• UNCONVENTIONAL WISDOM:

Monday, October 27, 2008

IT's the ECONOMY

I'll be a guest next Monday (Nov. 3) on Racing Roundup Arizona, for the start of NASCAR week here. That will also mark the beginning of RRA's 12th consecutive year on the air. Congratulations to (host) Jamie and (producer) Betsy Reynolds. The show airs 7-9 p.m. (AZ time) on 1310 KXAM radio. You can listen on http://KXAM.com or http://RacingRoundup.com .


NASCAR finally confirmed that Camping World will take over for founding series sponsor Craftsman next year in the Truck series. The announcement pegged it as a seven-year deal. The PR line is the Trucks will deliver "over $100 million worth of exposure."

The key quote was this from Camping World Chairman and CEO Marcus Lemonis. (I've added bold emphasis.)

“With the state of the current economy, Camping World’s main objective is to communicate our brand in the most cost-effective manner and to promote affordable, family fun. Additionally, we feel strongly that this sponsorship will dramatically increase our customer base in experiencing our entire product offering. We expect this relationship to not only benefit the teams and fans, but we will put a special emphasis on supporting the four auto manufacturers in selling more trucks and the Truck series sponsors to yield the same return on investment that we’ve enjoyed. Camping World will work diligently to promote the four manufacturers and team sponsors by positioning them as preferred product providers to the four million RV enthusiasts we currently serve.”

With Dodge already having announced the end of its Truck support, and Ford limited to technical help to Roush Fenway, this is good news -- if it actually happens. And works.

Meanwhile, here are some of NASCAR Chairman Brian France's comments about the economy, during the Camping World announcement Q&A:

"We're off, but only in sort of single digits as it stands now. We tend to fare much better than other industries thankfully. That's because sports are so culturally ingrained to fans. It's one of the last things that they want to not participate in."

"We're fortunate. We are nervous like everybody else. We're taking every precaution we can in terms of getting costs out of our system on behalf of the team owners, on behalf of the track operators. But this is also a time when you can't freeze either. You've got to still be aggressive and still push hard your product."

"I think the number is going to be close to between $80 and $100 million of new money that is predicted to flow into NASCAR from a team sponsorship in '09. Now, that's lower than we've traditionally had as a rate of increase. But nonetheless, with the backdrop of the economy we're living in today, it's fairly good.

"Most of the teams in the Sprint Cup level are well-funded. There are obviously some teams that aren't, but there are always teams that aren't. Some of that is based on performance, not necessarily the economy. So teams that tend to perform consistently well tend to do very well in the sponsorship area as you would think.

"But is it tighter? Are teams looking to be more creative? Sure. Are teams nervous or not hearing from their current sponsors about doing one thing or another thing differently or less? Sure. That's just the nature of it. Every industry is looking around trying to get more value, trying to get more out of something that they're already doing or may do in the future. That's just the nature of dealing with and depending on corporate America to the level that NASCAR does."
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Since I agree with everything Jeff Burton says here, I am just going to reprint his voice-of-reason comments from last weekend at Atlanta:

“Well I think that’s actually in a broader context, if you listen to some financial analysis the mood of the country has more to do with the economy than the economy has to do with the economy. I’m not sure I buy that. I’m not an economist, I don’t know. But it just seems to me that the economy, you can’t ignore it.

“You can’t ignore that people are being laid off, unemployment rates are rising, inflation is rising, stock market its doing what it’s doing, the bail-out and all that stuff. It’s such a big story that I think it would be wrong for us to just act like it’s not happening. More importantly is the people who are buying the tickets, they know what’s happening because they’re the ones that are getting furloughed and their wages are going down. I think that not talking about it isn’t beneficial. I do believe that our sport, as probably most sports, we have a tendency to beat this story into the ground, but on the same token, it is there. It’s not something that we’ve created by any means.

