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CHAMP CAR MEDIA CONFERENCE


February 25, 2003


Burt Diamond

Kathy Feeney

Chris Pook

Al Speyer


ADAM SAAL: We thought we would get together several people to join Chris today on a discussion of what the business model is and what we are doing in the series all year long to support our marketing platform. We are delighted to have with us today the executive director of marketing for Bridgestone, Mr.テつ Al Speyer. We are also joined by the global marketing manager for Racing Technology, Burt Diamond, as well as the executive vice president from Pacific Care Secure Solutions, Kathy Feeney, and of course CEO of Champ Car, Christopher R. Pook. Normally we would let our sponsors open up a conference call but in this case because the event in St. Petersburg represented very much what we at Champ Car are setting out to do in delivering our series as a marketing delivering mechanism, we would like Chris to make some opening comments and talk about how the race went from his perspective.

CHRIS POOK: Thank you and good afternoon everybody. The Tampa/St. Pete event was a critical event for Champ Car, in as much as it is part of our policy and our strategy to reach majors markets in North America and other parts of the world. When I say major markets, I mean in markets, reaching the masses of the markets and not 40 miles outside of town. If you take the surrounding area of St. Petersburg, Tampa, Sarasota, Clearwater and Orlando, all of those cities within an hour and a half drive of St. Petersburg, you find you reach the fifth largest market in the United States. That is very significant for all of the companies who are involved in our sport. Particularly companies who wish to reach the retail marketplace, such as Pacific Care, such as Bridgestone, such as Ford, who are with us today. Any time that we as a sanctioning body, and I would like to suggest to you that we are not just a sanctioning body any longer. We are marketing facilitators. Any time we can have the ability to take our sponsors into a marketplace of that size, and get that market to pay attention to what we are doing and what all of the companies involved in our series are doing, I believe it's very, very beneficial, and we will continue to do that. Now, the St. Petersburg event is a first-time event and I would say to you is probably one of the better first-time events on a temporary circuit than I have seen in my 28 years in this business. The event was well executed. It was well presented. Obviously, the weather was extremely cooperative. The racing was good. For an inaugural event, as we look forward to the future, it is an extremely good stepping up point for this series to start each year. So the summary from Champ Car's position is very strong marketplace, grand new breakthrough potential and the future is bright at that venue.

ADAM SAAL: Thank you very much. We will now go to Al Speyer, who, of course, will use the Bridgestone brand as the showcase marketing centerpiece for the series all year. In particular through ONE of your dealers, I believe Morgan Tire, you had some success in that market. Tell us about that and the objectives all year long for the Bridgestone brand.

AL SPEYER: Thank you Adam, and thank you, Chris. We had a very, very successful event for this inaugural position as presenting sponsor for Champ Car 2003. We were not only the presenting sponsor for the series, but also in this case the official tire of the St. Petersburg Grand Prix and as a season-long year long effort, our main objective in the presenting sponsor's role is to gain positive brand exposure for our Bridgestone brand, and also, markets down at the local level. Now in the case of St. Petersburg, Morgan Tire is the business name, but our retail stores that go by Tires Plus and Tires Stores ran a local promotion, about a hundred locations in Tampa/St. Pete Clearwater area. We gave away free Friday tickets to see practice and qualifying and in each one of the locations had a drawing for Sunday tickets and we support that had promotion with radio and newspaper advertising and in store POP and banners. We were able to measure, so far, as least an 8 percent increase in store traffic, which is very significant for us, and at the combined locations in that area, for the weekend preceding the race, we had a record in sales. So even before the event started, the entire promotion was very much of a success for us. The winning managers who sold the most Bridgestone product were invited out to the race on Sunday to see hospitality. And we look at on site, we were easily recognizable, visible with our logos on the cars and transporters. Obviously the television broadcast with the graphics added a lot there for us. We were very pleased to see the 19-car field, a lot of new faces and maybe more than anything else, the enthusiasm in the whole St. Pete area from the participants within Champ Car and the fans was actually pretty contagious. There was a very, very strong feeling of everybody working together and looking forward to a very, very good year. So we had perfect weather for the race. The crowd was very much entertained, I think. We had a very eventful race. Things happened that people didn't expect, but we certainly were graduate to partake in the race itself and maybe to add the icing on the cake, the coverage we got in the newspapers Monday following the event was, some of it, beyond our wildest dreams and expectations. We wish they could all be like that. We will certainly do our part to try and copy and kind of take this promotional activity we had in St. Petersburg to a lot of the other events. We will primarily be focusing on the ones within the United States, the ones off-shore and Mexico and Canada are done by separate divisions for us. Again, it was a very, very successful event overall for us and we look forward to going back to St. Petersburg for many years to come.

