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NASCAR MEDIA CONFERENCE

July 3, 2007

Brian France

HERB BRANHAM: I'd like to welcome all the media to our weekly NASCAR teleconference in advance of Saturday night's Pepsi 400 at Daytona International Speedway.
That will be the 18th race of the 36-race NASCAR NEXTEL Cup Series season, and the second event in the Race for the Chase. The Race for the Chase is a 10-event span that precedes the Chase for the NASCAR NEXTEL Cup, the season's final 10 races, and ultimately decides the series champion.
We have a very special guest for today's call. It's NASCAR's chairman and CEO Brian France.
Brian, thanks for joining us today. Perhaps if we could start off with a quick assessment by you on how this season has gone thus far, and then we'll go right to questions from the media.
BRIAN FRANCE: Thanks, Herb. Good afternoon, everybody.
First, I want to thank everybody on the call, and frankly the fans across the country, all over, that have reached out for our family when my father passed. There was an enormous amount of support we felt by the whole industry. We're very grateful for that. Lots of nice stories and reports done, reflecting what my dad accomplished in his reign at NASCAR. Thank you all for that.
I'll transition now into kind of where I think we are. As Herb said, we're exactly the midpoint here in our season. I will tell you that all important goals that we set out at the beginning of the year, we're either meeting them or exceeded them. Car of Tomorrow being the most important one, all benefits we hoped we would get, better competition, the safety elements - fortunately we haven't had to fully test that yet - and certainly the cost side of it, as you see so many teams now running the same car.
Kevin Harvick has run the same Car of Tomorrow in nine different events, including the road course. Our vision of how we thought that was going to go has gone very well. In fact, so well, as everyone now knows, we've accelerated the launch fully for 2008 at every NEXTEL Cup event.
We couldn't be more pleased with that. It was very complicated. A lot of cooperation with the teams. I want to tell you that that went well.
I want to welcome back TNT, who is covering our action including this weekend here, the mid summer package. Like what they're doing. They have a very innovative new strategy coming up this weekend broadcast, commercial-free, wide open as they call it. We're all interested to see how well that's going to do and looking forward to it.
ESPN here shortly will pick up the remaining events, including the final Chase events on ABC. Love what they've done already with the Busch Series, all the ancillary programming. When the Brickyard kicks off, they'll kickoff. So excited about ESPN.
Many of you know that I was myself, some of our senior management group, was in Asia and China specifically looking at the new track in Shanghai, talking to some people about international opportunities in the Far East. Nothing to report other than every time I get on the road and talk to people they're very familiar with what we're doing, like our style, like our brand of racing, lots of interest.
We'll be careful of how we proceed, but we'll be looking at building our international platform with our event now coming up next month in Montréal, and of course having competed with the Busch Series south of the border in Mexico City. Both of those events, one we've already run a couple of years, but we're very optimistic about the Busch event. Lots of interest in Canada. We knew there was a big fan base that was already there.
Now taking a live event to that historic road course, we're all excited, lots of interest, and we'll see how that goes.
The Busch Series, we do have a lot of discussions going on. Nothing new to report on the entitlement sponsorship. Our goal we said was to announce something sometime this summer. I'm pretty optimistic that that's going to happen.
We're going to get a partner for the long haul of the country's second most popular form of motorsports. That announcement will come several weeks or so down the line.
Couple of other things that are always of interest, topic of the day. One is on the legal front, the two big suits that the industry has, we have specifically, being the one with AT&T, which is under an appeal right now. Not much I can add to that other than we still feel, despite some earlier rulings, very strongly about our position, trying to resolve that through the court system.
Also the anti-trust case that would have a very big impact on the entire industry is going down the road of the court system, as well. That will get concluded sometime early next year, if what our legal counsel tells us happens, in terms of staying on schedule. We're very adamant about our position. We look forward to defending ourself at the appropriate time.
Finally, I want to spend a moment on alternative fuels and really what we think going green, being environmentally sensitive, we know they go together on that. Through Sonoco, we'll be stepping up our efforts, making sure we're doing everything we can looking at alternative fuel options. That may be way down the road. It may be partial progress. We're really going to school very, very diligently here trying to sort that out.
Whatever we would do would really only have more of a symbolic movement in terms of a benefit. However, that's important. It's important for NASCAR to lead in some areas - this being one of them - when it comes to the environment, when it comes to our dependency on foreign oil. It's important for us to stay in a leadership position, and that's what we're going to do.
Mike Helton and I were up visiting some people in Detroit recently. We're taking an accelerated view of how we'll be looking at that.
With that, I'm happy to open it up to any questions.
HERB BRANHAM: We'll take questions for NASCAR chairman and CEO Brian France.

