City Hall wants to keep believing in CART
Portland cautious but hopeful in talks with ailing auto race series
City leaders are standing by the CART Champ Car World Series, which recently staged its 20th race at Portland International Raceway, despite its failing health and revelations of financial ruin.
Championship Auto Racing Teams, a public company, announced last week that it needed to raise more capital to ensure a full schedule in 2004.
'Projections beyond 2004 are, in management's view, very speculative,' the company's statement says. CART says it doesn't expect positive cash flow until 2006, at the earliest.
The city and CART, which promoted the G.I. Joe's 200 this year along with Global Events Group, have reached a verbal agreement on a three-year deal to continue the race in Portland.
But Jim Francesconi, the city commissioner who has worked closely with CART, won't sign the contract until the series stabilizes, says Kevin Jeans-Gail, his chief of staff.
'We're optimistic,' Jeans-Gail says. 'We're aware of serious questions raised about CART's financial health. We're tracking that situation closely.'
Some groups of investors that include team owners Craig Pollock, Kevin Kalkhoven, Paul Gentilozzi and Gerald Forsythe, who holds 23 percent of CART's stock, reportedly have expressed interest in buying the series. Formula One owner Bernie Ecclestone, considered an essential piece in the puzzle, might join one of the groups.
A group would immediately take the series private.
The banking firm Bears, Stearns & Co. has been contracted to find suitors, but CART says, 'There cannot be any assurance this process will result in any transaction.'
A source close to the Portland race says that Chris Pook, CART's chief executive officer, stopped in Portland on Monday and assured the city that 'a purchase of the company is imminent.'
Portland fills a slot
'If CART survives, Portland survives,' says CART spokesman Adam Saal, addressing questions about whether Portland will have a 2004 race. 'Portland is a CART town. We have a pretty good hold on that marketplace and realize it. It's definitely a strong venue and fills a needed slot in our overall marketing plan, being our sole offering in the U.S. portion of the Northwest,' which includes Vancouver, British Columbia.
The G.I. Joe's 200 used to be a Rose Festival event, promoted by Global, and the entities paid sanctioning fees. The race lost money for the first time in 2002. Now, the city simply rents PIR to the racing series, which contracts Global to locally promote.
Four of CART's six self-promoted races have been run this year, including Portland. CART has revised its expected losses from self-promoted events to the 'upper end' of the $4.8 million-to-$7.8 million projections.
In addition, sanctioning fees, television advertising and sponsorships all have dipped this year, CART's statement says. The series has used millions in cash to support teams and run events, while seeing its stock price plummet; it closed at $1.70 Wednesday, a far cry from its high of $33.62 in 1999.
Interestingly, though, more than 1 million shares have been purchased in the last two weeks, including more than 109,800 on Wednesday.
Attendance appears down
Crowd counts are not announced for the PIR race, but all indications are they have gone down the past four years. A look at concession sales shows that PIR's take has decreased 48 percent since 2000. That figure is considered an adequate correlation to crowd size.
Global President Mike Nealy and Portland Parks & Recreation officials are developing 'performance standards' for CART to meet, a requirement of the next contract. They pertain to car count, crowd size and other tangible measures.
'They have to have the capacity to promote and put on a premier event,' Jeans-Gail says of CART. 'I'm confident we'll be able to reach a business arrangement that protects the taxpayers but also works for CART, so we can continue this partnership.'
Jeans-Gail says the city has not been contacted by Indy Racing League representatives, CART's rival series that will reportedly add races on road courses like PIR to its schedule.
Francesconi has told an Indy league intermediary that if the series wants to talk about racing in Portland, its representatives should contact him.