ADAM SAAL: Thank you very much, Al. We appreciate it was a great weekend for Bridgestone. Ford was very much in full force down there, some fantastic on-track performance was also maintained by some good promotional presence by Ford. Talk about your initial impressions of the Champ Car opener in St. Pete and what opportunities you see for the future to help build the Ford brand?

BURT DIAMOND: I think first of all, there were a few things that were major delights, surprising delights. First of all, it was great racing. We were really pleased with the race venue. I think the race layout and the track was fantastic. It was great to see the really tremendous local media exposure and coverage that the event received, both from the Tampa and St. Pete area. It's an inaugural race, so seeing the grandstands full, certainly on race day, but even being there on Friday, there were a lot of people there. It was really, I could tell, I think Al used the words contagious, and there was a contagious enthusiasm that was generated in the crowd. And obviously we are always pleased with that. I think that Chris's point, it really shows what you can do in an urban environment with a very good product that's executed well. Again, I think St. Pete really proved that. So all in all, for us, it was really good. As a matter of fact, one of my people told me that they heard Robin Miller from ESPN.com, I believe he was talking to the mayor and it was in a conversation with me, so I'm maybe misquoting this or hearing it secondhand, but he was calling it something like potentially Long Beach East. Having been to the Long Beach event a couple of years back, I remember what a fantastic event I thought that was. So I think to be cited in the same comment with Long Beach is a real testament to this first CART event in St. Pete. It was really, really well done. In terms of our own marketing plans, really, my time there was spent meeting with a lot of the CART people that I need to get to know, and talking about localテつ -- potential local market programs and dealers in different cities where CART will be racing. We've already hired sanctioned two full-time sponsor activation people. One to work on specific activation of CART as a marketing platform for Ford and Cosworth and media relations person, both working with CART promoters, teams and sponsors, and the media. One of my goals is to try to get our dealers involved in various markets so that it really becomes very akin, I believe to, what Al was talking about. When you get a lot of activation from the local dealer group that results in sales of our products. That's where we are going to be spending a lot of our time. From the racing point of view, I talked, I would say, with the vast majority of team owners and team managers with other of their technical people, and was very pleased to hear all of the praise that the Cosworth environment is receiving, and I've got to say from having been in many races, I believe the engines performed great all weekend. Just a very, very well done event from the customer point of view; I think a lot of customer satisfaction. I believe they will certainly be looking forward to next year and Ford views CART as really marketing platform that is one that helps us build our brand equity of the Ford oval. It is another means of us connecting with our customers and predisposing them to our products and the sale of our products. So overall, we were very, very pleased. I watched, also, the TV coverage, which I thought was really, really well done. I thought the TV coverage was great. We are going to be advertising on every race, and our ads look great. So I was really, really pleased with that. Overall, I came in smiling and I left with even a bigger grin. So I think it was, it was definitely a home run weekend.

ADAM SAAL: True story you just mentioned about the particular journalist, "contagious" is the words we keep using and the enthusiasm we definitely got with Robin and he was telling the mayor that. We are very fortunate to have within the City of St. Petersburg a great mayor's office led by Rick Baker and we could not have done it without their support. Moving on to our final guest with us before we open up to questions with the press, Kathy Feeney is the executive vice president of Pacific Care Secure solutions and it was their debut with a very interesting program this year. They got on the podium with Bruno Junqueira and Newman/Haas racing for the first time in an eventful run with Bruno and they are also an event sponsor and have some signage. Welcome, and it's great to have you here. Tell us about your program this year, how you are going to venues, the teams, as well as your affiliation with Champ Car and what your initial impressions were in St. Petersburg.

