CART MEDIA CONFERENCE

October 1, 2002

Don Panoz

Chris Pook

DON PANOZ: Thank you, Merrill. First of all, I think the concept of the Grand Prix of the Americas coming back to race on the streets of Miami is just reliving history again and a history I think that was built over the years as one of the most exciting races in the United States. I think that this ability to come back to Miami and you know, resurrect the great street races in Miami is a fabulous opportunity. Of course, as far as our cars go, I think the fans are going to be very well served by our format of LeMans Racing, four different classes of cars, racing on almost 1.6 miles of circuit there in Miami. The Top Class being about 60 miles an hour faster than the GT class. And I think that with the drivers and the show that we will put on, I think the fans will really be excited and I think they will see a great race.

CHRIS POOK: First of all, I think it is important to reiterate what Don said that, the City, Downtown here as a great history. It started here when Ralph Sanchez put on the old -- what was^ IMSA and it was the same type of -- virtually the same type of racing cars that Don's series operates today. And that was incredibly successful over the years and then the IndyCars came in the, first of all, at and then they moved back to the streets here in Miami. The combination of the two series I think reach out to the fans of the state of Florida and even further north. I think the fact that the two of us are cooperating this weekend and racing together, clearly shows a very high level of cooperation between two major sanctioning bodies. I think it also demonstrates that we can reach out to a set of demographics that's truly unique in motor racing. The demographics of the CART FedEx Series and the demographics of the American LeMans Series. And while there might be a little bit of crossover in certain areas, I think you look at those demographics and it is a very, very wide set of demographics that we're reaching. And what better place to do it in Miami while being an incredibly important city in the United States in the sense of the size and capacity of its market and market reach. Also we must remember is the cultural and corporate gateway to Latin America, Central America and the Caribbean. So if you look at the two products that are on track -- well the three products, excuse me, because I have overlooked TransAm which is a very, very important part of our weekend as well, look at the three products that are on track, look at the market reach of Miami, and then you look at the heritage of what is here in Downtown Miami, I think that you do, as you said, have a very unique combination and a combination of huge value today and of incredible marketing ability in the future.

DON PANOZ: Well, I think it's not just exploratory, it is an opportunity for us to show our wares as Chris very ably said, we both cover with very little crossover a unique demographic. That's point No. 1. And will certainly be able to show our respective supporters each other's show. I think that with us getting together in Miami and anybody that hasn't been reading the newspapers for the last eight months, would know that us joining together was a response that was necessary because of a lot of the opposition that was presented against us. And I think it is a good opportunity for us to turn that challenge into a real opportunity to put on a great show.

CHRIS POOK: I agree totally with what Don said. By the way good afternoon, Gary. Appreciate the dinner the other night. I echo what Don says, I would term this certainly more than exploratory. This is an effort that we have putting on together to see what the challenges are of operating two major series on the same weekend at the same venue. And what are the yields that both series can get from the combined opportunity in the marketplace. Now, as far as the challenges are concerned, absolutely there are challenges. We have two different types of race cars, two different sets of disciplines in the pits. We have a whole -- both of us have a whole bunch of support equipment and the various things that make up, if you will, the circus, and the logistics of putting all this together are a test of both our staffs. The key I think for Don and I though is to show the leadership that we want to work together and that the staffs must work together if we're going to succeed. And I think that once we do, as we go through this process, and it is going on already because both staffs have been down here, both management teams have been down here all week and we're working through the issues together one by one. It is a lot like a marriage, Gary, where if you want to have a successful marriage both parties have got to give 60%. And we're working in that vein here, and at the end of the day, what our responsibility is, both of our mutual responsibilities is one to the other to make sure that the other one has all the breathing room in the world to demonstrate the quality of their product, of each one's products. My responsibility to Don is make sure that his management team have all the room and space to demonstrate the quality of their product and his management team to us vice versa. The real delivery vehicle, who both our mutual responsibilities really lie with, though, is with the City of Miami because the City of Miami is the de facto, our partner. We're using their streets, their city, and it is our mutual responsibility to deliver not only the economic impact to the City of Miami that our two mutual series can bring to this city. But it's also our responsibility to deliver all the marketing opportunities that the City of Miami is seeking both from its port, from its airport, from its hotels, its restaurants, its redevelopment agencies, its community development agencies, its government relations agencies, this is what we have to do. We have to deliver and make sure that the City of Miami gets the value out of the investment that they have made in their time and effort in allowing us to use their city as our venue.