“The only thing that we can do as a sport, in my opinion, is what we have to do, we have to make a compelling reason why people need to come watch a race and why they need to tune into it on television. If we do that, then we’re going to have better days when the economy is good. We’ll have bad days when the economy is bad because I’d venture to say that our sport, if you look at what we race for, what it takes, what it costs us to spend a year to race vs. the purse that we receive, I would be willing to bet that we’re pretty low. The purse is maybe 25 percent, 35 percent at the most of what we have to raise to do what we have to do.

“So we have to have corporate America, if we don’t have it we can’t succeed. So it impacts us, because if the corporations can’t spend the money and the people can’t afford to come watch it, then there’s teams that don’t have it. Ignoring it doesn’t make it go away but I do believe we will beat a story in the ground.”
********************************************************************With the help of this Jimmie Johnson quote, from Atlanta, I hope we've rested the "any publicity is good publicity" falsehood forever. His reference is to the severe NASCAR penalties to the No. 83 Toyota Cup team for rules violations:

"The old saying that 'Any press is good press' is wrong in this respect. When you have that negative press on your team, it does put question marks in people's minds, and that is something that takes a long time to overcome. I've lived it firsthand. It's a tough thing to overcome."
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Two "amusing" TV moments from Atlanta: 1) Ryan Newman not knowing the name of the sponsor of his winning Kevin Harvick Inc. Chevrolet after the Truck race. 2) Sunday, when it was reported that Michael Waltrip had an electrical "short in his helmet," ESPN's Andy Petree said something to the effect that "that's been going on for a while. Just kidding, Michael."
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Have you PAID for your media workspace lately? Check this out from the Chicago Sun-Times:
http://blogs.suntimes.com/sweet/2008/10/obama_campaign_selling_chicago.html

[ more Blogging the Chase next Tuesday . . . ]

Monday, October 20, 2008

NET WORTHS

"Win on Sunday. Sell on Monday." That's the most historically significant statement in Business of Racing history.

Corporate $ponsorship and technical $upport budgets, which have a combined value into the billions$, have been approved with this bottom-line argument. It was first used (at least as far as I know) by the Detroit automakers.

But with show rooms becoming ghost towns, I'm sad to say there's going to be more walking-around room in the pit and garage areas.

The auto manufacturers' financial troubles -- and those of their local dealers -- have been a primary focus of media attention. Pretty much uncommented upon, though, is the huge position automotive retailing occupies in the portfolios of some of racing most important players.

For example purposes only, consider Roger Penske, Rick Hendrick and Bruton Smith.

According to the Penske Automotive Group's website, PAG operates 308 retail auto franchises, representing more than 40 different brands, and 27 collision repair centers. Quoting from corporate information: "Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 161 franchises in 19 states and Puerto Rico and 147 franchises located outside the U.S., primarily in the United Kingdom. Penske Automotive is also the exclusive distributor of the smart fortwo through its wholly-owned subsidiary smartUSA Distributor LLC. smartUSA operates 69 smart centers across the U.S. Penske Automotive is a member of the Fortune 200 and Russell 1000 and has approximately 16,000 employees."

I counted more than 60 dealerships listed on Hendrick's site, in at least 10 states. Included are a Jeff Gordon Chevrolet in Wilmington, N.C., Jimmie Johnson Chevrolet in San Diego, Terry Labonte Chevrolet in Greensboro, N.C., and Darrell Waltrip Honda and Volvo in Franklin, Tenn.

PRNewswire materials show Smith's Sonic Automotive with about 166 dealerships in at least 15 states. Under this umbrella are Arnold Palmer Cadillac stores in Charlotte and Pineville, N.C.

Most of the "name" brands are offered by the above, among them Acura, Audi, Jaguar, Lexus, Land Rover, Porsche, Rolls-Royce, Aston Martin, Honda, Toyota, Mercedes-Benz, Ferrari, BMW, Maseratti, VW, Bentley, Hummer, Dodge and Jeep.

It's a different level, but rookie NHRA Funny Car driver Bob Tasca III's family has sold Fords in Rhode Island since the 1960s.

In my current Drag Racing Online.com "All Business"column, I reference that one of the sub-issues affecting the general racing economy is the huge net-worth hit no doubt taken by a bunch of team owners.

