CART MEDIA CONFERENCE

MIKE ZIZZO: I'd like to welcome everybody to today's CART teleconference presented by MCI. Our special guests today are CART President and CEO, Andrew Greg, and Federal Express vice-president marketing David Shoenfeld. Earlier this afternoon, Andrew and David announced that Federal Express has signed on as the title sponsor for the series. The series will be known as the FedEx Championship Series. Many of you already have received a release detailing the announcement. However, should anyone else need this release please contact T.E. McHale at the CART office at 248-362-8800. It is a great day for CART and I am going to hand it over to Andrew Craig with some opening comments. Andrew.

DAVID SHOENFELD: Thank you, Andrew. As Andrew mentioned, this strategic sponsorship agreement is based on the many synergies between FedEx and CART: Technology, teamwork, international visibility, speed and reliability. These are the qualities that differentiate both our organizations from the competition. Just as a CART team requires a combination of a hard working crew, and a technologically advance car across the finish line first, FedEx relies on the teamwork of its outstanding people and leading edge technology to deliver the world on time. CART is known as the most technologically advanced sport while FedEx is renowned for its industry leading customer technology. Similarly, while CART drivers compete around the world in front of millions of fans, FedEx operates an unparalleled global network serving millions of customers in 212 countries. Any CART driver will tell you that the two most important features of his car are speed and reliability. Just as the customers -- our customers rely on the speed and reliability of FedEx's time-definite delivery. Finally, both FedEx and CART are renowned for their precision, attention to detail, and ability to overcome obstacles through advanced planning. Let me conclude by saying in addition to the natural fit between FedEx and CART, this sponsorship makes smart business sense for both organizations.

ANDREW CRAIG: Yeah, let me touch on that a little. Obviously, we are here to announce FedEx today. But, this is where we stand. I have got a board meeting coming up this Wednesday -- I am sorry, this Thursday, and certainly we will be receiving a report from our rules and technical committee. As most of you probably know, we took the decision about three, four months back to defer making a decision as to whether or not we would reduce the engines to 1.8 liters in the year 2000. That means that that decision would not occur until -- that that change could not occur until 2001. We need to make a final determination on the engine size by April of next year so we stay in line with our stability agreements. But, we are also going to be looking at some short-term measures. One thing we will be looking at is wing sizes to see what we can do to slow down the cars on an interim basis.

ANDREW CRAIG: I think that in the past what you had with us our series, or our Championship as it now is, is say a collection of very important races; all of them, in their own right, major occasions and major events in their individual marketplaces. But, there has been a lack of, if you like, a cohesive link that brings all these things together into a clear national championship. And, we think that that is a problem, quite frankly. It is a problem which we intend to address as part and parcel of the change we are making here with FedEx. We are the National Championship and the man who wins our series is the National Champion. And, we need to put far more focus and attention on that as we go forward. And, we think the opportunity is here with FedEx to reposition the series. We also felt the opportunity was there to pick up on a very, very well established and traditional name of our sport; a sport which we think is -- we are the national -- I am sorry -- a name which we believe we are the natural heirs to. And, that, of course, is the name Championship Cars or Champ Cars. We have researched this with the fans. The fans love the idea these being Champ Cars. I think it will be a very successful change for us. But again, will help to give a clearer identity as we move forward. Of course, having FedEx on board, as our title sponsor, as David touched on it, there are just so many parallels and similarities between our organizations to what we do and how we go bit. In all modesty, we are a little smaller than they are. But, we are really similar in many ways, commitment to quality, commitment to using technology to find solutions, a commitment to delivering things on time and of course a commitment to doing things fast. So there is lots of nice links that we can use with the consumer as we move forward to help position ourselves.