Q. Along with your assessment, it seems like there's been sort of an avalanche of news coming out, especially of NEXTEL Cup this year with Dale Jr. and all that, but also a lot of it has to do with what the mainstream media would call cheating and technical violations of the Car of Tomorrow. Part one of this is, is there any concern that the crackdowns actually seem to be generating more cheating stories than before? Also, would this deluge of news this year, there's been a lot of coverage of TV ratings and attendance being off somewhat. The New York Times had a very prominent story a few weeks ago, Has NASCAR leveled off? Can you give me what concerns you might have on both of these fronts.
BRIAN FRANCE: Well, I'll take the first one, which is the recent penalties we administered to both the 8 team and 24 and 48 teams concerning the Car of Tomorrow. We feel very strongly that we're going to be very, very tough on people that test us with the Car of Tomorrow. The whole premise is built around not being able to do much, fudging much, with the car.
In our view, there's going to be various instances that have occurred, like they already have, where people are either unclear or want to see how we'll react. We have kept a very steady theme that we're going to continue to escalate the penalties.
In fact, with the 8, 24, 48 at Sears Point, we added on not letting them qualify at a road course, which pretty much eliminated them from contention of winning that race in our view. I think the drivers would agree, and significant points and monetary fine.
We'll continue to do that, in particular with second repeat offenders to get the penalty right. What we can't do, though, is customize penalties, because in this case, the 24 has a big points lead. We have to be somewhat consistent although escalating them.
Your second part. Look, ratings in sports, depending on the story line, what else is going on, lots of factors. They're always choppy, even for us. They have been in the past. You have to look at things over two-, three-, four-year cycles, not three months. Our product is still very, very strong.
Once again, last weekend the number one watched sporting event of the weekend. We are either one or two almost every weekend. Attendance is doing very well. No concerns there. We are tied a little bit to rising fuel costs. We're not immune to those kind of issues.
From time to time our fans are affected in the pocketbook, and that will show up from time to time.
But by and large, we're very content with where this sport is, how we're positioned, and looking forward to finishing out the rest of the year.

Q. In monitoring what's been said on the satellite radio talk shows from the Hendrick Motorsports teams from the Sonoma violations, there seems to be some segment of your fanbase that is fretting about the legacy of ingenuity and creativity they love about NASCAR. The legacy may be being stifled by the ongoing crackdown on working in the gray area. How would you answer those concerns, and why is it so important that NASCAR tighten up its rule book? Is it about containing costs, improving competition, a greater emphasis on honesty and integrity, or maybe all of the above?
BRIAN FRANCE: It's all of the above. The first benefit you would want to realize is the safety benefits for obvious reasons. When we got into the Car of Tomorrow, we said, Look, let's go to work on the other two important categories for us, performance and cost.
Here is what I think about the creativity side. There's always going to be plenty of creativity to be had. We love the fact, and you're hearing it from the drivers, it's putting it back into the hands of the drivers. We are not in a technology contest, although there's a lot of technology that flows around our industry.
We're happy about that. But we want it in the drivers and hands. We want it in strategy. Look at just this last weekend, the strategy of taking two tires for Denny Hamlin versus four ended up paying off for them. That's what we want, the strategy of the crew chiefs and the driving ability of the drivers to be the focus, not who has the latest gizmo that NASCAR didn't want to say no to that's in their car that nobody else has.
We're not about that. So we're happy with going in a direction we're going in.

