six races in these countries accounted for nearly half of the total attendance for CART last year.

Since F1 is not serving these markets, and the IRL surely won't, I forsee OWRS forging ahead with these markets as their new base regardless of the court outcome.

If OWRS does succeed, expect to see them begin to trim events that are not profitable(see Fogelhund's posts in various threads for details on this), and continue to build a fan base outside the US.

Open wheel racing may be dying in the US, but there is plenty of room around the world for both F1 and CART.

[macdaddy]

That's why I'm still surprised that Bernie didn't show up. I had a gut feeling that he'd be interested in LBeach.

[GP Racer]

Ac, I believe its that attitude, going international, and ignoring your US fan base, that put CART into this situation in the first place.

Somehow, I can't help but think that Bernie, in all his majesty, could still walk into this situation and buy up everyone, and be done with it!

[gttouring]

holy smokes!!
IRL is realy getting down with this
hopefully they will allow a phase in of the merge, and allow Champcars to fight one more year as they do so...if this actually happens

[Fogelhund]

OWRS would be well advised to be beating the street for engine alternatives right now. IF they can come up with anything near an alternative engine, that will fit in their cars, they are absolutely laughing.

Forget about outbidding TG. Let him have Long Beach. We all know he was going to get it at some point anyway.

Now OWRS can start from scratch, no liabilities from CART, and obtain new contracts at all the tracks that make sense from a dollar perspective.

TG spends 3 million plus, to get a track he would have anyway in a year or two, as well as some Ford paperweights.

OWRS continues on their merry way, has a series in 04', using a more cost effective schedule.

All they have to do is find some engines... pretty easy huh? Well ok, the engines might be a bit tough to find... BUT - how about some 3.0 litre F1 engines? Ford already supplies 3 teams in F1... perhaps more can be built.. or.....

TG is not likely unifying Open Wheel Racing here, he played the wrong cards.... unless the bid is changed by Wednesday to take everything.

[macdaddy]

I remember that Bridgestone publicly announced that they would support CART/OWRS in 2004, but I can't recall anything from Ford.

Everybody seems to enjoy starting petitions - somebody oughtta start one to Ford and Cosworth! Heck... Mazda, Kia, anybody!

[GP Racer]

Fogehund, exactly how small would a cost effective schedule be anyway? I mean if its to small, will anyone care? What about TV, which is the way 90% of race fans see there races? Spike TV isn't going to cut it. Can a small series make enough money to survive?

There are alot of questions that would have to be answered about starting all over again at this point. The market place has changed, and I don't believe that a small series can make it anymore.

[Fogelhund]

Who said anything about small?

A couple less events yes, it is possible to reduce travel costs quite a bit.

Remove a couple of the self promoted money losers.

Spike TV is in more homes then Speed TV.

It isn't about making enough to survive, its about not losing too much.

[DaveOrama]

From an Australian perspective, it has been great having CART racing at the Gold Coast for the last 12 years (I think). While the series has been losing impact in the States from a reduced fan base, it has also been happening here.

Last year for the first time CART allowed another series to share equal billing at the Gold Coast event, and to be perfectly honest, most of the crowd was there to see the Australian V8 Supercar Series. Still, it is a great event, but it seemed to me CART and the drivers lost some of their relevance.

If they can keep the series (and I hope they can) going who will be interested....

[Snrub]

Originally posted by GP Racer
Hatred for TG aside, isn't this what we have wanted all along?

I don't hate TG, then again I don't particularly like him. Then again I don't really like Penske or Williams for that matter, but I don't have a problem with them existing. Exactly what has been proposed by the IRL side that would 'unify' open wheel? There's not much left of CART to 'unify'. What's left of CART has little to do with the original participants in the split. It's about TG killing competition and taking over things he'd like to have.

[GP Racer]

Snrub, CART was already dead after the 2003 season.

This is now an open bid, where anyone, not just OWRS can file. So I'm not sure you can say TG is killing the competition, when it's already dead.

From what I've heard, he was offered the CART series a few times in the past, but he steared clear, which at the time was probably the right thing to do. I only recently learned that from an article by Ann Proffit, and I was quite surprised by it. But now, how could you reasonably be upset with the guy for placing a bid, on whats left?

[Snrub]

He was offered CART in the past? Care to link the article? I find the concept pretty tough to believe. Seeing how CART was only in true danger in 2002 and 2003, why would they offer control to TG? It doesn't make sense.

I'm not sure if you're quibeling over the technicality of the name of 'CART'. While the company is dead the series is not. Would you not agree that OWRS baring the IRL buying out stuff, would run something in 2004? If TG is not interested in killing CART, then what plans does he have for the Ford contract to supply 2.65L turbocharged V8 engines? For all those who've been under a rock, they're already lowering the power and displacement of their engine to 3.0L and have 3 engine suppliers.

[GP Racer]

Check WWW.motorsport.com in the IRL section. Look for an article by Ann Proffit, dated I believe yesterday. I was shocked to hear that to.

Could be to sell at a profit?

[Hazza]

...please make the hurting stop...

[Flatspot]

Everyone is talking as though the IRL has won the auction. I wouldn't jump all the way there yet. Let's see what unfolds on the 28th.

GP, placing my hatred for TG aside, the answer to your question is NO this isn't what I (if "I" can be included in "we") wanted all along. Open wheel racing has been beaten down, stepped on for a miriad of reasons and no matter which way we look at it the cars are not what they used to be, my mother couldn't name a single driver in either series, no one watches on TV and the big sponsors are with the tin tops. Are you sure that's what you wanted?

Re-attaching my hatred for TG. The only thing good to come from this is the proof that TG's all oval, complete BS idea was stupid from the word go and that open wheel cars need to turn right to create value.