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Racing Into the Future

With ownership change pending for CART, outgoing chief says group should merge with IRL.

October 28, 2003|Shav Glick | Times Staff Writer

Chris Pook, for a few more days the head man at Championship Auto Racing Teams, says without a doubt that CART and the Indy Racing League should end their disagreements and unite as a single open-wheel racing organization.

But he quickly adds that it's not going to happen very soon, and, consequently, CART must push ahead.

CART will make its last push of 2003 -- and its last push as a publicly owned corporation -- Sunday at California Speedway, where the King Taco 500 closes a largely unsponsored season. Before the 2004 season starts, CART will have new ownership and possibly a new name. A holding company, Open Wheel Racing Series LLC, is expected to be approved as CART's new owner sometime next month, after a vote of stockholders.

When accomplished, stockholders will receive 56 cents a share on their investments. Four years ago, CART, with its MPH ticker symbol on the New York Stock Exchange, was trading as high as $28. When Pook took over Dec. 18, 2001, it was still at $15.70.

CART has no title sponsor.

Paul Tracy, who drives the car that won the championship Sunday in Australia, has no sponsor.

Gone is the more than $80 million CART used up during the year, partly to finance enough teams to field a minimum of cars, a luxury Pook said cannot happen next year.

So why would anyone want to buy CART, even at 56 cents a share?

Pook, who proved his promotional genius when he started the Long Beach Grand Prix and made its success the hallmark of street races throughout the world, remains optimistic about its future.

"We are remarkably positioned for delivering our product for the sponsors to the market in a diminishing world," he said.

"What sponsors?" he was asked.

"You'll see, when the new ownership is in place. There are some important people ready to step up and make decisions that are necessary for survival.

"We had racing men running CART for years who were more concerned with their own agenda than with the good of the organization. There was continual bickering between management and certain members of the board. Because of that, there was an inability to meet the needs of the major engine manufacturers, and you can't run a racing series without them.

"The new owners are businessmen first, racers second. They know what a bottom line means, and it will show."

The new owners-to-be are Jerry Forsythe, owner of Tracy's Player's Forsythe Racing car, which was left unsponsored when Player's had to pull the plug because of Canadian tobacco-advertising regulations; Paul Gentilozzi, former Trans-Am driving champion and owner of Rocketsports Racing; and Kevin Kalkhoven, who recently joined the racing fraternity as a partner to Craig Pollack in PK Racing.

"There won't be as many surprises for them when they take over as there were for me," Pook said. "When I became CEO, we found a surprise a day. Open a new drawer, another problem popped out. The big thing in their favor is that they are taking the company private.

"I am firmly convinced that the day [then CEO] Andrew Craig took CART public, it was the day it started downhill, headed for a train wreck. The problem for years after that was that nobody was paying attention to business."

One by one, CART's stars and stout defenders -- first Roger Penske, then Michael Andretti, Chip Ganassi and the major engine manufacturers, Honda and Toyota -- left for the IRL and its Indianapolis 500. With them went financial support from sponsors such as Marlboro, Motorola, Federal Express and the engine makers.

The shift from public ownership to private could save as much as $2 million, estimated Pook, in accounting and clerical work involved with running a public corporation.

"Everything you do has to be laid out where the public can see it," he said of public companies. "But when you're private, you don't have near as much paper work and all that scrutiny.

"CART has produced a pretty dismal product the last few years -- 1997, 1998, 1999, 2000, even last year it was not all that good. But we fixed that. Look at our attendance this year, it's up most places we've been."

Crowds have been huge outside the United States. In Mexico City, there were more than 200,000. Sunday, in Australia, the crowd was 108,100 despite rain that ended up shortening the race. Three events in Canada averaged more than 150,000 each for three-day weekends.

Pook said he planned to remain as a consultant when the switch is completed. According to Autoweek, he will receive "between $264,000 and $488,000 over three years."

"My mission is complete," Pook said. "There has been a slow, downhill slide that I would have rather not had, but we have established stability and restructured the company to go private. We have a sensible schedule (still unannounced) and sponsors coming (still unannounced), the teams (only some announced) are stable."

Pook said his biggest contribution to CART was insisting, "We have to take the product to the market, and not the market to the product."

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