Q. The fans love to hear what sort of things you're thinking about, what concerns you hear of theirs. When you're hearing angst from the fans, how do you get that feedback? What things are the fans concerned about that you're following now and working on and your to-do list?
BRIAN FRANCE: We listen like anybody else. We want to hear what our fans say. Sometimes we know that things are going to work out because we sort of know the answers to some of the questions that are out there. I know there's a -- an example: There's a lot of questions about with fines escalating to a higher number. Shouldn't they be possibly distributed in the points fund where we put penalties and fines today and move it over to the NASCAR foundation. That's one thing we're hearing a lot on the airwaves. We're going to look at that. Those are the kind of things we look at. We'll look at a lot of things.
That's the way we should. Our fans are the most passionate of anybody in sports, so we get plenty of opportunities to hear how they feel. That's great for us.

Q. On the penalties again, is there any concern that the severity of this year's penalties has muddled the distinction between what is flagrant cheating, like what Waltrip did at Daytona, and what has always been considered pushing the envelope?
BRIAN FRANCE: Well, it's always a fine line. We have the mechanical element of the car that's always there that is unique. What's a competitive advantage? What's an egregious violation? What is an accidental, something breaks, the car comes to a different height, whatever it could be? Lots of judgment calls we have to sort of work through when we come up with determining the actual.
But our guys, you know, they've been doing this for 50 something years. We have a lot of expertise and a lot of history at trying to, you know, get at these intersections and turn the right way. I'm pretty confident - I'm very confident - in our group to do that.

Q. The teams that are penalized for cheating continue to perform extremely well, like the 8, 24 and 48. What can NASCAR do to make those penalties hurt? Now that Montoya has won a Cup race, what does a successful Montoya mean for NASCAR?
BRIAN FRANCE: Well, I think the teams that are winning, despite what we may fine them, are just good teams. They're going to win when they race with the same rules package everybody else has. The good teams, they get through any kind of adversity to a point.
The question always is: Are we putting the right punishment to the crime? With an eye on deterrence. We don't want to see people challenge the Car of Tomorrow or any other thing any more than we have to. There will always be some of it. We could have any particular penalty structure and we could face somebody that is willing to think they can outsmart us and get through something, whatever. They may be in a desperation situation, taking a risk. There are any numbers of things.
But we're very confident, that, as Mike Helton said over a year ago, we're going to escalate these penalties to a level that it's not worth taking the risk. The only difference is, as we go through this, as we say, escalation of fines, that we can't just customize the penalty based on the circumstances.
Meaning that, you know, the 24 car who had compiled a lot of points, we could not just say, It's going to be 200 points instead of 100 points because he's got a big points lead. That's not how we can administer the rules.
But we will find the right penalties, believe me. A lot of people, including the Hendrick organization, thought we went too far. It's a balance. They don't like to have to wrangle with these issues, but they will.
We've said Juan is a very talented guy. It was a good win for him, a good win for Ganassi, the whole organization. Ultimately, you know, he qualified very well last weekend at Loudon. He's going to keep competing. He's a very talented guy.
We would think, number one, if he's successful, sure it will help us. It will help the sport with the Hispanic fan base that we're trying to create, trying to generate interest for. He's a great talent. We're optimistic, like a lot of people are, that he'll have success in NASCAR.

Q. You said the Kentucky lawsuit could have a big impact. What type of impact do you think that could have if you lost that lawsuit?
BRIAN FRANCE: Well, we're just defending the whole industry's rights. We created an industry that a lot of people eat out of, that we're all proud of, that people are reliant on and count on how NASCAR does business.
They would like to rewrite all that and benefit themselves. That's wrong. That's wrong to think that. We're going to hold up our end of the bargain and defend ourselves and defend everybody's right to manage the industry the way we have for the last, you know, 50 years, which has an undeniable success story anywhere you look. So that's what we're going to do and that's what we got to do.

Q. On the issue of TV ratings, have you been able to correlate anything with the start times? What are you looking at as far as start times in the future?
BRIAN FRANCE: We look at that, sure, with our TV partners, try to weigh the benefits. There's not much that is even in prime time or anywhere that doesn't have some ratings falloff right now. There's no sport, but there's also no general program that isn't having some ups and downs.
There's a lot more to do with the Internet, the iPhone, every other thing that's gone on. We're all trying to build our audience. It's harder than it was five or ten years ago. People have more choices. That's a fact every sport has to contend with.
We're not surprised or deterred. We've got a good situation and we're trying to make it better.

