CART Media Conference |
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Topics: CART
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Andrew Craig
David Grayson
Dick Rutherford
February 25, 1999
T.E. McHALE: Good afternoon to everybody. Welcome to the CART media teleconference. Thanks to all of you for taking the time to join us this afternoon. We received about four inches of snow in metro Detroit overnight, but our guests this afternoon are in much more temperate climes. We're pleased to welcome from n Honolulu, Hawaii, Andrew Craig, president and chief executive officer of Championship Auto Racing Teams; Dick Rutherford, co-founder of the Hawaiian Super Prix; and David Grayson, president of the event. Welcome to all you gentlemen and thanks for being with us this afternoon. During the press conference within the hour, Mr. Craig, Mr. Rutherford and the Hawaiian Governor Benjamin Cayetano have announced an inaugural Hawaiian Super Prix, a Championship Auto Racing Team sanctioned event, which will offer the largest single-day payout in the history of Motorsports, $10 million, with $5 million going to the winner. The event will take place on Saturday, November 13th, on a 1.8 mile temporary street circuit at Barbers Point Airport on the island of Oahu. Participation in the non-points bonus race, which is not part of the FedEx Championship Series season, will be open to the Top 12 finishers this year's FedEx Championship Series which concludes with the October 31st Marlboro 500 presented by Toyota, plus an additional four drivers to be selected by the promoter. Television coverage of the event will be provided on a pay-per-view basis with details regarding the package to be announced at a later date. With that I'd like to invite Mr. Rutherford, Mr. Craig and Mr. Grayson to make any additional comments they wish to make before we begin taking questions. Good afternoon, gentlemen. Anything you want to add to what we just talked about before we open the floor to questions?
ANDREW CRAIG: I'd just like to know what snow is, we certainly don't have any of the snow here. In opening, let me just say we're delighted to be announcing that this event today. I think this is going to be a huge success. I think our drivers are going to love it, our fans are going to love it. We're looking forward to being here on November the 13th.
T.E. McHALE: Thank you, Andrew. As we begin taking questions, I want to inform everybody that we have a large number of callers on the line today; not a lot of time available to complete this call. If everybody would limit himself to one questions, perhaps a brief follow-up, your moderator and the other callers would certainly appreciate it. That said, we will open the floor to questions.
Q. First of all, whose idea was pay-per-view? Secondly, if nobody watches it for free in the United States, why do you guys think this can work on pay-per-view?
DICK RUTHERFORD: We decided that pay-per-view was the right way for us to go to ensure ourselves the financial success of the program. As far as the way we're going to produce the event for television, it's rather unique. I think that that's why we think we can get more viewers than would normally turn on to an auto racing event. What we're trying to do is bring more fans into it. We're trying to make it friendly to those fans by bringing Hollywood celebrities and a lot of other things into an intermission show which they will turn on just to see that part of the show. But by them turning it on, they're going to see a great race. I think it will bring more racing fans to it.
Q. Was this Mr. Grayson speaking?
DICK RUTHERFORD: That was Mr. Rutherford.
Q. One other follow-up question. What kind of price are you looking at for the pay-per-view?
DICK RUTHERFORD: 19.95.
Q. Sounds like an interesting idea here. That's an awful lot of money at stake. Do you run a risk of a crash fest, not many cars taking part in the second leg of the race?
DICK RUTHERFORD: No, because I'm going to beat the snot out of the drivers if they crash (laughter). No, I don't think so. I think that these guys know they're going to have to finish this race to get a chance at this $5 million. You might have that on the last lap or two, but I don't think -- I think these guys will drive better than that, I really do. By the way, not only by finishing, they're going to earn points for their qualifying position, they're going to earn points for their fastest lap. If a guy sets a fast lap, another guy sets that, he still gets that point. They're going to keep looking at this right to the very end. Passing cars, they get a point for passing cars at the end of the start/finish line each lap. It will add up at the end. I think it will be a very exciting race right up to the end.
Q. Is Hawaii involved financially?
DICK RUTHERFORD: No. We have asked for nothing from the state of Hawaii. It's kind of unlike anything that's ever happened here. It was wonderful to see the response of the state officials. But, no, we have not asked for anything. I didn't want any interference, either, as to how we ran this event. That was important because you get bureaucracy intermingled in this thing, it wouldn't just come out right.
Q. Is that Mr. Rutherford again?
DICK RUTHERFORD: Yes. I'm sorry.