DAVID SHOENFELD: Certainly. FedEx's objectives here are still very much business-to-business, but to a much, much larger audience: Small business -- small business emerging technologies, a much broader and more diverse group of companies; literally millions of customers here in the U.S. and a large number around the world. From our standpoint we plan to leverage our CART sponsorship through promotions, advertising and extensive customer hospitality events at each of the currently 19 venues. We see that as a marvelous opportunity to continue to get closer to our customers; provide them with both a terribly exciting event as well as a very enlightening experience both taking them behind the scenes of Championship Auto Racing Teams and the race itself. And, also bring them behind the scenes, or let them see into the FedEx system and how our capabilities can help them do more business on a global standpoint. Since the FedEx Championship Series is an international circuit, each race gives us a worldwide opportunity to conduct local market tie-ins. And, finally the FedEx Championship Series expands our sports marketing portfolio here in North America and compliments our existing sponsorships such as the FedEx Orange Bowl, FedEx St. Jude Golf Classic. We are very excited through auto racing, college football and golf, we are able to generate year-round brand awareness among the most loyal fans in sport and I have got to tell you that when you go to a race, when you get to experience the energy and excitement and feel the speed, you become a much more interested and motivated and dynamic fan of an already exciting racing experience.

DAVID SHOENFELD: We are still looking at a lot of things. I think what we will be doing is focusing our marketing resources on developing a program that helps generate increased brand awareness for both FedEx and CART. I think the focus will be predominantly in the motor sports context and it will continue to strengthen the FedEx brand and the ways we have already done so. We have not produced any advertising so far. The only deliverable that we produced today was a new and very visually interesting series logo that really captures many of the essential components of this sport.

ANDREW CRAIG: Well, as far as driver recognition is concerned, that is always a challenge. And, it is something which with the new resources that come as part of an agreement such as this, CART will be able to devote more energy and more time to building a fan base and recognition for the drivers. So, I can certainly commit to you today that you will see, actually in all of our own advertising activities, as you move forward to the next season, spending more time and more energy promoting our drivers. Just today, at our press conference, we had drivers -- two drivers actually represent the spectrum of talents. On the one hand, we had Michael Andretti our most-winning race car driver of all times -- at least he is racing currently. And at the other extreme, we had Richie Hearn, of course, you all know, is brand new to our sport. We are going to look for every opportunity we can to always showcase the up-and-coming talent alongside the established stars.

DAVID SHOENFELD: That is an excellent question. We spend a lot of time examining the available sponsorships in a whole host of sports in general. What most attracted us to it was clearly the synergies that I mentioned earlier, the qualities that distinguished CART from its competitors are the very same qualities that distinguish FedEx from its competitors. We saw a natural fit, a very strong and easy way for us to make the case both in favor of the FedEx brand as well as in support of a CART brand. We took a look at a lot of other sponsorship areas and none of them offered us the power and the potential that we got by becoming both the title sponsor to the series as well as the official transportation company of the FedEx Championship Series. And, that really helps us demonstrate and pay off immediately why we are there; why we are involved and will give us a time to really help to tell a very complex and comprehensive logistic story. The kinds of things we will be doing in support of CART are fabulous examples of what we do for our customers everyday around the world.

DAVID SHOENFELD: David Shoenfeld and my title is vice-president of marketing.

DAVID SHOENFELD: We have been -- FedEx and CART have been in discussions for over 18 months talking about a variety of ways we could approach a sponsorship arrangement. It's really quite a long time. But, it really took us that time for us to truly understand both the nature of the fit and to examine all the alternatives and decide that this was the best possible fit and that it made smart business sense for FedEx and CART to work together to help advance the sport and advance our respective brands. I am not sure who -- I believe CART approached FedEx first, and we certainly talked to both the -- in addition to discussions with CART -- to many of the teams, to better understand the kind of -- the wonderful team ownership group that is CART, that CART represents. When we really understood the other teams and their ownership and their objectives, we felt very confident that we -- that it was the right group and the right way for us to come in and for us to come in as we did as the title sponsor for the series.

ANDREW CRAIG: When we first started addressing the issue of a new title sponsor there were a couple of things that were paramount in our minds. One was obviously we needed a company that would fit well with us. I mean, sponsorship works best when the public say, oh, I see, I get - where it is kind of a natural fit. I think David and I have said over the last few minutes, there are so many parallels, this really was a natural fit. But then we were actually -- we at CART were confronted with an interesting challenge. I wanted to find a company with whom it was a natural fit, but there was no conflict elsewhere in the series. And with over 400 corporate sponsors, obviously certain categories just weren't going to be available to me because what I wasn't going to do was disrupt any traditional long standing arrangements with other companies. So, we had that limiting factor when we went out. But the end result has been highly successful. That certainly made the process a little harder because we really wanted somebody who was new to the sport, in a brand new product category. And, that, of course, is exactly what we have at FedEx.

