INDY CAR RACING MEDIA CONFERENCE

April 4, 1995

Andrew Craig

Carl Hogan

ANDREW CRAIG: Hello. Good afternoon everybody.

ANDREW CRAIG: Good afternoon and good morning everyone.

ANDREW CRAIG: Well, I think it's good news and there's maybe bad news as well. On the success side I certainly don't want to make this into the Andrew Craig life story but nonetheless on the success side I think we've achieved a number of things. First of all, I think we've very successfully organized the business, we're more businesslike, we're more structured, we're more disciplined than perhaps we've been in the past. Secondly, I think we've created a very strong partnership relationship with our race promoters which certainly wasn't there are a year ago. The relationship was somewhat fractured and now we're very in touch with our promoters indeed. Thirdly, we've developed a whole business side of the company in terms of sponsorship, our market research program and our service program as well. And finally, I think what we have created, and this has been very much a team effort within the company, it's a very good and very open and constructive relationship with our board of directors. On the failure side, it's a regret to me that certainly 12 months into the job we've not yet reached a resolution with the Speedway, but that is the case today. Obviously we'll continue to look for a resolution, but that's the situation. On the whole, I think it's been a year of pretty solid progress and obviously we've won big issues; the Speedway issue is still to be resolved.

ADAM SAAL: Thank you, Andrew. We're going to move on to callers in a second, but if the people who are taking transcriptions down directly, if you could make sure -- if you have a mute button, if you could it we'd appreciate it, if not you can just muffle the voice on the telephone it would help the radio guys who are trying to get a -- direct soundbites from our guests. Thanks a lot. Carl, you were chairman of the Search Committee which ultimately found Andrew, and I think it would be very appropriate for you to speak from the owner's perspective of what progress we've seen in the last 12 months with IndyCar.

CARL HOGAN: Well, I think you have to go even before the 12 months to sort of look at where the sport was and I think at that point a lot of the press and a lot of the people were giving a lot of criticism to CART because of -- as they said, a small board of five members, and they claim there was a lot of conflict of interest and, I guess, there was division among some of the owners which certainly didn't help the sport and didn't help our relationship with promoters et cetera. I think in search for a new CEO, one of the things we were trying to do was to take care of some of these situations and make we sure we had someone that had the experience to handle all this and had management experience and management. I think it was a stroke of luck not brilliance that we were able to find Andrew and the fact that he was available and willing to take on the job at hand, and I think since then by having a large board I don't think you ever hear any more about the conflict of interest. I think you also find that the owners themselves are quite cohesive. I think we've made an effort through Andrew to reach out to the promoters and the sponsors in a much more businesslike and friendly fashion. So I think we've made a lot of strides. I think it a shame a very limited amount of people are still criticizing IndyCar and CART for some of the things that happened before Andrew got here, and I think if they would continue to give Andrew a chance and support I think they'll find that we're certainly going in the right direction.

ANDREW CRAIG: Yes, that's correct. On the 17th of October I wrote to Buddy Jobe stating at that time we felt the relationship perhaps had gone too far to be retrieved and that perhaps it was the right time for both parties to go their own way. I never got a reply to that letter, but in fact Buddy and I have spoken earlier by phone on the same issue. And that's what we're doing. We've enjoyed going PIR for a number of years, we've all been very impressed by the improvements that are being made there over the years and of course our teams have been testing there very, very regularly throughout the winter for a number of years. But nonetheless, the time has come to move on. There are many attractive alternatives open to us and we're vigorously pursuing those right now.

ANDREW CRAIG: I wouldn't be prepared to say under no scenario, but certainly it's not in our current plans.

ANDREW CRAIG: Well, it's hardiest (ph) to try. To be very clear to us and I think to our board of directors for some while that Buddy Jobe has felt that the IRL might be more appropriate series for him to be involved in. Of course the key issue that still remains, will there actually be an IRL? As you know, to have a good race series you need cars, you need drivers, you need tracks, you need sponsors, you need all of those things -- you need teams, you need all of those things. We have them all and we're going to take them racing next year.

ANDREW CRAIG: Well, I think we've made our position with regards to the race very clear. We don't think that January is a suitable race date; it severely impacts upon an excellent and loyal promoter in Miami and we're not going to do anything that disrupts our schedule in Miami. With regards to Phoenix, and that's no huge surprise to us at all. And with regards to Las Vegas, I have to tell you, we've been in discussion with Las Vegas for some months now. It's a very attractive project and certainly I hope you'll be seeing the real IndyCar racing there in the near future.

ANDREW CRAIG: That's certainly a possibility that that's one of the things we're looking at.