Q. If I may get in with a second one, can you talk a bit about how are you're going to market this thing to get enough people, and how many people you need watching for it to work?
DICK RUTHERFORD: The take rate is the number of homes that buy this event. Actually, the number that you need is very small. The take rate number is in the 2 percent range that would make us, say, like a break-even if we didn't get a lot of sponsorship and things like that. The people who are doing this pay-per-view event did a study, a telephone survey, and the survey numbers came out much larger than that, likely to buy was 5.8 percent. I think we're feeling very good about the event.
Q. Is this event basically the forerunner to the Hawaiian Super Prix that had been discussed in 1992?
DICK RUTHERFORD: Yes and no. This is really an entirely different event than what was proposed back in the '92 range. Those were run with purpose-built cars. They were like Can Am cars and things like that. We didn't want any of that. We wanted to have the best racing event in the world, and I believe CART can give that to us.
Q. As a follow-up, how many seats are you going to put up for this event?
DICK RUTHERFORD: We're proposing approximately 100,000. We're working with the seat people right now. As a matter of fact, they're scrambling to get 100,000. They're going even as far as Australia to get some extra seats for us.
Q. To get 100,000 people in there, are you going to be working with travel agencies to do tour packages?
DICK RUTHERFORD: Yes, that's correct.
DAVID GRAYSON: We have established a relationship. We haven't announced this yet, so I'd rather not name the company that's going to be doing the tour packages, both on an advertising through print media on the Internet, and also through the industry journals and trade magazines, to major sponsors and to the consumers to come here on packages.
Q. I just wanted to be sure I have an idea of all your possible revenue streams. You're looking at admission from seating. Have you secured some sort of corporate sponsor for the event or you're looking for that now?
DICK RUTHERFORD: Yes. We'll be making some announcement on corporate sponsorship here in the next 30 to 45 days at another big press conference.
Q. And one last thing, you were talking about 2 percent range, to get 5.8 percent range. 2 percent or 5.8 percent of what total number? I'm trying to get a rough idea of the potential number of people that might buy the pay-per-view.
DICK RUTHERFORD: Their universe right now is 36 million and growing at the rate of about 10,000 a month.
Q. In other words, when you say that you think you can get at least 2 percent, you're talking about 2 percent of that 36 million and growing number?
DICK RUTHERFORD: Correct.
ANDREW CRAIG: That's for the US market. Obviously, the potential of the event goes way beyond the US.
Q. Where is the track in relation to Honolulu? How far from Honolulu is it? What is the population of Honolulu?
DICK RUTHERFORD: The track is about ten miles due west of the Honolulu Airport. The population of Honolulu is - I don't even know - 1.2 million.
Q. The Top 12 of the people invited come from PPG Cup points. What's the criteria for the other four and why limit the field?
DICK RUTHERFORD: I have to say that when we put this together, I wanted 10, 12, 14 cars, whatever it was going to be, I wanted it to be a race nose-to-tail for the entire race. I didn't want to see people that could be lapped and things like that. That's not what I wanted for this event. That is not how we planned it. That's kind of why we chose this 12 plus 4. Where the other 4 come from will be from CART race drivers. For example, to put it in real perspective, let's say a Michael Andretti gets hurt halfway through the season, has a small crash and is out for the rest of the season or that he's well enough to run after the end of the season, his bone healed or whatever it was, he's ready to race, and he didn't make the Top 12. I certainly would want Michael Andretti there. That's why the promoter option to add that. We'll have the top 16 cars available to race.
Q. Is this going to be just a single-day event on Saturday or will there be something happening on Friday? Is there going to be qualifying? How are you going to determine the starting position? When you say promoter's option for some of these drivers, what about people who are not active drivers that you might lure back?
DICK RUTHERFORD: Well, again, I have to say that the event itself will be run with the qualified CART drivers. We're not looking at bringing Mario Andretti back or anybody like that. Maybe Carl Haas might (laughter). I'm sorry, I forgot the first question.
Q. Is it a single day?
DICK RUTHERFORD: Yes. It's a three-day event, Thursday, Friday and Saturday. Thursday is a practice day, get used to the racetrack, about a half day's worth of running. Saturday is a qualifying day. They're running for $250,000 qualifying pole position. Then a warm-up at the end, kind of like a regular CART race is run, getting prepared for the Sunday race which goes off at one o'clock -- excuse me, Saturday. It goes off at one o'clock Hawaii time; that's six o'clock Eastern time.