ANDREW CRAIG: PPG has been a wonderful title sponsor for the last 18 years, a great supporter, a loyal supporter of our race series. And have done a terrific job within their industry of getting value out of the sponsorship. But, really the view of both ourselves and PPG was there was an opportunity that is being missed; that if we could restructure this package rights in a manner that gave PPG everything they needed to continue with their very successful program with their industrial customers in the automotive paint business, if we could do that and at the same time provide something of value that could be allocated to another company - turned out to be FedEx - then this would be in everybody's best interest. So, this is done very much in a very competitive -- very cooperative spirit between ourselves and PPG and indeed right now, very cooperative spirit between FedEx, PPG, and CART.

ANDREW CRAIG: Actually I have been travelling extensively the last two to three days, so while I am aware of that, I have not actually had the opportunity to discuss precisely what that means with anybody at Players. Let me say, my position remains exactly where it has always been. We love racing in Canada. It is a very important market for us. But, unless we get the amendments to the legislation, regarding the tobacco companies from being involved in our series in Canada, then we won't be coming. That is clear. I am not aware of any changes in the government's position which, as you know, has been very good and they recognize the special needs of an international series such as ours. They have agreed to make the necessary carve outs from the legislation. That was confirmed as recently as three to four weeks back by the new health minister. I am very confident all that is going to happen. But whether it all fits together with Players and Canada, at this stage, I don't know.

DAVID SHOENFELD: I think initially our focus is going to be in support -- rather extensive work in support of the series, the entire series. Certainly, my colleagues and associates in Canada, you know, are -- do intend to leverage the FedEx Championship Series races in both Toronto and Vancouver rather extensively with our customers in Canada. And, our Canadian market team joined us when we visited the race in Toronto this year prior to us finalizing the negotiations. And, we are very excited about the property and its value and excitement and energy in Canada.

DAVID SHOENFELD: Not at this time.

DAVID SHOENFELD: Certainly. Each sponsorship is unique in many respects. I think what we are going to find here - this is going to be a series where FedEx is going to be prominent in all the racing venues and with all of the team members. Certainly the FedEx Orange Bowl is a wonderful annual event, but its timeline focuses strictly the New Year's week period. This is going to help us extend our brand on a year-round basis, running from the early, early spring to the very late fall. It works -- all the sponsorships work very well together. The Benetton Formula I sponsorship again is with a single team, is a much more focused event; much more -- much differently defined, customer hospitality and brand objectives, but it helps to strengthen or supplement the FedEx brand activities going on in Europe predominantly. And, I think that the more -- that the more clearly FedEx is seen as a leader in motor sports and its extensive involvement with Championship Auto Racing Teams, I think it will simply add value to the brand and to the sport and increase the levels of fan interest. Clearly, working with CART, we believe they have an outstanding product and we are going to do everything we can do to work together to help each of us benefit.

ANDREW CRAIG: Before I answer that, I guess one of the key elements to the program which FedEx have acquired is that as well as being the title sponsorship of the series, they are also a sponsor of every race that makes up the Championship. So, what we did here is we really developed a process of one-stop-shopping. We went to all our promoters. We corralled all of the marketing rights necessary into one location. We actually sold, at a lower level of the sport, but we sold an integrated program of this type to MCI last year to get this whole concept going. It worked very, very well indeed. So, whereas, traditionally, supposing we done this deal in the traditional way that these things are done say two or, three years back where FedEx would have required rights with us and then, hey, they would have to go out and talk with each track and some would have been available and others maybe wouldn't, so on and so forth. We were able to go in the door of FedEx and say this is what you get: You get the sanctioning body; you get every track, involvement with every team. It is one-stop shopping. We think it represents very good value for money. And, certainly at a time when, I think, all sponsors are looking for a comprehensive involvement with the sports they are involved in, we think we got a product here which is actually up to the minute and it is exactly what a sponsor would want to buy. Now with regard to the future: The PPG Cup still remains the PPG Cup. That is the award that is presented to our champion at the end of the season. And, in addition to that, the end-of-year prize monies, the million dollars pays to the winner, all of that remains exactly as it is right now.

