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Tuesday, July 18, 2006

SELF-INFLICTED WOUNDS

I was present when promoters of a proposed Champ Car street race tried to begin their presentation to a subcommittee of the Phoenix City Council with a video run off a laptop. Unfortunately, the file froze within seconds, bringing the show to a most abrupt end. That could happen to anyone, but it did symbolize the problems of both sides in this overly contentious local issue, which is a case study for motorsports businesspeople nationwide.

Briefly: Dale Jensen (a powerful figure in the Arizona Diamondbacks ownership) and Bradley Yonover want to stage a race next year as part of their $300 million downtown redevelopment plan that would include an entertainment district. The opposition has been led by Bryan Sperber, president of Phoenix International Raceway. All three were at the May meeting, along with Champ Car owner Kevin Kalkhoven, CC prez Steve Johnson and Jim Freudenberg of Sutton Motorsports Productions, the Denver-based company hired to organize the event. Looking out into the audience of maybe 40-50, though, one Councilman observed the race represented a “full-employment program for lobbyists.”

Maybe that was the problem. For while plenty of hired guns were sitting there, running up billable hours, neither group had anyone present with an immediate historical or institutional knowledge of the situation. Opposition research, as my political friends like to call their digging (full disclosure: I’ve done it myself), has its place but in this instance nobody was prepared enough or nimble enough to think on their feet and respond with some very basic facts. The lobbyists knew their way around City Hall but were lost when it came to the Business of Racing.

Here are some of the key selling points made by the proponents:

1. The event would focus “maximum media attention” on the Valley of the Sun.
2. They expect 3 ½ hours of network television coverage for the main attraction and 20 total TV hours.
3. CC has a history of successful downtown street races.
4. Corporate sponsorship would be a boost for the local economy.
5. A “green” theme would be created with educational exhibits about solar technology.

I’m professionally neutral on the race but these were big eye-openers for me. (I got no indication the Council members or their staff knew any better.) Here are some key counter-points that could have been made, but weren’t:

1. Since the prospective date conflicts with the NASCAR Nextel Cup “Chase” finale, virtually every major motorsports journalist would be at Homestead-Miami Speedway.
2. CC’s typical time-buy is no more than 2 ½ hours and, even if qualifying and support races were placed on a cable network, anything close to 20 hours would be unprecedented. The series is audience challenged, with even the showcase Long Beach Grand Prix achieving a dismal 0.6 Nielsen rating (634,000 households) last April. Further complication: The sports media king NFL season would be underway and interest in the Arizona Cardinals is at an all-time high because of a new stadium and USC superstar/celebrity quarterback Matt Leinert.
3. While Long Beach, Cleveland and Toronto have endured over the long-haul, many more have not. Miami gave it a go in three different locations and Detroit two. Only Long Beach truly helped spark a meaningful downtown redevelopment.
4. Team depth is thin and corporate participation is weak. The very day the Council met, USA Today ran a Page One cover story on Paul Newman’s racing passion, and the article noted Newman has to help fund one of his cars out of his own pocket because there is no sponsor. Even Paul Tracy, probably CC’s most recognizable driver, doesn’t have a sponsor so owner Gerald Forsythe puts the logo of his own business on the sidepods.
5. The series has no “green” tie-in. At least the IRL has an environmentally-friendly connection via Ethanol.

Phoenix’s status if Champ and Indy Car merge also went unaddressed. On the other hand, so did the recent string of IRL disappointments at PIR. Jensen told Council he wasn’t asking for subsidies. Yesterday, the Arizona Republic opinion page reported “Jensen puts the initial cost of organizing the event at $15 million. He would seek to recover part of the cost from sales-tax receipts generated by the event.” (Republic editorials have criticized PIR’s stance: “After weeks of harsh rhetoric and accusations, this is shaping up as an expensive turf war over the auto racing market in Phoenix. And that's not nearly a good enough reason for the Phoenix City Council to put this proposal on hold.”)

One can only wonder why Sperber didn’t take advantage of the gift of a factual hanging curveball in the middle of the plate and smack it outta here! Rather, he focused on the governmental approval process, and after saying his representatives were excluded from a public meeting, implied things were happening in “secret.” That clearly irritated the Council members, who voted to authorize staff to continue due diligence with the promoters.

Afterwards, I spoke with Johnson and Freudenberg, both of whom were bleeped-off – and made more determined – by Sperber’s description of Champ Car as “minor league.” No surprise. There was, however, a final disappointment. I was introduced to a PIR lobbyist, who asked my opinion of what had just happened. When I told him anyone with historical or institutional knowledge about the Business of Racing easily could have run-over either side’s talking points, he laughed.

Twenty-five years ago, Roger Penske told me self-inflected wounds are the worst and most painful. The featured actors in the Phoenix race melodrama have verified the truth of that statement. I’ll have more on this in two days.

[ more Thursday . . . ]