KATHY FEENEY: Thanks and glad to be a part of the team here and an opportunity to be able to address thanks to Chris for your efforts, also. I don't know how many people saw the Monday front page, but to me it summed it up very well. It was a winning weekend and exceeded our expectations out the chute. We are new to this and joined for several reasons for not only the broad reach from the dynamic sport that we are going to be associated with, and the kind of marketing reach that we could not get, being a single player, but we are a company on the move and being involved with CART and Newman/Haas, it's a strong fit with our corporate positioning and our marketing strategy. We saw this all over the event. Our brand motto is "caring is good, doing something is better"; there was a ton of doing as we got involved. I would say we caught the fever early on. We came in on Thursday and debriefed this morning, we all wanted to be back at the racetrack. So we definitely have caught the fever. We are not only going to be involved with Newman/Haas and CART within the marketing program, but really proud to be constructing a program as exclusive health care provider to the entire 19-race series. So, as we reflect on the last weekend, in terms of our marketing expectations and an organization, we are currently in eight states presently and it's basically Texas west. We are based in California. We are looking to expands on a national platform. The guests that we invited to be with us this year, this experience, I'm understating this, but in three days, we built relationships that would have taken us not only one year to build, but years to build. And it had to do with not only the things that we've set up, but with the environment within the whole race culture, if you will. So the dynamic winning attitude from everybody involved from Bruno to the pit crew to the people at CART and part of Newman/Haas, we could not have asked for a betterテつ -- a better entre into the arena. As we are embarking on meeting with people after the race, we definitely ranked well.

Q. How do you plan to expand the event next year?

CHRIS POOK: I think that you obviously capitalize on the good publicity that came off the weekend. You go deeper into the market. You go deeper into the surrounding market area. You encourage obviously Bridgestone to come back and rebound their promotion again next year. As you heard Burt Diamond say, that he is anxious to get his dealer body involved, and we work with Burt to get the Ford dealers involved in the marketplace and getting them to merchandise and promote around the area with Pacific Care. We look at the cities and the counties and the large employers in the area, and discuss with them programs how we can help Pacific Care get to their market share and promote their products in the marketplace. Obviously, you build upon the PR campaign. I think one of the interesting things that came out of the weekend was obviously the two Tampa Bay Buccaneer football players that were well-loved and well-recognized in the area, and those guys had such a great time, they will be back and I think they will be back with a lot of their friends. You can't beat that crossover marketing. So we will continue to use that methodology to get to our customer base in the market area and continue to work with the media, the print media, and electronic media on greater awareness as we move forward.

Q. The rule changes, the one thing that I would be interested to hear comments on specifically regarding the competition is the 8-minute penalty to drivers who cause a red flag during the sessions. In one respect, that's not fan friendly, since it can remove some of the contenders that the fans like the most who actually may be victims rather than attempting to prevent some sort of a fraud on the qualifying session. I would like to hear if there's any possibility that would be changed somewhere down the road.

ADAM SAAL: I think it would be appropriate for me to go ahead and handle this question. We've demonstrated a willingness to not certainly make weekly changes to the competition but always to take a look at rules and where they can be improved, changed or altered and improve the overall experience for both our fans and our sponsors and our competitors, then we would look at that. It's ultimately the chief steward's call. We have decreased in the past the amount of time penalties. We have allowed two key drivers on track. For example, you would lose your fastest race lapテつ -- your fastest lap in that session and still continue in that session in the event of causing a red flag stoppage, as opposed to having an 8-minute penalty. So we have gone to the right direction in the past. We would definitely checkテつ -- if something is working, we will keep it working and if something needs a look we will be more than happy to take a look at it.

Q. I did misspeak. I was speaking of losing the fast trackテつ --

ADAM SAAL: Exactly. That was done last year rather than park one of the cars for 8 minutes so the fans cannot see one of their drivers in this action, in which you could lose the fastest lap. So we will always take a look at everything and improve the overallテつ --

Q. Your first race you got to implement everything you have been talking about for the last four or five months' is there a sense of relief of what you and your people wanted to see worked?

CHRIS POOK: Absolutely. You know, you laid out a strategy forgetting from A to B, if you will, and our strategy was to get from Fontana at the end of the season toテつ -- from Mexico City, if you will, because that was the last race for Mexico City to St. Petersburg with a new fresh group of faces, fresh group of owners and to be sure that we had a good grid and that we would have an exciting race. At the same time, digesting the new engine formula which Ford Cosworth have done an outstanding job on; and also making sure that our tire program at Bridgestone worked well. When you accomplish all of your goals that you laid out as injure strategy planning four months before, four and a half months before, very clearly, you have a sense of relief. It also inspires confidence in your team because they nowテつ -- they say, "Okay, we got that one done. Now let's attack the next one." We will now start working on the next set of goals and objectives for this company very much earlier. To be honest with you, we probably thought that we would not accomplish all of our goals and objectives right away. We thought we might beテつ -- Long Beach or maybe Milwaukee might be a point where we would get that done. Now we have got it done and we are out of the chute now and on to the next set of things that we need to get done. At the end of the day, of course, the hard work never stops, and we can't afford to rest on our laurels, nor can we afford to dwell on the problems of the past. The past is the past and we don't want to deal with it. It's there, we can't change it. Now we are moving on and moving to the future and being sure that we deliver value to all of the companies and sponsors who are involved in our series.