Q. I wanted to ask you a little bit about realignment. Has that kind of played itself out at this point until new tracks can get built in new markets, or is there a possibility some races could move to other tracks at other markets before new tracks are built?
BRIAN FRANCE: It's definitely a possibility. I don't know if it's a probability, but it's sure possible. We had that open to the whole industry. We'll take a look at any requests that are made. It could happen, it could not happen.
If new tracks that are proposed come online down the road, it would certainly be more likely at that point that they would. But, you know, all those things are bridges that we haven't crossed yet.
But the answer is, you know, our policy stands and we're open.

Q. Several times this weekend TV and radio made a big point to say that the suspended crew chiefs were not inside the track but on property. They were in communication with their teams. That seems to me that doesn't really meet the spirit of suspension. How does NASCAR feel about them still sort of working on race day? Is there anything you can do to police that?
BRIAN FRANCE: Funny you ask. We just had a meeting on that today with Mike Helton, myself and others. We will be -- if that all is accurate, we will be addressing that shortly.

Q. I take it you agree that's not in the spirit of suspension?
BRIAN FRANCE: I would agree and we will be addressing that very shortly.

Q. Back to the penalties again from a different angle. You keep talking about escalating the penalties and so forth, but there's more than a few people who believe the only way it's really going to stick is if you send a car home, but that NASCAR is unwilling to do that because it doesn't want to upset all the fans and the sponsors of that particular car. You end up looking like the emperor with no clothes. I'm wondering, is there a case, can you actually envision the penalties getting to the point where you actually lock a car from being in a race and not letting the driver drive?
BRIAN FRANCE: Sure. We'd like not to get to that. We'd like to make the deterrent, a portion of the penalty, significant enough that that isn't necessary for us to do. But are we willing to go there? Of course we would. We have in the past and we will in the future. We're not hoping to do that. That's sort of a death penalty.
We prefer to get there other ways. But that's something we're going to leave open. Ultimately we'll prevail, as we have through the years. There's always cycles where for one reason or another penalties seem to be up. Now we have a brand-new car. In fairness to the teams, there always is some ambiguity, for one reason or another, somebody didn't get clear. We have to take some of that into consideration.
But we will prevail down the road because it's the integrity of our product. The first thing you have to do if you're us is make sure that there's a high degree of confidence with the other race teams, fans and others that whoever won the race last weekend did it fair and square. That's our first important point we have to make. And we think we're there. There's not a lot of debating that.
Now you can debate we're not getting there fast enough, penalties aren't high enough. We've had more penalties than normal. That's all fine to discuss. But the premise of keeping a fair playing field, the confidence of garage area is intact and will remain intact.

Q. In regard to the Busch Series, what do you see happening to that series in regards to the change of title sponsor, the launch of the COT car making guys less likely to double dip?
BRIAN FRANCE: Well, we'd like to see a couple things, and we think we will naturally. One is, we're always trying to distinguish that series. It is the No. 2 motorsport in the country by any metrics. We're proud of that. We're always trying to find ways to exhibit its proper position. Not everybody does that all the time.
A new series sponsor will give it its own -- will distinguish it in a different way. That will be a good thing. Car of Tomorrow that looks different, let's call it the new car of today, that NEXTEL Cup runs, that gives us an opportunity to look different Saturday to Sunday. That's a good thing.
We're going to be looking at all the ways we can to give the Busch Series its proper place in how it stacks up to all other motorsports in the country. That's our challenge and we'll keep working on it.

Q. You mentioned earlier you listen to the fans. With the later start to some of these races, do you hear many complaints from fans who are at the races, saying they're annoyed they're starting later?
BRIAN FRANCE: Well, there are certainly some people that would prefer it be earlier. There are other people, you can imagine -- more people watching television later on in the day, into the 6:00 hour, those people who have done what they're going to do on a Sunday, prefer it. It's a mixed bag.
More people would like to see a later start time, but there's certainly a sizable amount of people that their preference might be earlier.