Q. Is it possible if this thing was successful for it to become part of the CART PPG series?
ANDREW CRAIG: Andrew Craig that's certainly not our thinking here. We think at this stage this is a special event. Bear in mind, it's not open to all competitors, it's only open to a total of 16 competitors. It doesn't really fit within the championship. We think this is something which is very good for our sport in the off-season. We think it's a big enough event that it stands on its own. It will keep our sport in the public eye during the winter months, which obviously is attractive to us. We don't see this as being part of the championship. It could not be unless it was available to all competitors.
Q. Andrew, is CART participating in the pay-per-view revenue?
ANDREW CRAIG: No. We're paid a sanction fee for the event, and that's it.
Q. Will the promoter be paying for the air freight and such?
ANDREW CRAIG: They very well may be. FedEx will be doing the air move.
Q. I'd like to ask what kind of background in pay-per-view the organizers have?
DICK RUTHERFORD: We don't have any background in it. I guess that's what you're asking.
Q. I wondered if you've done anything before there.
DICK RUTHERFORD: Not in pay-per-view. The people in pay-per-view will be the ones that will be doing the promoting with what they call the cable operators. They do all of these things. They do all the fights and things like that, so they know what they're doing. I'm counting on them to promote the heck out of this thing.
Q. How did you guys decide on holding this event in Hawaii as opposed to holding it at one of the existing venues on the schedule?
ANDREW CRAIG: First and foremost because Dick and David have the vision to bring us the opportunity. Part of that vision is they want to hold the event in a major resort area which in itself has strong attractive imagery, which is all a part of how you sell pay-per-view. That's really how it came about. If you're going to do an event that falls outside of the championship, obviously that dictates it's going to be an event in the winter, because we really wouldn't have the chance to do it in season. If you're going to do it in the winter, you have to go somewhere that's warm, and Hawaii fits the bill in every respect. We think Hawaii is going to be a very good venue for this. We think a lot of our fans are going to use this as an opportunity to take a holiday, come out here and enjoy the race and enjoy Hawaii.
Q. Andrew, when these gentlemen first brought you this idea, what was your first reaction to it?
ANDREW CRAIG: Well, I thought it was a very interesting concept, one obviously one should have a careful look at the financial dynamics to make sure this could be run along the lines being described. We've been working together now for quite some while. I guess it's probably two, two and a half years.
DICK RUTHERFORD: Middle of 1996.
ANDREW CRAIG: Since we first started all this. We're delighted to bring this to culmination today.
Q. A question for Dick, as well. Dick, as you can tell, a lot of my colleagues are looking at this kind of with a squinted eye of this is almost too good to be true. Did you realize that some may look at this with skepticism?
DICK RUTHERFORD: Well, some of my own people that I work with did at the beginning when I proposed it. Look, we have to do something spectacular. A $10 million purse is spectacular. Yeah, I guess, but I think by announcing it here and having Mr. Craig and the CART organization say this is what they're going to do kind of tells you that it's a real deal.
Q. Wish you all a lot of luck.
DICK RUTHERFORD: Thank you.
Q. Mr. Craig, after this is done, a month after, where do you expect CART to be postured in the community of Motorsports entertainment products as far as other things out there? And which talking heads are we going to see broadcasting?
ANDREW CRAIG: I'll answer the second question first. The television coverage for this event is separate and apart from any of our current arrangements. I would anticipate you're probably going to see a completely different broadcast team running this event. This is not part of our standard television arrangements. I think anything that helps us create a worldwide stature of the sport is obviously good for us. An event like this does capture the public imagination. I would anticipate that a lot of people who perhaps don't follow motor racing that regularly will be interested to have a look at this. The curiosity factor is going to be very high. Plus, we haven't gone into great detail today, but there will be a number of consumer competitions that will drive people towards the telecast. I think what it will do for us, not just in the USA, but internationally as well, is getting a lot of people watching our racing who perhaps haven't seen our racing before. If they like what they see, there's a chance they'll come back for more.
Q. Is there a charity involved?
DICK RUTHERFORD: There are several charities for events that we're producing during the week of the events. It's a week-long event, starts Sunday, ending the following Sunday. We're going to do Police and Firemen Benevolent Fund, Governor's Ball, things like that, all for charity. There will be a charity event every night of the week, with the exception of race day which will be our banquet ceremony.
Q. I'm curious about the split format of the race and why that was done. Do you worry at all that perhaps if you have an intermission in it, you may lose some viewers?