DON PANOZ: Well, I think that certainly what we'll see this weekend and we already know Chris has shared with me that hospitality and everything else is really sold out and that we expect a very good crowd and a very good support group of fans that have come in and not only are just buying tickets but they are buying all the other things that are important for a race. Chris said it so well a while ago, he said that this isn't exploratory. This is an opportunity for evaluation. And I think that it is like anything else in business, if this kind of model shows a good result, both of us will be looking at how we could explore that and what other venues it could make sense that we could do a show like this. It could be that maybe the event would be limited when we evaluate them and maybe only be a couple of street circuits or it could be that it could be something bigger. But I think both of us will be having and our staffs will have our eyes open to look at all of the events that are going on there this weekend. How they play out; how they are accepted by the fans and the media, and too look at what we can turn that into for the future. I think we'll be going into this with eyes wide open and we'll be there to judge it based on the facts. And that's the way -- I think that's the way we'll be responding and Chris can speak for himself.

CHRIS POOK: I agree with Don there. I agree with absolutely what Don said. I think that we have to evaluate which venues make sense for both of us. We can't overflood the market, if you will. There are certain markets and venues where American LeMans Series will stand alone and has a very good track record and will work it. Likewise, for CART, but then there are other markets and this is a very good example here because let's fact it, this market has seen both of our types of racing before, and has been very responsive to both our types of racing, and had very successful events, so this is a good one as a starting platform. But I think there are indeed other markets. But I think that that's for Don's management team and my management team to evaluate together and to come back to the both of us to say, look, it makes sense here; it doesn't makes sense there. We have to thread very constructively together down the road and we have to look at the impacts of what these sharing of markets or joining together in a market means to our respective sponsors and are we able to deliver increased value to those sponsors by combining together in a single marketplace. I think that's the real key.

DON PANOZ: If I might, I think that not only that, but I think that we could be looking at a possibility of a formation of what is really a super race weekend and where it's not just a Sunday afternoon main show with support racing, but just really a whole super weekend which includes Saturday and Sunday and value and entertainment; the fans can really get their money's worth and can enjoy it. And also, a great shingle for the sponsors.

CHRIS POOK: I think those concerns are valid. Both Don's team and my team have concerns in those areas. We have to work our way through them. We have already got a track layout for 2003 that I believe will work even better for both sides, but this is the deck of cards that the City of Miami have so graciously provided with us this year and we're going to work with that deck of cards. And yes, Gordon, it is tied in parts and yes, maybe it is a little slow in parts but I know our drivers will adjust. A couple of them will have a little bit of indigestion but they will adjust. And I am sure Don's drivers will adjust. We have to look at these venues, these type of venues as not what it is exactly today. It's what we can develop it mutually into in the future. That's what this is about. This is about building a business, building a franchise. I think that's what we and the American LeMans Series wants to do together. We'll have a couple of hiccoughs and we'll fix them and we'll move on. Nothing that we haven't endured in the past. You have been around quite a few years in this business. You have seen these hiccoughs come and go. We had them at Long Beach when we started. We had hiccup at Denver. We had hiccup when we first did Las Vegas. When Toronto came on board, it had one. Montreal, when it first came on board it had one. It's the nature of the beast. At the end of the day we have got to remember that for 362 days a year these streets are for normal passenger cars to drive on and buses and trucks and what have you. It's only for three days that we turn them into a racetrack. So we have to make the necessary adjustments in each city we go to.

CHRIS POOK: It is a hell of a deal right now.