Q. The first race at Daytona since you lost your dad. Is it going to be strange not having him there? Any particular 400 memories with him?
BRIAN FRANCE: Well, I would tell you that, you know, it's strange, period, especially on race day or something. Things that would happen during the event, I was out at Sears Point. I know I'd have called him two or three times on that particular race just going over various things. That's very strange not being able to pick up the phone and talk to him. Or Sunday night, recapping a weekend or something.
I'm sure Daytona will be very much along those lines, knowing where he'd be sitting during the event, go check in with him. Yeah, it's going to be - for all of us - strange.

Q. Everyone talks about the family, then you're talking about Asia, a bit of vision. Do you think you'd be as much of a dreamer if it wasn't for your dad?
BRIAN FRANCE: Well, I don't know. I certainly wouldn't have the wisdom. Whatever wisdom I have, I would have a lot less of it if it weren't for him. I think that's a fair point. I'm sure he had a huge impact. Nobody had a bigger impact on my life and career than he did. He was what you'd want him to be, this terrific guy, and I'll miss him.

Q. Is there anything NASCAR can do about cost to fans? Ticket prices are up. To stay at a hotel on a race weekend is practically off the map. What can NASCAR do to work with people like that to bring costs down?
BRIAN FRANCE: Well, the tracks have the biggest concern of them all. They want to give value to their customers. They don't want to see hotels price gouge multiple days more than anybody else does. They don't want to see fuel prices high. That's a big concern.
Our fans travel obviously a lot by car and RV. They're very, very mindful of trying to do everything they can, whether it's free parking, a better price on a Friday or qualifying day, so that they're sold out, they can get somebody in that wants to experience a little bit of NASCAR firsthand. They're running lots of different promotions.
They have the biggest concern of anyone that we don't price the fan out of being able to attend the events. They're building more seats in some cases. They are seats that they can sell in a less expensive capacity. They're all over it.
But, look, a lot of things are even out of their control. I know in the communities, they work more closely than ever with the hotels, restaurants, to try to look at the NASCAR events and not take total advantage of it.
Ultimately, the marketplace works its way around these issues. I can tell you the tracks and us are looking at it always.

Q. The first steps towards alt fuels being pushed by the manufacturers because the marketplace is going that way or is this about reclaiming some of the image benefit the IRL sports cars have had from ethanol and other green-type fuels?
BRIAN FRANCE: Well, the manufacturers definitely have weighed in, and they have their own strategies going on. They're changing around as well. It's an evolving strategy.
I think it's just becoming clear to us that fuel prices, a barrel of oil, unfortunately they don't seem to be coming down to levels they were three or four years ago. Then you have a compounded issue with more data than ever that's coming in on global warming, some of the effects that carbon -- carbon being one, all kinds of things swirling around now that we need to have a handle or.
We are. That's where we have a research and development center. We're now well-equipped to manage these issues differently than we could have managed them in a review capacity four or five years ago. It's important for us to be in step and lead when we can. That's what we're going to do.

Q. Any realistic timetable when you can get something like that implemented?
BRIAN FRANCE: No, because we don't know which direction we'll ultimately land. There's eight or nine different versions of what alternative fuels mean to people. The marketplace hasn't determined just which one they're going to support most, and maybe several.
But it's going to be different than it is today. Whatever we'll do will be done with Sonoco, in step with them. They're our fuel partner. They have every incentive from us. Maybe adjustments to what we do now, maybe something more than that. We just don't know.
What I'm telling you today is we're going to be in a pretty high gear at looking down the road at making sure we're in step with the rest of the country and other industries from little things to big things, even though whatever we might to, frankly, we can't move a needle or we would have done something yesterday. We can only do things that would symbolically demonstrate we're in step, and those are the things we'll be looking at.
HERB BRANHAM: Thanks so much to our chairman and CEO, Brian France. We appreciate you taking the time out to join us today. As you could tell, there was a big audience today, a lot of interest in your participation, so thank you.
BRIAN FRANCE: Thank you.
HERB BRANHAM: Thank you so much to all the media in attendance. I believe this is our largest audience of the year for a teleconference. As always, we greatly appreciate the coverage. For those of you coming to the Pepsi 400, look forward to seeing you this weekend. Thank you.

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