ANDREW CRAIG: Well, first of all, yes, it's very frustrating because it's diverging my time and the time of my staff and the time of our directors away from our central task. And our central task is to provide our race fans and our TV viewers with the best possible IndyCar series we can provide. So in some ways it's actually damaging the sport because it's not letting us get on with the task that's important to us. So it's certainly very frustrating. On the other hand, we don't lie awake at night because we're very confident that what we've got is first class series and it's going to stay that way.

CARL HOGAN: No, I think that the directors have all had numerous conversations about this. This is not -- has not been treated lightly. We've gone step by step through the process. I think we've made some very strong efforts to get together with the IRL. There's been, I think, a lack of confidence maybe on my part because in some cases we've had meetings one week and the next Monday or Tuesday announcements have been made that were completely adverse to what we were talking about. So it gives you a level of frustration as to who you're dealing with. And as far as we're concerned, I think the time has come for us to get back at the task at hand and to do a good job. I think that the series is very good right now. I think it will get better. And I think that some of us maybe spending our time worrying about that for now and we ought to get on with life and I think that's really where we are at this time.

ANDREW CRAIG: Let me be clear that if we can find a resolution that works with the Speedway and works for us, then obviously that would remain our preferred option. But as Carl has just very rightly said, life moves on. And we've got too much to do and too many exciting opportunities that, you know, we really can't sit around waiting forever. But for sure, if the opportunity was there for a resolution, we would seek a resolution, but if the opportunity is not there for a resolution, we're going to get on and develop our series.

CARL HOGAN: I'd like to add something to that. I think that as has been made very clear to the press, the media and to the IRL, that our board really feels that we're pretty well maxed out as far as races are concerned, and there's a logistics problem when you're racing as many races as we are in such a short period of time as to really doing a good job. I think the fact that the IRL is now announcing three races in addition to the Indy race plus two more possibly to be announced later does not seem to me that they're taking serious the fact that we feel that we can't handle too many races. I think, you know, when you see that happening I think you have to see the handwriting on the wall and that's why I say I think we have to move on because there are things that are happening that are making it more difficult each day to come to some kind of an accommodation.

ANDREW CRAIG: We've not yet determined the date. And in fact, there's a long way to go.

ANDREW CRAIG: Which year? It depends very much on when the track is completed. I think it's going to be very tight for 1996. That would obviously be our preferred option, but I think it's more likely going to be '97.

ANDREW CRAIG: No. The situation is as Carl Hogan was just saying is that running these cars is very expensive and also they're extremely time consuming in terms of preparation. There really is a number -- a maximum number beyond which we cannot go, and we're probably about that right now, 16, 17 races. The addition of more races is very unlikely, at least in the medium term, to yield sufficient additional revenues to sustain the team because of the addition of those races. And I must say that, you know, cost is a very important issue in this series, and keeping costs under control is very important. Adding more races is going to contribute nothing to keeping costs under control.

ANDREW CRAIG: They do indeed but the cars are a very different type of car with far lower costs and a far quicker turn around. Really it's a different thing and it's not really a proper comparison.

ANDREW CRAIG: I wouldn't describe it so much as with IndyCar but being a part of IndyCar Racing again. There is a considerable interest in the U.S. In the idea of a touring car series along the lines of what you currently see in many parts of the world which has been highly successful in Germany in U.K. and Australia and other markets. I think with or without IndyCar you're going to see a touring car type series in the U.S.A in the near future IndyCar. There seems to be a very high degree of manufacturer support. I think it's very probable that that could well become an important part of the Saturday show at an IndyCar weekend, but obviously in no way is that intended to undermine our principal prophecy which is, of course, IndyCar World Series.

ANDREW CRAIG: Well, my anticipation is that if it is like it works here, for all types of cars. If you look at the regulations that they you're using in Europe, it's open to American cars, Japanese cars, European cars. It's a true worldwide product.

ANDREW CRAIG: They're based on production cars. And they wouldn't race on ovals.

ANDREW CRAIG: Yeah, I guess that's right, yeah.

CARL HOGAN: I don't know if it's the new and the old, I think it goes a little bit beyond that. I think a lot of it has to do with control of the sport and, I guess, as a sport grows larger it becomes more enticing to certain people. I think you have to look at NASCAR as a situation that Bill France has built over the past 40 years or so and has come up with a successful series in their own right, which is very different than ours. And I think it takes a long time to build that. I think that the history of IndyCar is such that we're just getting into our own so to speak and it's not seeing something that's easy to do. It's a very difficult thing to put everything together and start a new series. And pop out a box and say we're going to be successful is quite a statement as far as I'm concerned.