And then there are the various investment firms that have bought into NASCAR teams in recent years. The underlying financial health of those concerns surely could spill-over into team operations.

These days, working to maintain existing sponsor relationships is a full-time and highly-stressful job. Let alone trying to secure any fresh deals. No doubt, some owners have their hands full just trying to keep a solid foundation under their own core businesses, a priority over racing.

That's a factor worth watching.
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Considering how the elite New York and Washington D.C. media have back-handed John McCain during this campaign, as they (led by NBC -- would Meet The Press have given Colin Powell its stage for a McCain endorsement? I think not.) fall all-over-themselves for Barack Obama, this posting on The Drudge Report on the eve of the 2004 Republican National Convention in New York City serves as a cautionary tale. Here's the way it ran on Drudge:

DRUDGE REPORT XXXXX MON AUG 30, 2004 21:18:05 ET XXXXX

MEDIA ELITE TOAST MCCAIN AT ELITE EAST SIDE BOITE

"Arizona Republican Sen. John McCain hosted a hyper-exclusive birthday party for himself at La Goulue on Mad Avenue on the eve of the convention, leaving no media icon behind.

"WASHINGTON POST reports Tuesday how guests included NBC's Tom Brokaw and Tim Russert, ABC's Peter Jennings, Barbara Walters, Ted Koppel and George Stephanopoulos, CBS's Mike Wallace, Dan Rather and Bob Schieffer, CBS News President Andrew Heyward, ABC News chief David Westin, Time Warner CEO Richard Parsons, CNN's Judy Woodruff and Jeff Greenfield, MSNBC's Chris Matthews, CNBC's Gloria Borger, PBS's Charlie Rose -- pause here to exhale -- and U.S. News & World Report publisher Mort Zuckerman, Washington Post Chairman Don Graham, New York Times columnists William Safire and David Brooks, author Michael Lewis and USA Today columnist Walter Shapiro.

"They and others dined on lobster salad, loin of lamb, assorted wines, creme brulee, lemon souffle and French tarts."

[ more next Tuesday . . . ]

Monday, October 13, 2008

MESSAGES

Talk about sending the wrong message.

Kyle Busch, at his pre-Charlotte media availability, was asked if the national -- no, make that worldwide -- economic crisis caused him to worry about the overall health of NASCAR.

"I don’t really pay attention to any of it to be honest with you. I don’t have money invested in anything or any of that stuff. To me, it seems like it’s a bad thing because everybody says it is and it’s in the dump. I don’t necessarily notice it much, I mean I’ve got my own race team and stuff, and yeah, the costs are high for fuel and taking the hauler around and all that stuff. It seems to be OK for us."

It's beyond me how anyone could not pay attention. I guess Kyle was too focused on driving to notice all those empty grandstand seats and camping areas at Talladega. I assure you Toyota and all his sponsors noticed and, yes, are paying attention. As are NASCAR fans, who, ultimately, make Kyle's comfortable lifestyle possible. Great for Kyle if he doesn't have any worries -- but NASCAR Nation does.

I mark this as another example where the people who supposedly are there to look out for the best interests of Kyle, his team and sponsors, are MIA.

I've been asking motorsports' powerbrokers about the economy since the summer of '07. Sharp people I've spoken with, including Jeff Gordon, Ray Evernham, Jack Roush, Kenny Bernstein and Don Schumacher have expressed concern.

At Lowe's Motor Speedway, Gordon was asked the question again.

"It’s a scary time right now. We see strong teams struggling to get sponsorship. With the economy the way it is and sponsorship being so significant in our sport, I know that Rick Hendrick and I have had several conversations that were a little nervous. We’re very fortunate that we have our sponsors tied down for several years and that’s extremely important at this time. But even that doesn’t guarantee anything in an economy like this.

"We’ve got to not only try to do our best to perform and keep those sponsors, but we’ve got to do our best to cut costs as well and make sure that we’re not being exuberant in anything that we do. So we challenge everybody at the organization to watch those numbers and also we challenge ourselves as teams and drivers to make sure that we keep the performance up.”