DICK RUTHERFORD: I'll answer that by saying we looked at this in great detail. I think that the excitement of the first part will grab everybody so that they will want to stay for the second half of the event, but also there's going to be a great mid intermission entertainment that people will want to see. It will have nothing to do really with auto racing, which is kind of unique in the aspect of promotions of television in auto racing. I'm not at liberty to say exactly what that is, but it will be bang-up stuff.
Q. Can you just shed a little more light, will this entertainment that's supposed to be on in the intermission, will it be something that will appeal to people on the pay-per-view broadcast? Also, when we've run races on airport courses before, that's Cleveland, will there be a lot taken into account that the things we see at turn one in Cleveland? The other part I'm getting to is we've watched CART's drivers go crazy when they're just racing for points and a fairly substantial purse. Are there going to be some extra things being done so things don't get completely out of hand?
ANDREW CRAIG: The entertainment and the gap between the two events is going to be something which will be broadcast and will have a strong appeal to the TV viewers as well as the people at the racetrack themselves. That's an issue for the promoter, they'll be announcing what they have in mind at a later stage. As far as the racing is concerned, you're right, this is an air field type of racetrack. In fact, tomorrow Tim Mayer and Kirk Russell will be out working with our promoter on the basic design of the track. They're going to be looking at this to make sure we build a racetrack which has all of the attractive attributes of Cleveland, wide straights, lots of room for passing. We're really going to try to produce a racetrack here which first and foremost has to be safe, as with all of our tracks. Secondly, it's conducive to close running, slip streaming, overtaking.
Q. Do are you expecting that the chief steward is going to have to work a little overtime? Like I said, usually these guys can get pretty intense even when it's just a regular race.
ANDREW CRAIG: Well, I think Wally Dallenbach always has to work overtime. Sure, there's no question about that. I'm sure the last few laps are going to make exciting television.
Q. I have a follow-up and a question. I heard this had been in the planning stages for two and a half years. The flipside of the coin is my understanding is that racing budgets are done 18 months out. Already this year another race has been added to the points, the regular series. I was wondering what the feedback of engine suppliers and others who already budgeted 20 races, their feeling to throw another race in the budget?
ANDREW CRAIG: I haven't had any specific feedback. Obviously you're quite right, it is an additional cost from a racing perspective. On the other hand, I think in the end, everybody sees the benefits of doing this now. I think the positive by far outweighs perhaps some of the negative.
Q. You mentioned retired drivers, but I'm sure if there wasn't any international rule broken for Jacques Villeneuve or Zanardi, I'm sure their credentials would be permissible to race in a CART race if the FIA didn't mind. Is there any possibility of seeing an alumni series champion in the race?
ANDREW CRAIG: Well, bear in mind that racing at this level is very much a team effort. As a team effort, it's a combination of driver, car, personnel, engine, tires, et cetera, so forth. I would anticipate to those teams that want to win the $5 million, which is all of them, they're going to want to have the best possible combination, and the best possible combination is someone they've been working with all year. The criteria to qualify is you have to have a CART license. I think what you're going to find is the field will be filled by those guys who are going to be out there racing in the regular FedEx Championship, 20 races throughout 1999.
Q. First question is technical, the second one is financial. If there is a crash in the first heat, do the drivers have any opportunity to repair their car and come back in the second heat? What is the ticket range cost? Has that been decided yet?
DICK RUTHERFORD: Yes, they'll have an hour intermission to do anything they want to get their car ready short of doing something illegal. The price of the tickets, that hasn't been set yet. I think they will basically be what our regular CART race is, between $70 and $40 for a three-day ticket.
Q. Could you expand a little more on the format? Will the first heat be straight up from time? Will the second heat be inverted? What about the possibility, since is a cumulative point thing for two heats, neither one of the drivers who takes the checkered flag first can actually win the $5 million.
DICK RUTHERFORD: There's two races, two 1-hour race events, then it's an inverted start in the second event. The winner of the race could possibly be fifth or 6th across the finish line at the end of that second hour. But that doesn't mean to say that we're going to have a unique timing process for at least our television viewers to see which car is leading in the points. If it changes during that lap, that will be shown immediately. You'll know the winning car, the car that's winning at that very moment, on every lap in the points.
Q. What can you tell us about the kind of investment that's going into the racetrack itself? When will the track be ready for any kind of testing? Will there be any kind of testing of the track taking place before the event itself?