DON PANOZ: Chris said it, it is a good opportunity for us to work together. As far as me looking at doing a leadership role in CART, I can tell you I have got my hands full doing a leadership role in the American LeMans Series. And I don't think that with the expertise that Chris has had over the years in not only putting on races but now being CEO of CART, that there's much that I can contribute except moral support and attaboys, let us go make some great racing. My opinion is that CART shows a special type of show, open-wheel racing on road courses. It is exciting. There's passing opportunities that are coming up. Drivers have to be skilled in that, as our drivers have to be skilled in it with our different classes of cars. And so I think that the show itself and the combination with us we'll see this weekend at Miami how it turns out, and we'll go forward looking at what we can do together to make racing better and to provide a better show for certain venues if it happens to work out that way. But I am a supporter of CART. I am a supporter of racing. I think that racing is important. It's an important part of American life, and I have said many years ago when we first started our series in the USROC cropped up opposite, I said then that I believe in racing and for that first year my cars raced in both series, the American LeMans Series, and in the^ USROC. Of course when GrandAm cropped up after that that became a different story. But I do believe that good racing is what American people want to see. It's the largest sport in the country, and our job is to provide our segment of that type of racing in the best and professional fashion as we can. And anything I can do to support CART and also providing good racing, I will be there to do it.

CHRIS POOK: I welcome to have Don Panoz be a holder of stock in CART, and would welcome his involvement, his breath of knowledge of business is unprecedented and I can only tell you that he'd be a huge addition to us. So if Don has got a few minutes to come and participate with us whenever he can, we would welcome it with open arms in our company.

CHRIS POOK: Obviously economic yield we sincerely hope that we'll be able to yield in the first year somewhere between 25 and 30, 35 million dollars yield, direct yield to the City of Miami, the greater Miami area. I mean, after all, that's why they have invited the two of us back. In gross yield, you know, somewhere in the area of 150 million dollars gross economic impact. That's what we -- hopefully we'll deliver to the community. As far as economic yield to our sponsors are concerned, that's something though that would have to be evaluated afterwards. We can think what we can deliver to the sponsors, but at the end of the day, the sponsors will tell us what they see the value in. But just looking at the older sponsors that are involved, not only in our series but at the venue here, and I suspected in Don's series, we have got folks coming from the Miami market area. Now, for the Miami market area, let me remind you that is not only the southeastern part of the United States but it's the Caribbean, and Central America and Latin America. You look at the folks that are entertaining here and who are involved in cars and sponsorship, et cetera, you will see a huge, huge wide range of sponsors, probably the widest range of sponsors to ever appear in the United States in the recent decade. So all those things are very important to us as we go forward and how we measure it. And we'll get a feeling certainly I would say to you by the middle of the day Sunday, certainly the latest Sunday, I think that Don's management team and my management team will be able to give us the read on what folks are saying about the value of the experience for them.

DON PANOZ: First I thought Three Rivers was a great experience. I was really surprised. I don't know whether you said you didn't see me but I can assure you I was there, and fabulous restaurants, great fans, a real entertainment type atmosphere. Our race teams all commented that it was - even the surrounding environment and the entertainment and the restaurants and stuff, it was just like being back at LeMans and in fact, in some of the cases even better, particularly about being able to get around and being able to enjoy the atmosphere of the city. So we're planning on coming back there. That's no secret, and I will look forward to it. I thought Three Rivers, it is a city track and it is a city circuit and by the way the space under those bridges is narrower than the narrowest spot than we have in Miami. So we seemed to cope with that all right. So I think that, you know, it bodes well for us. It was just a great show. I really enjoyed it.

CHRIS POOK: I would just comment that I assume you are referring to CART's efforts in Canada in your question.