CARL HOGAN: I think a few years ago he definitely had the trump card. I don't think there's any doubt about that. I think life has changed. At one point I think sponsors said hey, you've got to go to Indy to have any interest in the series. I think what's happened is there's not been any diminishment in the interest in Indy, but all of our other races have become so much better that we have a better product to offer to people. And I think sponsors no longer are going to come to you and say you've got to do this or you've got to do that, they're going to come to us and say are you producing an overall situation? As an owner, I can tell you that's true. I don't care who the sponsor is, it's all different together different today. It's not exactly if your car is seen on TV or exactly how much print you get, it's also are you producing something for that company that's necessary; and that's whether it's in brand awareness or sales or what, and there's a whole different thing. The concept of the sport has become so businesslike that any one race today I don't think has quite the impact that it had years ago.

CARL HOGAN: Well, I think you have to first realize that for us to go to Indy is very, very expensive. You know, I think our room bills last year for two cars was something like $90,000. So, you know, to me, I've always said that the only person that wins at Indy is the one that comes in first, the one that comes in second maybe breaks even and the rest it costs money. Could it hurt us as far as sponsorship dollars? I think it probably could but also it would certainly lower our costs. So it's something that we're not looking forward to that happening, and I don't think it will happen because I think some time someone is going to realize that it's good for all parties to continue to what we've been doing. But if the break is made I will have to say it will not made by IndyCar owners, it will be coming from the Speedway.

CARL HOGAN: Yeah, I think it really has to do with us reevaluating everything that we've been doing and what we've tried to do the last two years. I think in some cases we were successful in 1992 and then we looked at things and said how can we be more successful? And you look at people like Penske and Newman/Haas and certain connections with either manufacturers that we don't have and you think well, let's try that. Well, we tried it and it didn't work and now I think what's happened is after Indy last year we sat down and reappraised the situation and came up with a real good business plan. And what that was is to, more or less, quit worrying about the competition and say what can we do to produce the best race team that we know how to do. And what we did is try to develop a very special relationship with Lola, we tried to develop a special relationship with Mercedes/Ilmor and the same with Goodyear and with that we then decided that we could have a good test program. The two drivers we have, I wouldn't say there's any better combination out there. That's personal of course. So what we did then is try to put the whole package together and say, you know, this is the best that we can do. And I'm very happy with that product. I think Phoenix was just a situation where we had very good race cars on Friday, we were first and third. When Sunday came we tried to set up the cars for a race with past experience of a very slippery track thinking we need a lot of push in the car and it was a bad decision. It's one I hope we learned from and go from there. These cars are a little bit better than the cars that we've had in the past and we compensated too much for the track. So Phoenix, were we disappointed? Yes, desperately disappointed, but I think that you'll see at us at Long Beach back where we belong.

CARL HOGAN: Well, let me say this to you, I think you have to understand that we as car owners, as far as the track and the fans, are very disappointed that it's come to this. I think you have to understand that's a true statement. But you also have to understand that Buddy Jobe for years has been very making it very difficult for us to be comfortable out there. He's criticized CART, he's criticized drivers, he's said we've got too many foreign drivers, too many drivers to pay, et cetera. I think maybe he should pay more attention to the show that's being put on rather than criticizing the people that are providing it for him. I don't know if you know that a couple of years ago that if we wanted to have a certain paved area, he requested certain teams to pay for that. And our team, Rahal/Hogan, I knew know Newman/Haas, I know Penske, I know Chip Ganassi, we all paid to have certain areas out there paved for our transporter to sit on. Now, you know, I think we've gone out of the way. I think it's time people know some of the facts. We stayed out there a day afterwards to work on the cars and they charged us $250 a day. You know, I think that, you know, maybe he should pay more attention to the fans and everything and quit criticizing us. Now if some of this were to happen, you know, they all say never say never, as far as a track, as far as the fans, as far as where it's come from, yeah, it's really great, we hate to see this happen. But I think there comes a time in your life where you say hey, we've had enough of this. And I think that's where we are right now and I'm trying to give you a very honest appraisal that I think would come from most owners.

ANDREW CRAIG: Well, to be clear, certainly we do believe there is a need to slow the cars down. We'd like that to be achieved by proper consultation with all parties, with tracks, with the manufacturers, with the engineers to achieve the best means of bringing the cars -- bringing the speed down. Our rules of technical committee have this issue under constant review. It's a balancing act because on the one hand we have a very, very clear obligation to the teams to try to keep our costs under control, and as you know probably better than I, any change in motor racing is expensive. So we need to make sure that when we make the change to slow the cars down, which I'm sure will happen at some point in the not too distant future that we do so in a matter that's cost effective and has a reasonable life to it and also the results in safe cars. So yes, we recognize the need to keep speeds under control and we continue to work with that in mind.