Gordon recently unveiled his new black graphics design for the No. 24 DuPont Chevrolet on NBC's Today show, hoping to rocket-launch sales of new souvenirs (just in time for the holiday shopping season). I'm sure Jeff grasps how tough the environment is, even considering the ultra-passionate nature of NASCAR fans.

The point here, however, is Jeff sent the proper signal to those not as economically fortunate. He gets it. He wants the public to understand he knows it's tough out there and appreciates their continued support. Jeff Burton did it, too, after winning Saturday night.

That was the right message.

P.S. -- Given the wretched excesses of Formula One, Peter Windsor would have done well to ask Ron Dennis about the effects of the global economic crisis on racing's richest series during their pre-Japanese Grand Prix interview on SPEED. And sought out other owners and manufacturer movers-and-shakers for comment. Elsewhere, considering the financial challenges faced by many NHRA fans, ESPN2's pre-Virginia Nationals feature on a driver's expensive toys was inappropriate for the times. I've said for a few years that ESPN2's NHRA presentations are racing's best-produced shows, but some cracks are starting to show. Sunday night, the gimmicky "Stat Man" took time away from racing for some numbers that promoted ESPN's Monday Night Football game. Unacceptable.

P.S. II -- Last week I noted drivers who no-showed for scheduled interviews on Phoenix radio stations. Add Clint Bowyer to the list. I'm told he didn't call-in for an arranged segment on the Valley's MRN affiliate Oct. 8. It's time for the managers charged with the responsibility to obtain maximum value for team sponsorships to get with it and pay attention -- especially in this economy! Oh, and when qualifying was rained-out last Thursday, just how many "publicists" used the "down" time as an opportunity for their drivers to do phone interviews with radio or print media? Just wondering . . .
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In recent weeks, I've noted the lack of attention drivers too-often display in pre-race drivers' meetings. There is another side to that story, it seems -- at least in NASCAR -- as evidenced by Dale Earnhardt Jr.'s comments last weekend at Lowe's Motor Speedway:

“I don’t like doing it (asking questions) in front of all the other drivers. It’s really a soapbox that I don’t really like to climb on to, and if I was to give Regan (Smith, penalized for passing below the line at Talladega on the last lap) any advice, I’d tell him to go ask that question of them guys (officials) personally hours prior to the race or before the race. That’s how I’d do it if I had a question that I’m curious about, I go ask it myself. Standing up in front of everybody in the drivers' meeting, a lot of times, you don’t get the real answer. When they have to give you the answer in front of everybody, a lot of times you’re better off to go get it behind closed doors, and hear exactly what you need to hear.”

A reporter asked Junior if that approach didn't defeat the purpose of the meeting. His brief answer said plenty:

“Who are you kidding?”
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NHRA and Coca-Cola unveiled the new logo for the 2009 season, when Full Throttle energy drink takes over the title sponsorship from Powerade. FT has said it will be more aggressive than P in promoting the series -- which is greatly needed. The announcement cited "at-track activation, out-of-home media support, online presence, retail programs and sampling." I'd say the second and fourth items on that list are the most important in trying to grow the sport.

Please note I've added Paul Page's blog to my recommended list in the right-hand column.
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We can see when a driver/car combination is faster. We can see when the gap between positions opens or closes. We can see when a crew performs a faster pit stop.

Which brings me to the ALMS' Green Challenge, which officially debuted the other week at Road Atlanta. As a manufacturer-participation-inducing technical exercise, and olive branch to the environmentalists, I grasp the value. I get that. That's fine. The press release says a Porsche was the P class winner and a Corvette in GT. How would we know if the ALMS didn't tell us? We can't see the factual elements of this competition.

Like the NFL's quarterback rating system, or the one NASCAR promotes in Sprint Cup, the mathematical formula used to make these determinations is so byzantine as to be not understandable by the media or public. Thus, it will be limited to specific interest-group publicity materials, and automaker advertising. It's not a tool to attract the general public.

