10/03 00:15
Championship Auto Racing Is a Big Loser for Owners: Doron Levin
By Doron Levin
Southfield, Michigan, Oct. 3 (Bloomberg) -- I hadn't heard the
expression ``worth more dead than alive'' in some time, until someone
used it to describe, rather aptly, the current predicament of
Championship Auto Racing Teams Inc.
Known as CART, the auto racing circuit started in 1979 has been losing
teams, drivers and sponsors steadily to its younger rival, the Indy
Racing League (IRL), started in 1996.
Both racing circuits feature similar, low-slung, open-wheel cars that
reach speeds greater than 200 miles per hour.
CART offered shares publicly starting in March 1998 at $16 and then in
May 1999 at $28. For investors it was a chance to join forces
financially with some of the biggest names in racing, including
drivers like Bobby Rahal, Al Unser Jr. and Michael Andretti.
Sadly for those who invested, the excitement of racing has yet to be
matched by a financial return. The sports crazy U.S. public has plenty
of choices, maybe too many -- from women's pro basketball to televised
bass fishing -- with limited time and money to watch it all.
Sponsorship Dollars
Auto racing comes in multiple flavors with the topping for all leagues
being sponsorship dollars. Auto, cigarette, cosmetic, beverage and
other companies that pay to have their logos plastered on the racecars
seek the biggest audiences. Honda Motor Co. and Toyota Motor Corp.
this year switched their supply of engines to the IRL from CART.
The latest blow to CART came on Sept. 17 when Michael Andretti,
winning driver in a record 42 CART races, announced he was taking his
team to the IRL. His father, Mario Andretti, a winner of the
Indianapolis 500, remains a CART director.
On Sept. 22, with CART's share prices sinking to all-time lows in the
neighborhood of $4 from a peak of $35.62 in mid-1999, the
Indianapolis-based league announced it was allowing a team owner and
its biggest shareholder, Gerald Forsythe, to boost his stake in the
company to 23 percent. Forsythe had owned 14.6 percent of CART as of
May.
Forsythe, based in Wheeling, Illinois, is buying his shares from James
Grosfeld of Bloomfield Hills, Michigan. A Sept. 12 Securities and
Exchange Commission disclosure said Grosfeld sold 1.17 million shares
in a private sale for about $5.9 million or $5 each. He appears to
have bought most, if not all, his 1.5 million CART shares during the
autumn of 2001 for about $15 each.
Bad Timing
Grosfeld, a financier and former chief executive of Pulte Homes Inc.,
didn't return several phone calls to his office in Southfield,
Michigan, seeking comment.
Grosfeld -- apparently with little experience in spectator sports --
was elected a CART director a year ago promising, according to the
company's press release, that his ``background and experience can help
move the company in a direction that will be advantageous to all the
entities involved with CART.''
Instead, he and Forsythe immediately bickered over the hiring a new
chief executive. In any event, Grosfeld's timing couldn't have been
worse.
Just a month after his arrival, Roger Penske, a founder of the league
and the most successful team owner in U.S. auto racing with 114
victories in open-wheel cars, decided he was fed up. Penske switched
to the rival Indy Racing League.
Penske's move acknowledged the reality of five years of mediocre
ticket sales and TV ratings. Besides, the rival, closely held IRL
controlled the Indianapolis 500, the most popular race ever. Without a
race of similar clout to the 500, CART couldn't build a following.
Just a few months after leaving CART, Penske's team won its 12th
Indianapolis 500 race.
Ultimate Goal
The sequence of Grosfeld's transactions, described in SEC filings and
combined with the falling value of shares, suggests that he probably
lost at least $15 million on his one-year investment.
CART evidently had been vulnerable even as Grosfeld was buying in;
what was he thinking? ``It does make you scratch your head,'' said
Glen Reid, analyst for Bear Stearns.
Or maybe Grosfeld noticed the jewel in CART's balance sheet, about
$130 million of cash and almost no debt. His ultimate goal might have
been liquidation.
With Grosfeld's shares, Forsythe probably now has a big enough stake
to decide whether it's prudent to keep battling the owners of the Indy
Racing League, who also own the Indianapolis Motor Speedway and the
500-mile race held each May.
As owner of about 3.4 million shares, his stake is worth roughly $12.2
million, based on the current price of the stock. CART has 14.71
million outstanding shares.
In a liquidation, Forsythe's shares might be worth $28 million or so,
given the roughly $125 million cash that remains on CART's balance
sheet.
Forsythe may try to take CART private. If so, he can search for a new
strategy and learn if some life remains, after all.
American race fans are retarded, ovals are perfect for them. Keep watching
those nascar billboards on wheels and these budget v6 powered cars going
round and round, driven by drunks and fat little chicks!
"Conga" <[email hidden]> wrote in message
news:xE7n9.107932$[email hidden]...
> American race fans are retarded, ovals are perfect for them. Keep watching
> those nascar billboards on wheels and these budget v6 powered cars going
> round and round, driven by drunks and fat little chicks!
> Referring to Al Jr. and Sarah Fisher of the irl. Cart Champ cars still
are V8 Turbos...very SMALL but still V8's.(and historically have had more
power than the current F1 engine packages.)
and as for the Nascar rolling Billboards....I think that is a term that
applies to ANY modern racing series. Rallye, F1, even Karts. Isn't it
Bernie's vision to have blue cars that can have advertisng electronically
painted on them for each race?
dave henrie
uhhhh, is there a new cart sim?, or are you just hopelessly off topic here?