DAVID SHOENFELD: Let me say that in the course of examining the entire range of sponsorship opportunities that we had examined, it was CART's approach, innovation, quality and value that meshed so well with our corporate culture that made us feel very good about this once we truly understood where we could go together.

DAVID SHOENFELD: We will be expanding our sports marketing group slightly to address the unique requirements and somewhat extensive travel schedule through the course of the series. So we will be, you know, adding some resources, but we see again this fits very well with our current approach to sports marketing sponsorships using them to help build the brand, brand visibility, brand recognition and help customers see FedEx in a total and broad context. So, this is just one more way to do it. We will have some unique resources going to that.

DAVID SHOENFELD: Well, certainly PPG has had a great deal of experience in understanding both the fan base, and many of the dynamics. And, we certainly intend to benchmark with their experiences in the past. We intend to work with them as we examine new alternatives. For the future, they will continue to be an important part of the overall CART enterprise. But, the PPG marketing focus and brand focus is really different from what we intend to do. I think we intend -- there are many things about their customer hospitality and dealer programs that we intend to continue to study. We have studied them already and worked with them. We intend to work with them as we -- you know -- and also we will have the opportunity to work with, I guess, over 400 very committed and dedicated companies that bring -- that make this sport possible, sponsors -- the major sponsors of the series, of the league, and sponsors of the individual teams. So, we intend to continue to learn. And, some of this is a new experience for us. Much of it is -- comes from a strength and expertise that we bring to the parties. So, we are very excited to work with CART. We look forward to continuing to work on our relationship with PPG as well.

ANDREW CRAIG: We are committed to having the best of the best take part in our series. We operate this on the basis of talent rising to the top. Obviously, we want to continue to have a very strong core of American drivers in our series. But, I think it is entirely compatible with the American way of doing things. This is open to anybody. It doesn't matter who you are. It doesn't matter where you come from. It doesn't matter what you have been doing. All you have got to do is to be very good and extremely fast. And we think those are important qualities. They are an important part of what we are setting out to do at Championship Auto Racing Teams. Having said that, I think that - and I touched on this earlier on - I think we really haven't over the years spent as much time and energy as we should have done on building in the public's mind a clear understanding that this is a Championship. We have wonderful events. Every one of those events sells out. We have huge crowds at each event. But, each one almost is an individual experience or happening in its own right. And, if you like, the glue was missing that would bring all these things together into something a little bit more understandable so that from the fan's point of view at the end of the year when one man lifts the trophy over his head, you know that that man is the best driver in American Open Wheel Racing. Now, that doesn't mean he has to be an American. Most of the time he will be. In fact, I think if you look back over the last few years, we seem to have gone through having a foreign driver's champion; then an American, foreign driver champion and so forth. And also when I look at our Nation's Cup that has been won by the U.S.A. every year since its inception. So, we are very much an American series. We are always going to be an American series, but what we are is we are an Open Series. We think that is appropriate and we think it reflects everything that America stands for; including myself.

DAVID SHOENFELD: It is designed to try to integrate two very strong brands, CART and FedEx, and do it in a context that clearly has the connotations and underlying messages that are -- the icons of racing, the checkered flag, the instrumentation look. When you consider the challenge of combining those two strong brand identities into a singular series event rather than take the conventional way of tucking a logo on -- a corporate sponsor logo to the left of the series sponsorship and go on with it. We thought that that was -- that really understated the spirit of our sponsorship agreement that we would be working -- that Andrew and I would be working together to -- and our teams would work together, to build upon this relationship and take it forward. So, would this have been a singular identity study, would it have been different? Possibly. But, you know, the real challenge was to fully integrate those two icons of excellence in their respective fields. And, I guess the final comment is wait do you see that thing moving over at 200 miles an hour and I will touch base with you a little later, Jim, we will see if the reaction changes. We fully expect it will.

ANDREW CRAIG: No, we are leaving our point fund right where it is at this stage. In 1997 motor sport is driven by sponsorship. 99 percent of the revenues of our race teams comes from sponsors and it is that that drives the sport forward. And that is where we are going to concentrate our resources.

DAVID SHOENFELD: Certainly motor sports continues to be both a very popular sport and a sport growing in popularity and it's marked by the intense loyalty of its fans. That, too, was another common ground, you know, FedEx prizes, above all else, the loyalty of its customers and works through whatever challenges are faced to continue to deliver the world on time. And, so that fan base, the demographics, certainly the demographics, they tend to, you know, they score very well in terms of education and income, but loyalty above all else is a young up scale group, they have got a track record of spending on products and services that represent good quality and value and that is, quite frankly, where we belong.