I have a feeling the series would tell me: No worry. That's not our demo.
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Life on the Campaign Trail: John McCain may be trailing in the polls, but a CBS reporter says the Republican's media relations operation is much more efficient than Barack Obama's -- and even claims the Democrat's campaign plane smells. (!) Read it for yourself:
http://www.cbsnews.com/blogs/2008/10/07/politics/fromtheroad/entry4507703.shtml
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AARWBA will present John Force with its Comeback Award during a ceremony in the Shav Glick Media Center at Pomona on Saturday, Nov. 15. The 14-time NHRA Funny Car champion returned to the winner's circle this season after his serious injuries last fall. Shirley Muldowney, A.J. Foyt, Darrell Waltrip, Al Unser, Neil Bonnett and Scott Pruett are among the previous honorees. I'll be there to participate and talk about the January 10 39th All-America Team ceremony, presented by A1GP World Cup of Motorsport, which will return to California for the first time in four years. Site: The Hilton in Ontario, Calif. Go to http://aarwba.org/ for ticket/table/program ad information.

[ more Blogging the Chase next Tuesday . . . ]



Monday, October 06, 2008

SEEING the LIGHT

OK, Carl Edwards triggered the second "big one" Sunday at Talladega, but I'm happy to say he's seen the light. Or he's getting -- and taking -- some good advice.

I've noticed for a few weeks now that, when Carl is approached for his live ABC/ESPN TV interviews, he either takes off his sunglasses, or pushes them up on his head.

He lets us see him.

As I've written before, drivers have been getting so covered-up with big sunglasses, cap, and now also those damn Terrible Towels, well, they are so concealed, I'm not sure they could be ID'd in a police lineup. (No, that is not an excuse for drivers to be allowed to walk around with their uniforms pulled down, which looks sloppy, unprofessional, and is disrespectful to fans and sponsors who lose value.) The eyes may -- or may not -- be the window to the soul, but they sure help reveal the personality.

Many drivers have sunglasses "deals" -- I don't know if Carl does or not -- but his approach serves both needs. The company gets a little TV time and the folks get to feel closer to the person.

Fans need to see and sense more of a connection with their heroes. Well done, Carl. Keep it up. And, I hope, others will take note.
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Sunday produced a noteworthy contrast in what we -- the viewers -- got out of our racing TV experience.

Talladega fans didn't need an Amp Energy drink to feel revved-up, but I wonder if it would have helped some of the announcers. As I've repeatedly spotlighted in this space, too many pit reporters are poor questioners. Sunday, I got very tired of the trite, "What did you see from your perspective?" "From your perspective" seems to be the new "at this point in time" as needless words microphoner holders junk into their sentences. And, let's just be honest about it, the checkered flag call was embarrassing -- Dr. Jerry Punch didn't know the "out-of-bounds" rule, Andy Petree had one opinion, Dale Jarrett another. When Punch said he was looking into the adjacent NASCAR officials' booth for an answer, well, I felt sorry for him. What a downer.

I wrote here several weeks ago, in the aftermath of Helio Castroneves' blocking penalty at Detroit, about what I've observed too often over the years: Drivers not paying attention at the drivers' meeting. This might have come into play again after 'Dega, when various drivers said they had different understandings of the below-the-yellow-line rule. That's ridiculous and unacceptable. According to what I've been told and read, some drivers sought clarification on what was legal on the last lap in individual conversations with officials, but no one asked questions when the subject was raised in the pre-race meeting. Now, I realize everyone wants to seek an advantage -- in this case, knowing something a competitor doesn't -- and that NASCAR loves to keep things vague to provide ample room for "judgment calls." This, however, was a safety issue and Punch's inability to inform the fans with certainty was unfair to us.

Later, Jeff Gordon did his annual co-host gig on Wind Tunnel. It was a boffo hour -- fun and informative and entertaining. Tommy Kendall's question about how close Jeff actually came to joining the BAR Formula One team was enlightening. Jeff admitted discussions had taken place and said he thought the team wanted an American driver. I can add a little follow-up to this: Jeff's right. When Gordon didn't pursue the deal, BAR tried to sign Jimmy Vasser.
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AMEN!: According to Sports Business News.com, ESPN will make a "concerted effort" to add live sports event coverage "while cutting back on scripted series, reality shows, original movies and other types of more general sports entertainment."