"Jerry" <[email hidden]> wrote in message
news:[email hidden]...
Quoted text (112 lines)
> 10/03 00:15 > Championship Auto Racing Is a Big Loser for Owners: Doron Levin > By Doron Levin > > > Southfield, Michigan, Oct. 3 (Bloomberg) -- I hadn't heard the > expression ``worth more dead than alive'' in some time, until someone > used it to describe, rather aptly, the current predicament of > Championship Auto Racing Teams Inc. > > Known as CART, the auto racing circuit started in 1979 has been losing > teams, drivers and sponsors steadily to its younger rival, the Indy > Racing League (IRL), started in 1996. > > Both racing circuits feature similar, low-slung, open-wheel cars that > reach speeds greater than 200 miles per hour. > > CART offered shares publicly starting in March 1998 at $16 and then in > May 1999 at $28. For investors it was a chance to join forces > financially with some of the biggest names in racing, including > drivers like Bobby Rahal, Al Unser Jr. and Michael Andretti. > > Sadly for those who invested, the excitement of racing has yet to be > matched by a financial return. The sports crazy U.S. public has plenty > of choices, maybe too many -- from women's pro basketball to televised > bass fishing -- with limited time and money to watch it all. > > Sponsorship Dollars > > Auto racing comes in multiple flavors with the topping for all leagues > being sponsorship dollars. Auto, cigarette, cosmetic, beverage and > other companies that pay to have their logos plastered on the racecars > seek the biggest audiences. Honda Motor Co. and Toyota Motor Corp. > this year switched their supply of engines to the IRL from CART. > > The latest blow to CART came on Sept. 17 when Michael Andretti, > winning driver in a record 42 CART races, announced he was taking his > team to the IRL. His father, Mario Andretti, a winner of the > Indianapolis 500, remains a CART director. > > On Sept. 22, with CART's share prices sinking to all-time lows in the > neighborhood of $4 from a peak of $35.62 in mid-1999, the > Indianapolis-based league announced it was allowing a team owner and > its biggest shareholder, Gerald Forsythe, to boost his stake in the > company to 23 percent. Forsythe had owned 14.6 percent of CART as of > May. > > Forsythe, based in Wheeling, Illinois, is buying his shares from James > Grosfeld of Bloomfield Hills, Michigan. A Sept. 12 Securities and > Exchange Commission disclosure said Grosfeld sold 1.17 million shares > in a private sale for about $5.9 million or $5 each. He appears to > have bought most, if not all, his 1.5 million CART shares during the > autumn of 2001 for about $15 each. > > Bad Timing > > Grosfeld, a financier and former chief executive of Pulte Homes Inc., > didn't return several phone calls to his office in Southfield, > Michigan, seeking comment. > > Grosfeld -- apparently with little experience in spectator sports -- > was elected a CART director a year ago promising, according to the > company's press release, that his ``background and experience can help > move the company in a direction that will be advantageous to all the > entities involved with CART.'' > > Instead, he and Forsythe immediately bickered over the hiring a new > chief executive. In any event, Grosfeld's timing couldn't have been > worse. > > Just a month after his arrival, Roger Penske, a founder of the league > and the most successful team owner in U.S. auto racing with 114 > victories in open-wheel cars, decided he was fed up. Penske switched > to the rival Indy Racing League. > > Penske's move acknowledged the reality of five years of mediocre > ticket sales and TV ratings. Besides, the rival, closely held IRL > controlled the Indianapolis 500, the most popular race ever. Without a > race of similar clout to the 500, CART couldn't build a following. > > Just a few months after leaving CART, Penske's team won its 12th > Indianapolis 500 race. > > Ultimate Goal > > The sequence of Grosfeld's transactions, described in SEC filings and > combined with the falling value of shares, suggests that he probably > lost at least $15 million on his one-year investment. > > CART evidently had been vulnerable even as Grosfeld was buying in; > what was he thinking? ``It does make you scratch your head,'' said > Glen Reid, analyst for Bear Stearns. > > Or maybe Grosfeld noticed the jewel in CART's balance sheet, about > $130 million of cash and almost no debt. His ultimate goal might have > been liquidation. > > With Grosfeld's shares, Forsythe probably now has a big enough stake > to decide whether it's prudent to keep battling the owners of the Indy > Racing League, who also own the Indianapolis Motor Speedway and the > 500-mile race held each May. > > As owner of about 3.4 million shares, his stake is worth roughly $12.2 > million, based on the current price of the stock. CART has 14.71 > million outstanding shares. > > In a liquidation, Forsythe's shares might be worth $28 million or so, > given the roughly $125 million cash that remains on CART's balance > sheet. > > Forsythe may try to take CART private. If so, he can search for a new > strategy and learn if some life remains, after all.yeah, I figured I was in rec.autos.sport.f1...my bad lots of CART bashing in
there
"rik zeppelin" <[email hidden]> wrote in message
news:Yjpn9.41998$DN4.6872@sccrnsc01...
> uhhhh, is there a new cart sim?, or are you just hopelessly off topichere?