CHRIS POOK: I am not going make announcements on behalf of my teams as to who their drivers are and what they are doing. But I can just tell you that we're on target again for 18, possibly 21 cars. We have two new teams coming here to Miami to discuss with us joining our series. We have a team in the past that missed this year that will be coming back next year with two cars with us. And we have three one-car teams, the three that are in the series this year who I can tell you will be returning in -- at least two of the three will be returning with two-car teams as against one-car teams. So things are moving pretty rapidly. The last 24 hours has been a lot more movement and progress, and we got an interesting array of drivers who are wanting to be in our series. I think what is really important to us now is that there is a recognition taking place that the CART Series can produce drivers for Formula 1, and the reminder of the Montoya and Villeneuve experiences, the products that have come out of our series is resonating at home; obviously underlined by damatta and the high level of interest in him in Formula One as we speak, that's ringing the bells throughout the Formula 3000 series and the Formula III series various Formula III series in Europe and there's a fairly interesting array of drivers and managers and backers who are appearing here this weekend.

CHRIS POOK: Well, I mean, I don't think we have to unite but we seem to have common foe here, but with regular occurrence seems to be beating on us, and it's a little disappointing. I am simply disappointed down here in Miami because, you know, the City of Miami wouldn't be doing this race if they didn't feel there was a need to use automobile racing to create some economic impact for their Downtown area. I think what is very disappointing to me is that in the past when we started Long Beach there was opposition from Riverside and a little bit of opposition from Ontario and we reached out to both of them, and we established a working relationship, albeit, the first year tenuous, but whereby we worked together and we promoted their races and they promoted our races. Suddenly they found that both of them had a whole new load of fans that were going to their racetracks because the Long Beach folks, 80% of them, had never been to a motor car race before. And it turned into a successful relationship. And I picked up the phone here about three months ago to Jim ^ Franz and said to Jim, Jim, let's work together as a team here, don't lets fight. You know, let us promote Homestead here and work together, you know, because the two of us working together, the two venues working together can help. Certainly we can help Homestead and I think that Homestead can help here a little bit. But that offer was rejected and it's unfortunate, but the opposition continues and it is disappointing because this is a free and open marketplace. At least I believe America was a free and open marketplace where one had the right to compete where one wanted to. And I am not sure that an exclusive franchise for motor racing has been granted to Homestead. And if it has been granted, by whom was it granted? So this is all very disappointing because at end of the day if we in motor sports all work together as a team, we're going to be much more efficient and much more effective. But it is what it is. We have got our business to run at Championship Racing Teams. Mr. Panoz has got his teams to run at American LeMans Series. While I don't want to speak for him, I suspect that his philosophy is the same as ours, we're going to get on and run our business and run it the way we want to run it and by "we" that's to say "we" CART, and "we" ALMS and when we work together as we are this weekend, we arrive at the same mutual policy together of how we've got to operate this event. So the "we" becomes the two of us. And we're not going to allow other folks to dictate to us as to how we run our lives.

DON PANOZ: I just ditto everything that Chris said. I'd like to add that it's amazing to me that the guise of objections from that camp a lot of it was on the basis that it was doing a great harm to Homestead and people in racing. And I am sure you guys in the media know that the people and the demographics that go to these two venues are quite different. Point No. 1. Point No. 2 is that a lot of the people who will be coming to this race in Miami are not the ones who go down to Homestead. The real victim in this is -- and the delays of this and part of the injury will be the City of Miami, which was a great supporter of Homestead. I just feel it's completely unjust and I think that those people who keep pursuing this line of attack and although I must say, I am pleasantly surprised that from the figures that we see and stuff, the fans are ignoring that and are coming to the race. But the fact is that I think Miami is an unwilling victim in this and I think that the people are being very short-sighted.

DON PANOZ: Chris is the keeper of the tickets.

CHRIS POOK: I think that if we can put in -- on race day here 35 to 40,000 folks here next Sunday and we move them in efficiently and give them a good show and, as I say, Saturday, we do a similar number, move them in efficiently, ALMS gives them a good show, we get them home efficiently and effectively and do the same on Sunday, and we work through all the operational challenges that a first year event has, that's the objective, I think we both will be very, very happy. The important thing is that as I said before, we deliver a quality product - deliver a quality product to City of Miami and we need to go out and deliver a quality product to our fans. That includes getting in and out, having fun, good food, good entertainment, good camaraderie and good racing.