John Skipper, ESPN's vice president of content, was quoted this way: "We have found that what sports fans really care about, and why they come to ESPN properties, is to watch live games."

I could not agree more.
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HEADLINE NEWS (or not): SBN.com also reported last week that an increasing number of daily newspapers have put NHL coverage on ice as a way to reduce costs.

Examples: The Palm Beach Post has ended staffing of the Florida Panthers. The Los Angeles Times is using just one beat reporter to cover both the Kings and the Anaheim Ducks. Road games won't be attended on a regular basis. The Philadelphia Flyers are one of the League's prestige teams, but the Inquirer's beat writer took a buyout when shifted to NFL reporting, and quoted the sports editor as calling hockey "an irrelevant sport." At least early in the season, the Arizona Republic isn't traveling with the Coyotes.

So, motorsports isn't alone battling for space . . . but I continue to believe racing is (or has the strong potential to be) a far bigger generator of revenue, in terms of sales and advertising, than some sports which have been judged as essential to cover. But publishers have to be made to realize that -- and get their sales people to act accordingly.
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Here's my suggestion for those who still believe "any publicity is good publicity."

See last Thursday's AP story (among many others) about Helio Castroneves.

Then ask Roger Penske.
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Recently, it was a bad week for racing coverage in Arizona. Atlantics driver and former Malcolm In the Middle star Frankie Muniz no-showed on a long-scheduled appearance (re-confirmed the day before) on Racing Roundup Arizona. No explanation offered. Two days later, Kyle Busch was promoted as a guest on the morning talk show on the Valley's MRN affiliate. You guessed it: Kyle's call never came. Oh, the lack of professionalism, and common courtesy, in our society.
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Here's a link to my new "All Business" column in the October Drag Racing Online.com. It deals with the effects of the Wall Street crisis on motorsports:
http://dragracingonline.com/columns/knight/x_9-2.html
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As chairman of the AARWBA All-America Team ceremony, I've strived to make the event more valuable and newsworthy for members and guests. Last year, we added the pre-dinner Shav Glick Newsmakers Forum, an opportunity for drivers/teams/sponsors/tracks/sanctions to make brief announcements. That was a success and we'll do it again before the 39th annual ceremony, Saturday, January 10, at the Ontario (Calif.) Hilton.

I'm pleased to share with you that, this time, we'll spend the day on a "field trip." Saturday morning, AARWBAers will board NHRA-provided transportation for a visit to John Force Racing, in Yorba Linda. We'll have breakfast, tour the 14-time Funny Car champion's facilities, hear from John, and have plenty of time for one-on-one and small group interviews with John, daughter Ashley, Robert Hight and others. After that, it's on to Pomona, for an afternoon of media racing. NHRA drivers will teach Drag Racing 101 and then we'll have elimination rounds in Pontiacs, NHRA's official vehicle. NHRA will have awards for the winner and runner-up. Then, back to the Hilton, with plenty of time to get ready for the 5:30 p.m. Forum, pre-dinner reception co-hosted by ESPN and MAZDASPEED, and the 7 p.m. dinner and ceremony presented by A1GP World Cup of Motorsport. Legendary announcer/broadcaster Dave McClelland will MC.

This is a great opportunity both for AARWBA members and NHRA. I thank NHRA and JFR. Now's the time to make your plans to attend: Go to http://aarwba.org/aarwba09.htm to order tickets, reserve tables and advertise in the program book. A special AARWBA room rate is available at the Hilton.

I have accepted AARWBA President Dusty Brandel's appointment to serve as national vice president on an interim basis. This will provide continuity of leadership following Mike Hollander's death. I'll serve until a new national VP is chosen by the membership in regularly scheduled elections later this year and will not be a candidate.

Thanks to the many who have written in reaction to last week's posting, remembering Paul Newman, Mike Hollander and Al Holbert. If you didn't read it, please scroll below.

[ more Blogging the Chase next Tuesday . . . ]