DAVID SHOENFELD: We are not at the point where we are ready to discuss some of our strategies. We do intend to use the -- a wide breath of FedEx communication channels to promote the sport, whether it is race schedules on some of -- from race schedules on corporate calendars to invitations and customer events in the markets where the races are being held, we will have the opportunity to strengthen -- together, to strengthen to build awareness, viewer interest, loyalty. And, we are convinced that this is a product that can substantially grow very quickly.

ANDREW CRAIG: The answer is yes. We work with FedEx for the majority of our races over the last few years and we have enjoyed really an excellent relationship; moving race cars and all the equipment that goes with it. It is not an easy task. I think in the last two to three years, with Dennis Swan on board at CART, our VP of logistics, we have really improved our side of it. We are much better organized as an organization and as our race teams. And, we want to work with a partner who can enable to us improve even more. And, we think we have that partner in FedEx. They obviously know what they are doing and they are a terrific partner helping us to maximize and optimize the efficiency of these very important moves that we make throughout the world. As you know, next year we are adding a race in Japan and in fact it was FedEx that transported our cars and equipment out to the tests that we held done four weeks back. It was a flawless experience. We turned it around in record time getting in and out of the marketplace without any significant problems at all on the transportation side. So we think that is an important part of this relationship.

ANDREW CRAIG: He is going to continue as our VP of Logistics. He has done a fabulous job. We need his expertise in that area.

DAVID SHOENFELD: I think as was said at the outset, we are convinced that in addition to being a natural fit to FedEx, between FedEx and CART, that this sponsorship makes smart business sense. To that end we believe that by conducting this series of customer hospitality programs, giving customers the opportunity to go behind the scenes, to go onto the grid, into the pits; see motor racing as an analogue to the supply chain management expertise which is FedEx, that we will be able to help our customers understand the full power that they can achieve by us working together. We have got some very specific objectives. We have a number of companies and customers that we believe will find this a very effective way to see the message, understand the message, see it demonstrated before their eyes, the marriage of technology, information, critical materials, outstanding people, speed and reliability, there are few finer ways other than having your important package be delivered to you flawlessly on time, seeing the FedEx Championship Series Race at speeds well over 220 miles an hour has got to be a memorable experience for our customers.

ANDREW CRAIG: Let me just add to that. At its most basic level, CART will obviously be tracking the awareness levels for FedEx's title sponsorship. Now this is something we do all the time continuously at CART. We have a monthly tracking survey. And, obviously, before the sponsorship can be a success from FedEx's point of view, people have to know about it. So we will be very carefully monitoring the awareness levels as they develop over the next weeks and months. And, quite frankly, I think we are going to get off to a very good start here indeed because the interest from this press conference this morning has been very significant; actually beyond our expectations, so we are obviously delighted by that. So, very basic tracking will be put in place, continue to make sure we are monitoring how we are performing in delivering to FedEx a product that is known about. Then obviously from that, looking on the broader side of this to what is in it for CART, if I can put it that way, obviously we are looking at the long term to see some of the measurements that we take by ourselves. We know that today right now one third of Americans have some level of interest in our sport. We will be looking to see whether those numbers increase over time. Obviously we would hope to see some improvement in our television ratings over time as well. Of course, we are working in a very difficult TV environment, but, nonetheless, we obviously would anticipate the change and the developments of a cohesive championship will help to us do that over time as well. But I would also stress that sponsorship is a medium which works over time. It is not something which happens overnight. You are building an intimate relationship between a brand and a sport and its consumers and hopes its a relationship which lasts for many years. So, while we go into this with very clear high hopes that it is going to help us to move our series forward; by the same time, we are realistic people at CART; we recognize it is all part of a long term process and not something that happens in five minutes or overnight.

ANDREW CRAIG: We are the National Championship of Open Wheel Racing. If I didn't say that, that was a slip on my part. That is what we wish to be. We do believe that right now we have a series which is larger and has higher levels of interest and certainly it is something which we built over the last 20 years. So we think it is a logical and natural progression from where we are today.