Uncensored CΛRT Commentary|
by Ed Donath
Money to Burn
ATHENS, NY—While Champ Cars are poised to make a first-ever appearance under the brand new high-powered
Saturday Night lights at the venerable Milwaukee Mile, the Champ Car Company is about to find itself under
the illuminated lens of a high-powered microscope.
With spending far outpacing revenues, the financial community and CΛRT’s own stockholders will be seeking
information and justification for and about the quickening pace at which once-fat corporate savings accounts
are being depleted in the name of rescuing the series. “Burning Money” is the quasi-stock market term that
we’ve been hearing more and more lately.
It is a term that refers to the practice of using cash reserves to finance hoped-for corporate growth
and/or the mere day-to-day operation of a company. Of course, it describes perfectly what Chris Pook has
been doing since the 2002 racing season ended—when CΛRT began subsidizing its teams to insure their ongoing
participation and to secure an 18-car minimum field for every event on the 2003 schedule.
While some say that such self-funding is less smart than playing with other people’s money, Grandpa Chris,
Tommy the Pencil, and the rest of the financial brain trust have, thus far, defended the non-incurrence of
indebtedness as a more sensible plan.
In either case, the raw truth is that a whole lot of dead President’s pictures will have been set ablaze
before this current chapter of Forsythe Saga is completed.
Pook says things like: “We continue to face challenges on many fronts especially in the face of a weak
economy and global events. However, we have strengthened our sales efforts and continue to make strides
in promoting CΛRT’s advantages as a powerful marketing tool for multi-national companies interested in
exploiting the global market place.”
Nonetheless, the latest (MPH/NYSE) corporate financial report reminds us that “Net loss for the 2003
first quarter was $9.0 million…compared to a net loss of $1.6 million…in the comparable period a year ago.”
The $64 Question: How many quarters can the company’s claimed working capital of approximately $75 million
carry CΛRT at the current burn rate? Some have predicted that reserves could shrink by perhaps $50 million
before you can say: “Bridgestone Presents the Champ Car World Series Powered by Ford.”
In order that our beloved speed sport might ever actually be perceived as the “powerful marketing tool
for multi-national companies interested in exploiting the global market place” that Grandpa Chris makes it
out to be, a much more far-reaching plan than one which merely acquires a string of near-downtown venues
on four or five continents wherein subsidized low bucks-yet-exotic spec engine formula cars become once-a-year
Sunday afternoon entertainment fodder for the international cosmopolitan party animal cannon will certainly
While the Mayor of Long Beach is more than capable of marketing CΛRT’s existing venues and while NewCOO
David Clare will, no doubt, utilize his F1-acquired skills and contacts to help develop new racing
markets—particularly in Pacific Rim and European countries—fact is that selling itself has always been the
Champ Car Company’s weakest suit.
Short of a cash infusion miracle such as the buy-in/buy-out by the Boss of ForMoola One, the immediate
influx of European/Asian auto manufacturer(s) who would market the series as their own, or some creative
Gerald Forsythe-brokered privatization of Championship Auto Racing Teams, growth prospects look about as
dim as a pre-lights Saturday evening at the fairgrounds speedway in West Allis, Wisconsin.
While there is still some money left in the CΛRT coffers, someone needs to realize that the time is
imperatively overdue to begin burning it in hither-to-fore unexplored areas—strong global TV partnerships,
international TV/print advertising, and tourism tie-ins, to name a few.
Copyright © 2003 by Ed Donath and Deep Throttle. All Rights Reserved.
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