DICK RUTHERFORD: There won't be any testing before, no. But the track, the runways right now, are really ready to race on. This is a naval air base even as we speak that's being turned over or deeded to the state of Hawaii on July 2nd of this year. But it has been kept up in remarkable shape simply because the Navy uses it. By the way, the Coast Guard also uses it. It's a very, very good airport, and there aren't any problems in the paving area. It's very, very wide. The main straightaway is 200 feet wide.
Q. I'm interested obviously with the similarities to the track in Cleveland. Can you talk about any conversations you had with the folks at Burke or IMG about running a race at an airport? I've heard that the airport might not be entirely closed down during the race weekend. Will it be partially open?
DICK RUTHERFORD: I worked with Bud Stanner (phonetic) on several aspects of this and will be continuing to work with IMG on certain aspects of this. As far as the airport being completely shut down, it is not. The Coast Guard is going to use one of the runways which is called four right during the entire weekend. The runways themselves are over eight thousand feet long. It's an enormous airport. You get to it and it's just awe-striking to see the size of this thing. We'll will not interfere with that part of the airport at all. We'll be 2000 feet from the runway where our part of the race is being run.
Q. When Cleveland first joined the circuit, I believe it was Mario Andretti who checked out the track, it wasn't an official test or anything like that. Would there be anything like that in the weeks approaching the race just to see how things would go for that track?
ANDREW CRAIG: A couple things there. I mentioned earlier on that Kirk Russell and Tim Mayer are over here, coming in tonight, to start looking at the track. Obviously, we'll be carrying out simulations to help our teams prepare for the event. I do not anticipate it will be necessary to put a car on the track. However, if after that review, after we've done simulations, we think that's necessary, obviously we can look again. This is a relatively straightforward exercise. I do not anticipate that will be necessary.
Q. Did you mention anything about a pay-per-view operator? Showtime, HBO, anything like that?
DICK RUTHERFORD: We can't divulge that right now. There's a press conference probably within a week on that. That pay-per-view operator wants to take the credit at that time.
T.E. McHALE: We'll take two more questions before we wrap it up.
Q. I'm curious why an airport course and not a temporary street course through Honolulu like we do in Houston?
DICK RUTHERFORD: Well, I wanted to have a racetrack where it we gave the drivers all the opportunity to show their skills. I didn't want a follow-the-leader type of an event. I'm not pointing a finger at any one race event. I'm merely saying I didn't want ours to be that way. Cleveland airport, as you know, is a great race. It's not any kind of a follow-the-leader race. There's opportunities to pass almost anywhere you want on that racetrack. That's what we wanted and that's why we chose what we did.
Q. Some of the comments I've heard among CART fans are that there they may be a little afraid that this might become an All-Star show, danger of it becoming a cartoon of itself. Have you given any consideration of that?
DICK RUTHERFORD: I don't quite understand what that means. I don't see that at all. This is going to be a huge event. It's going to be run and promoted as a very large sporting event.
ANDREW CRAIG: As far as we're concerned, we're going to have 16 world class race car drivers racing at a world class race facility with all of the standards that we normally have at our events. I don't know where that impression may have come from. This is going to be from an organizational point of view, safety point of view, racing point of view, it's going to be exactly what you'd expect from Championship Auto Racing Teams.
Q. Dick, talk a little bit about your background. You and Pat Patrick are old friends, used to be in the oil business together. Who is putting up the money? Is it you and Mr. Grayson? Is it a corporation?
DICK RUTHERFORD: Quickly on the money deal, it's put up by really David Grayson took care of the financing on this thing. The kudos go to him on this. But we have put a bond in place, a performance bond, which assures that everyone will be paid the money that's owed them and that the race will come off, irrespective of how much sponsorship we get or the pay-per-view or anything like that. Going back to me, you know me, Robin, for a long time. I've been involved with Indy car racing since 1970, old Indy car racing, CART now, excuse me. You know, we've had three wins at Indianapolis. I've just won loved it. I went to Indianapolis 43 years in a row before I quit going four years ago. I loved Indy car, never had anything but love for them. It's my game of golf. I've never done anything else. I don't play tennis, do anything of those things. Racing has always been my deal.
Q. What is your business now?
DICK RUTHERFORD: This is it. This is for the grandkids. No, I've retired. I'm just working full-time. I've worked harder on this thing than I've ever worked in the oil business or for Pat Patrick when we worked together.
T.E. McHALE: At this point we're going to wrap it up for the afternoon. Went to thank Andrew Craig, Dick Rutherford, and David Grayson for joining us this afternoon. We want to take all those of you who took the time to be on the call. We'll talk to you again soon. Thanks and good day.