• UNCONVENTIONAL WISDOM:

Tuesday, February 26, 2008

2 BILLION DOLLAR BLUNDER

Finally, some GOOD news from the American open-wheel racing front.

And, common sense.

The end of the IndyCar-Champ Car split, announced last Friday, closes of one of the most disgraceful and destructive chapters in modern sports -- and business. The zig-zagging paths taken by Tony George and his advisors, and a succession of inept Champ Car owners and executives, were mistakes of monumental portion.

(Full disclosure for those who need it: I was CART's first full-time communications director, for three years, beginning November 1980. The second full-time employee, after Kirk Russell.)

How great the cost? Let's start with money. Since I'm in Arizona, where Barry Goldwater still towers over John McCain as the state's favorite political son, I'll give a very CONSERVATIVE estimate.

At least $2 BILLION.

That figure includes lost sponsorships, advertising, hospitality and ticket sales; failed races (Phoenix, Las Vegas, Denver, Orlando, Dover, Atlanta, Gateway, Montreal, New Hampshire, Charlotte -- the list is longer than the free lunch line in any media center); design, construction and purchase cost of different spec cars and spare parts; massive outlays by competitive engine manufacturers; lawyers; accountants; shareholder value (when Champ Car went public and then bust); Welfare-like payments to teams from the sanctioning bodies; expense for Bridgestone/Firestone to support two tours; eliminated jobs; unsold souvenirs; belly-up specialty publications; shrinking broadcast and print audiences; television rights fees reduced or zeroed-out; TV and radio production charges; duplicate series marketing, promotion, ad and PR campaigns; and other adverse economic impacts, especially in the Indianapolis area.

As my friend Paul Page said during a conversation last weekend at NHRA's Phoenix-area event: "Add in return on investment, and it could be serious money."

The cost in prestige, respect and goodwill is beyond calculation.

Proving, once again, the worth of "conventional wisdom," the broad opinion going back to when CART team owners separated from USAC in 1979 was that group would "win" because of superior business skills. That viewpoint carried over when the IRL was created, as many pro-CARTers disparaged George's intelligence and biz acumen, sometimes in highly personal terms. Well, one of the central truths of the CART era is its great businessmen-team owners ran the organization in a way they never would their own enterprises.

Look at the presidents they hired and the competency of the staff. For most of my tenure, the staff was Russell, Knight and one secretary. Chairman John Frasco told us: "This company has to run lean and mean." Then, under Andrew Craig, a bureaucracy was constructed of bowing-to-arrogance yes-people and dunderheads, especially in such key areas as promoter and sponsor relations, promotions, marketing and communications. The combined competency of a large share of that employee list might have been enough to operate a pizza joint in Pawtucket; certainly not a "major" sports entertainment company.

(Now, I feel badly for a couple of good and loyal employees, Billy Kamphausen and Cathie Lyon, who should promptly be welcomed to fill important roles within George's series organization.)

The 1998 move to sell shares was yet another management disaster. Prudent and proper long-term planning was shoved aside in the name of quarterly results.

One CEO who had a clue was Bill Stokkan, who at least knew enough to open a New York City business/marketing office. I'm sure not saying it was done perfectly, but it was necessary. The Board dumped Stokkan and closed down the NYC operation.

Finally, this discussion can not end without mention of the media's role. I'll put it this way: It was not an era of excellence in motorsports journalism.

Far too-many journos took sides in the political struggle and, as a direct result, objectivity went the way of the Offy. Stories that needed to be told, to bring sunlight to dark dealings, went unreported so as not to give ammo to the "other" side.

The best example: Craig's temper tantrum in 1999 at the driver's meeting in Homestead. That this happened was well-known in the media center -- among other reasons, plenty of drivers came out and talked about it -- but no stories. When I asked one pro-CART leaning writer why, I was told, "I would if I thought it would do any good."

Does anyone doubt that if Mike Helton had done such a thing, it would have been instant news?

There had BETTER be a far higher level of professional and legitimate media coverage of the workings -- positive and negative -- within the unified IndyCar Series.

It says loads about contemporary "journalism" when George and the IRL are declared the "winners."

By ANY meaningful or objective standard, EVERYONE LOST. Any other interpretation is as ridiculous as, well, the last 12 years.

And now what? I fall back on this May 2006 column, which took first place in the AARWBA journalism contest:

http://www.valvoline.com/pages/racing/rn_article_viewer.asp?nid=1898

The breathtaking level of ARROGANCE, demonstrated for too long by too many, better stop right now. The first order of business is to get humble -- and that better show this May at the Indianapolis Motor Speedway.

Maybe then, people might forgive, and start to care.
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Here are links to some of my Arizona Republic NHRA stories last weekend, including husband-wife Funny Car rivals Tommy Johnson Jr.-Melanie Troxel; Antron Brown, who has zoomed from motorcycles to Top Fuel; Newsmaker Q&A with Ashley Force; and Funny Car winner Jack Beckman.

http://www.azcentral.com/sports/speed/articles/0221dragracers0222.html

http://www.azcentral.com/sports/speed/articles/0221racingnb0222.html

http://www.azcentral.com/sports/speed/articles/0223nhra.html

http://www.azcentral.com/sports/speed/articles/0224nhranb.html
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Congratulations to John Force, winner of this year's Justice Brothers Shav Glick Award, for outstanding achievement in racing by a Californian.

This is a MUST Biz of Racing read: How Pepsi landed Dale Earnhardt Jr., from Sporting News, via NASCAR.com:
http://www.nascar.com/2008/news/headlines/cup/02/20/dearnhardtjr.amp.sponsorship/index.html

This from the Feb. 22 Entertainment Weekly:

"Far be it from us to burst anyone's bubble, but you don't win an Academy Award on merit alone. Every year, between October and February, studio-employed strategists mount carefully plotted PR campaigns in the hopes of securing nominations and, ultimately, the Big Win. Back in the 1990s, when then-Miramax chief Harvey Weinstein waged infamously aggressive efforts on behalf of his films, those campaigns became a blood sport. In recent years, a sense of greater civility has returned, at least on the surface. Stumping for Best Picture, however, is still a high-stakes game."

[ more next Tuesday . . . ]