DON PANOZ: Well, from my point of view, I mean, the first, outside of Adelaide Australia, first city race, a Downtown race we had in the American LeMans Series was Washington D.C. and certainly it turned out to be a really good show and had a great television presence and it helped our series tremendously. I would hope that the same will result from the Miami race.

CHRIS POOK: That's the same answer I would give, I think, to this situation. You are right there will be wall to wall racing for Miami Saturday and Sunday which is very, very positive. But I think just, you know, what we're both trying to do is to build television ratings and if we can show the rest of the country that we have on Saturday 35 to 40,000 folks and Sunday 35 to 40,000 folks that are sitting here in the sunshine of Southern Florida watching a street event, having a great time, I think that bodes well for other venues. It bodes well for the folks up in the mid-Atlantic region that will be going out to Washington D.C. again to see Don's cars race there, next year. It will bode well for our fans who are sitting up in Tampa, St. Pete some of whom will be here taking a look, but some will be watching on television, and they will be able to see what they can expect next February in that market area. So the game plan here is to build attendance at the city events and then eventually the television ratings will come along. It's a game plan that quite candidly the NFL adopted 30 something years ago and it has worked out very well. I suspect that both ALMS and ourselves are conducting a little plagiarism in following that same game plan.

CHRIS POOK: He is motor sports in South Florida. Neither of our series would be here. We would not be here if it wasn't for Ralph. Homestead would not be where it wasn't for Ralph. He was the pioneer in the marketplace here. And you know, while he's not directly involved, you know, Ralph Sanchez is all over this place and so he should be. He deserves every bit of credit in my book for what goes on in South Florida and in -- motor racing, in general, owes a lot, not just South Florida, but motor racing in general owes a lot to Ralph Sanchez. We intend to salute him here this weekend and he deserves it. No one deserves it more richly in my opinion than he does.

DON PANOZ: I would echo that. If it wasn't for Ralph Sanchez no one would ever have known how great the Miami races can be. He, as Chris said, he was the pioneer, and he set a standard and it is that nostalgia of those races that the fans remember and it's what we're going to try and bring back in Ralph's honor.

CHRIS POOK: I am not going to discuss investments with all due respect and it's not to avoid your question. We're a public company and there's a certain discipline and methodology we have for disclosing our expenditures and how we spend our money, so forgive me for that. The first question: As soon as all the matters are revolved with regard to the long-term agreement or semi-long-term agreement between the City of Miami and Raceworks then it calls for us to execute those documents. And that's being worked through as we speak and hopefully very shortly we'll be able to sign that agreement.

CHRIS POOK: We are in an October date mode against next year. Part of the agreement that Championship Auto Racing Teams has with Dover Downs on the Tampa, St. Pete event is very similar agreement that exists between Long Beach and Fontana where there is a time and distance clause in the contract that prohibits us from coming in here into the April marketplace. The second part of that is that I am not sure that Downtown Miami needs economic impact in the timeframe from January through May the 15th, May the 1st because this is the boom season for this city from Central America Caribbean, Latin America and of course from the United States and Canada. The time of the year where it does need or can use, I have misstated the word need, where it can use economic impact is the early fall. That's why I think one of the reasons we are here and one of the reasons why you see such huge support from all the hotels and the restaurants and the hospitality industry in this city.

DON PANOZ: Well, I think that when you put together these two shows you are covering a wide spectrum of the fans, a broader spectrum than we, ALMS cover, and I think it's probably the same for CART. I think as we build this, I think that over the coming years, I think there's a good prospect that you can see some of the biggest crowds that you have ever had at racing in Miami. And the ones that Ralph created were fantastic and I just -- I am just looking at where we can put them all. I think that the fans will enjoy it and I think both fans will enjoy the other type of racing - at least I hope they will - and I just see it as a positive and a good opportunity. Of course, the facts could prove us wrong and the facts will speak for themselves. But I think it's a great opportunity and we need to do it.