ANDREW CRAIG: I think in truth the issue is to separate IndyCar from the Speedway. I see very, very few. One year ago -- actually, just next week one year ago in Tony said okay, tell me where you think the problems lie. It's very good and very constructive meeting and it lasted for a very considerable period of time because it was a very long list of issues that Tony had. I think in truth today we've come down to one issue and that's that the Speedway want to either have the power to run the series or at least to have most of the power in running the series. The only other issue which is still on the table where I see there is common ground between us anyway is the issue of the number of oval tracks in the series. And we welcome more oval tracks. But in truth, this whole issue comes down to one thing and one thing alone and that's power. Who's going to run the sport? We are perfectly prepared to run the sport in a matter that takes account of the needs of all the parties, promoters, sponsors, teams, drivers and race fans. But it would seem that the winning that's on the Speedway's power to share power, to take account of all of the views is quite limited.

ANDREW CRAIG: I think that looking to the future what you're going to see is a series which will remain essentially a North American race series; that's our heart and our sole. My vision is that what we want to have here is a significant number of teams that are very well financed. So they're going to be well financed so we can bring them back nearer to the front rather than the other way around. I think there's a tendency to believe that one somehow should bring the top end of the field nearer to the back and that's completely wrong. What we need to do is make sure the sport is properly financed so that most of the teams can be highly competitive. I guess the thing we seek most of all is have a series that's based on a very solid consistent base where we know where we're going, where race fans know what they're going to get and we produce extremely good racing.

ANDREW CRAIG: Well, I think there are some first signs of that but it's a long road quite frankly and it will take some time. And I think what I have to provide is consistent rules, a cost effective organization to develop and to promote the sport and then also to help our teams to get more finance into the sport.

ANDREW CRAIG: We've had -- actually, as recently as last -- last Thursday discussions with New Hampshire. We'd very much like them to remain part of our series and I believe they also would like to remain as part of the series. You will note that despite the fact that in the past I believe some people have been lead to believe that New Hampshire was in "an IRL track" obviously, was not the case in the announcement that came out. I hope you'll see also I've concluded an agreement with New Hampshire in the near future.

ANDREW CRAIG: Sure. I think we were extremely pleased with the race. Obviously, it was great to see Robby Gordon and his team owner Derrick Walker come through and at last score the elusive win. Speaking to both men afterwards, I know it was a moment of great emotion for them both. But it was more than that. As well as being a great race for Robby and Derrick, I think there are a number of things here which perhaps are worth just commenting on. First of all, the average age of our 1995 race winners is actually very young indeed. What you're seeing here is the new emerging category of young successful IndyCar drivers. The age of our three winners so far this year has been just over the age of 25. Second point I should make is that all of our 1995 race winners are drivers who get paid to be sitting in the car, as indeed are the vast majority of our IndyCar drivers. But if you want to win an IndyCar race you've got to be really good, you've got to be the best in the world. All the drivers you're seeing winning our races right now, they didn't pay to get there, they are being paid to drive. All three of those drivers are from North America. And interestingly enough, and this is underscored to show how competitive the series is right now, none of our race winners started higher than eight on the grid. So the gives the feeling of the amount of competition that's out there in the field. And interesting also si that you could see for the health of the sport, we have 27 cars start at Phoenix and only four of those were not 1995 models. In other words, the series is filled with up-to-date racing equipment. It's also interesting perhaps just to comment on -- to come back to Robby Gordon on how did he get to IndyCar. Well, Robby in his career to date had wins at IMSA and FCCA and Trans Am, in SCORE offroad and also some stadium racing as well. He's won championships in offroad and also stadium racing. In other words, it's clear that you can get to IndyCar via many diverse routes. I mean, take Paul Tracy, for instance, he came to us from Indy Lights, from Canadian Formula IV, Jacques Villeneuve came through Atlantic and also through Japanese Formula III. All of these series are providing the training grounds for IndyCar drivers. And while we are very anxious to try and develop some clear stepping stones to IndyCar, I think sometimes the accusation that somehow we as an industry or the sport in America is not providing the opportunity for American drivers is really is ill-founded.

ANDREW CRAIG: I think there's a pretty good chance of that Carl.

CARL HOGAN: Well, I think I'd like to see them all move up truly. I think it's fun this year to have at every race the first ten cars, you know, like at Australia, all within one second on a 2.8 mile course. I think it's great. Two years ago you also looked for attrition to win races and I think that's gone away a little bit. I think what you have to realize is that what we're getting into now with our sponsors is not only do the sponsors have to be happy with Rahal/Hogan, they have to be happy with the whole sport, and I think that's happening more today than ever. So as far as the back getting up to the front, if you're up front anyway it doesn't make any difference, does it? So we just as soon have a better show. And I think Roger feels that way or Carl feels that way Chip or anybody. If it's going to improve the show it has to be helpful to us. So, sure is the competition going to be tougher? Sure it is, but after all, most of us are in this sport because we are competitors.

CARL HOGAN: Sure.

CARL HOGAN: Thank you.

ANDREW CRAIG: Thank you.