Q. You talked in your opening statement about the marketing program that you had with the local companies down in the St. Pete area, and you and I had talked before that, not only in the Bridgestone program, you do go after new customers and walk-ins, but you also like to see the morale of the employees and the people in the stores. Was there an impact on that?

AL SPEYER: Most definitely. They were really pumped about the race, starting last year right after we made the announcement that we would be takingテつ -- presenting sponsorship role and when they found out that Bridgestone would be the official tire of the St. Pete race, as well they went into high gear. テつ In the midst of the promotion they saw the fansテつ -- inaudible -- Chris was kind enough, along with Jimmy Vasser to come up on Sunday morning to come up to the hospitality area there for the top store managers and their families. A lot of their kids were there, their spouses and all and those managers and the store, lovely people, the sales floor employees, I have never seen them more excited before. It hit on all of those bases for us, and not only the associates, as well.

Q. Who were they happy to see, Chris or Jimmy?

AL SPEYER: Since Chris was on the call, I'll say Chris. From a business perspective, I seriously mean the business people very much could relate to and hear Chris's story about how the whole marketing program, business of motor sports makes sense for all of us. The younger kids, they probably enjoyed seeing Jimmy a little bit more.

Q. Kathy, you talked about the fact that you were able to expand and enhance relationships past what you could do in a normal office climate. Talk about that. Were you as a company surprised about that?

KATHY FEENEY: Yes, I personally was surprised that the relationships went so deep. A good measure of that is after the event is over, and the continuation of conversation well into Monday and into today. When I look back on the weekend, it was the whole experience. It was the fact that people connected with the race car driver, with Bruno, with the various people at CART helping to bridge relationships with the racing experience. People got engaged and we were able to create venues where we could have business conversations in watching the race' and you're watching the preparation and you're watching the detail that goes into everything that happens out there. That experience came into our business relationships, and we were able to nail some things down in a much more succinct and coherent manner than we would have been able to do in an office setting.

Q. Do you know how many first-time race attendees were there?

KATHY FEENEY: I would say that 85 to 90 percent of the people had never experienced a race before.

Q. What's the next step in terms of developing the drive to household names so that -- experience better TV ratings by having for the most part fans worship heroes, and I think in CART you may not have too many of those. I would like to hear from Bridgestone and Ford as to whether or not they plan on bringing the drivers into their advertisements so that these drivers names get out to the public.

CHRIS POOK: One of the things that we have to do is we have to get off the sports pages into the lifestyle and the business pages of newspapers and those sections in the electronic press, and it's a very high priority of ours to do that. The very same formula that we are in these cities and these are markets -- because about 20テつ percent of the fans are diehard race fans and the other 80 percent are the general public that come to the event. That's where we have to build in name recognition and in that segment of the marketplace and that segment of the media marketplace. In regard to television ratings, another reason we are in these major markets is simply that we do have a lot of folks that come to these events for the first time or maybe only go to one or two events a year. With the volume of people that are in these major markets, we haven't reach a far greater quantity. Even though you don't come to the race itself, if you are in the major market area, you are certainly very much aware of it and you will turn your television set on and look at the race and watch it. Gradually, step by step, the structured PR plan, we will be able to make these names fairly household names. It takes time, but we have a very clear mission and we have a very clear focus and we will get there. The final point is, I think that we have a youngster that sat on the pole down there, Mr.テつ Bourdais, that is a pure rookie, and a tremendous riding talent. I think you will find that as when Montoya showed up on the season, no one knew when he was or Zanardi came over, not too many folks knew who he was, he will be rapidly embraced and that will help him. Certainly when you haveテつ -- or the potential of being the media outside of the sports pages will be interested in finding out about it and talking about it, it's our job to facilitate that. When you get the media talking aboutテつ them that draws the public's attention to the sport and they can start to look at some of the other names in our grid.