CHRIS POOK: Well, yeah, the overall answer is yes. But it is a chicken or egg answer; isn't it? Which comes first? Attendance at events by history builds television ratings in marketplaces. So our objective this weekend here is to remind the South Florida market ADI of what fun these events are and how tremendous it is to have people excited and cheering in the grand stands, really enjoying the event and seeing it on television. And then when the next event comes up on television, which I believe for Don is Road Atlanta, and when the folks see that on television, they will tune in and watch that, the folks of South Florida. When our next event comes up which will be Australia, they see it on television and they tune in to watch that. That starts to build our television ratings because it gets another major market engaged in the process of watching a television set. So that's really what we're -- where we at CART come from. We want to build a marketplace and the South Florida market, the Miami ADI, is a very, very important television ADI. And if we can build this, the viewers up in this market, that will move the needle on our ratings.

DON PANOZ: From my part, we're still creating our series. We're the new kids on the block. '99 was our first full season and we're learning a lot and we have gotten into a lot of new venues and a lot of them were the first time this year. But I don't think it's so much reinventing ourselves -- we are finding out how good we could be.

DON PANOZ: We're finding out how good we could be.

DON PANOZ: I think we're recreating it. Everybody tells me, I wasn't around or wasn't in the sport at the time the great days of^ IMSA and the Camel Lights, et cetera, et cetera and about all the great racing there was and including in Miami. But I think we have managed to retrieve a lot of those loyal fans and have given them something to watch and they are seeing good racing and good competition, and that's what they want to spend their money for.

CHRIS POOK: I don't think we are recreating ourselves here. CART is what it is. I think that what I am, as the CEO of CART is endeavoring to do, is to reposition our management, philosophy and our outlook towards doing business with host venues such as Miami, with potential partners such as American LeMans Series and the overall way that CART conducts itself, its day-to-day business.

CHRIS POOK: Since we're on the hook here with the promoter, I will explain that at the same time the discussion we had in Denver and the discussion we'll have in Tampa St. Pete. The most important thing we have to do here is to manage the number of people we have in attendance and make sure that we manage them well, in the sense that they get in and out effectively. They don't have parking problems; don't have ingress and egress problems; they don't have standing in line at bathroom problems, and concession standing in line problems, and that the food service through the hospitality goes extremely smoothly. We are not -- this -- I come from a school where you live and die by the stand of the product you present the first time out. We intend to limit the number of people we have here. This is not a one-year shot in the dark. It is a long-term project here. And like any other business, it will take at least three years to build and get up on its feet and we'll take the steady growth approach, but it will be steady but firm and solid approach and we'll do things properly. We have little interest in jamming volumes of people in and having a mess on our hands.

CHRIS POOK: I don't believe 40,000 represents the demand. We won't be able to answer that question until Sunday or Saturday, but we said that Denver when we first started Denver and Dover the same thing that we were going to limit Denver to 45 to 50,000 people on Sunday and they successfully did that and they ran a very successful weekend and we intend to do the same thing here.

CHRIS POOK: Having been in the street racing business for 30 years, I understand the business of injunctions being brought at the last minute. I am sure that if they intend to do it, they have got three or four days to do it in. Having known about this event for the length of time that they have known about it and the amount of opposition they have presented on the way down to the event, I would have a hard time really understanding why they would wait 'til the last 72 hours to ask for this injunction.

DON PANOZ: As far as I am concerned, that's a work-in-progress and it will be part of our discussions after this race and we'll be looking to see where it makes sense. We have a schedule pretty well inked in for next year and we'll be announcing it at Petit LeMans the week after the Miami race. But I think Chris and I both are business people and we're going to look at what makes sense for both of us and for our respective series, and if there's an opportunity I can assure you we'll chew it over like a good piece of fat and see what we can squeeze out of it.