Q. Do Ford or Pacific Care have plans are doing any of that kind of stuff?

AL SPEYER: I can speak from the Bridgestone perspective. We've already done some of that. One of the key things is step by step, prior to the event is part of our promotion down there, we have drivers make appearances at our stores and these were the Tire Plus and Tire Stores locations. I know Mario Dominguez and Bruno made store appearances and those appearances were preceded locally by us which gets their names in front of the fans down there. We have seen so many times before that when those fans can meet a race car driver, get an autograph, that connection is long-lasting connection and they feel part of the sport. We also have a print ad campaign that was out prior to the St. Petersburg race just prior to it, that ad really features right now Adrian Fernandez, because he is one of the long-standing drivers in the series, and that will rotate to show the different winning drivers throughout the 2003 season. We don't have any plans to do a television commercial with the drivers and we have that kind of on the wish list. If funding becomes available, that's certainly something we would like to do. But it was mentioned earlier and I think a large part of this is the media and the excellent coverage that the local media gave to the event folks, the television and newspaper that I'm aware of, I think are a large part of this. I think when the local media starts covering it and you have a full separate section in the newspaper on nothing but the race, I think that's the type of thing that everybody takes notice of and it will start to get national attention. There are some things that we are doing and obviously we could be doing more. I think as a selection of sponsors. If we all keep working on it, we will reach the ultimate goal of making many of these names household recognition.

KATHY FEENEY: I'd like to underscore what Al said. We are not planning television at this point but as we go from race to race, get more of the nooks and crannies of the environment and from our first time out we know very well from our internal people and our external customers the plan should go as we get into states that we are currently into with similar membership to expose our membership over 3 million people to our race car drivers.

BURT DIAMOND: We do have a media and a strong presence. As I have mentioned before, we have already hired two full-time people to work on that and media relationships. And obviously one of the things they will be doing is working with CART and obviously that means the drivers that that participate, as well as the team and the sponsors. I think getting back to the point you made about NASCAR about quote unquote stars, I think that's true, but I think a lot of that developed over time and it developed a lot, I would say, in my opinion recently, as the sport really exploded. So I think a lot of the stars that you look at when you are talking about NASCAR, there were a lot of elements that came together and worked together a long time to create that phenomena. A lot of it was team sponsors, a lot of it was the growth of the sport from regional to national. A lot of it was the recent major TV programming package that was put together. Basically we like to work with the drivers on a local basis because as I mentioned before, we want to get our local dealers involved, so that at the end of the day, we are using this as a marketing platform to highlight our products and to sell more of our products. I think that one thing we will be looking forward to doing is what Bridgestone did, is bring in a driver, bring in a Jimmy Vasser, bring in a Patrick Carpentier or any of the drivers that actually interface with the public and that is supporting the sport. Over time that may lead to what I call more of the "star" type of phenomena that then makes a natural connection or more of a natural connection and more of a recognizable connection to having these people actually get a medium like TV side by side with our products. Right now as our TV exposure rises, the vast majority of our TV exposure, no matter what kind of programming that's on, it's there to highlight and educate people about products that they can buy at our dealerships.

ADAM SAAL: We obviously at the Champ Car level support the plans that Ford identified with their vehicle. We do have a Pace Car program, fully-tired on Bridgestone, and we will see what we can do to help out Pacific Care in that area, as well.

Q. Maybe for Chris and Adam, what can CART do to make that great event even better?

CHRIS POOK: Well, clearly the standard of the competition on the racetrack will increase as we go into the season. I think you have to recognize here that this is the first race out of the box with the newly-configured Ford Cosworth environment in its 750-horsepower format on Bridgestone tires. I think that that area and the competition area will improve over the season as we go and we will have another very intense race. I think the racetrack itself is a very raceable racetrack. I think the fact that we have got the driving of the car is back in the handsテつ of the driver -- we have had a debriefing session on Sunday evening. We had another session with the folks at Dover Motor Sports (ph). You'll see many, many more folks in the harbor beside the racetrack. You will see a lot more grandstands. You will see a lot more activity. You will see a lot more merchandising of the event, not just in the St. Petersburg city itself; in Tampa, Clearwater and the surrounding areas. That's really how you start toテつ -- if you grow on event, you create the excitement level, take it up to another notch and the happening starts to occur and it gets marked in everybody's calendars. The good thing how I think about this is that on Sunday when I walked around the racetrack, I walked around the whole place with my wife. We were constantlyテつ -- the folks that were in the general mission areas saying that, "Gosh, it was great, we are going to buy a seat and bring our friends." That's pretty positive.

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