INDY RACING LEAGUE MEDIA CONFERENCE
August 3, 2004
TOM SAVAGE: Good afternoon, everyone. We'd like to welcome everybody to today's Indy Racing League teleconference. Today marks a historic day for the Indy Racing League and the IndyCar Series. We welcome your questions following opening comments from our five guests on today's call. Earlier today the IRL announced its 2005 IndyCar Series schedule, which will include 16 races and for the first time two road course circuits. For a complete print of the list of the '05 IndyCar Series schedule, visit our website at www.Indyracing.com. On today's call we'd like to welcome five guests, who include Tony George, the president and CEO of the Indy Racing League; Ken Ungar, the senior vice president of business affairs for the Indy Racing League; Brian Barnhart, senior vice president of operations for the Indy Racing League; Steve Paige, the president and general manager of Infineon Raceway; and Craig Rust, the president at Watkins Glen International. Tony, let's start with you. Can you talk about the decision of going road course racing at this point in time.
TONY GEORGE: Thanks, Tom. I'd like to say first of all, I'm in Indianapolis, and I understand that both the press conferences went well at Watkins Glen and at Infineon Raceway. For that I want to thank the management of both those facilities as well as Ken and Brian and the drivers that attended, and both the staffs that worked hard to make this come to fruition. It sounds like it's been very well-received. I look forward with a great deal of enthusiasm to the 2005 season. It will mark the 10th season for Indy Racing League. Many would consider that a relatively short existence, but certainly open-wheel racing and IndyCar racing, as it's been known, it's been around for a lot longer than that. We're very proud that the Indy Racing League provides exciting, close competition on track. It's really starting to mature now as a sports sanctioning body and as a racing series. We appreciate all the competitors and manufacturers and fans that support the league. I think that road racing is something that we've always had on our agenda from the time we started with the Orlando race in 1996. Between 1994 and 1996, we were sort of developing a vision for the Indy Racing League as it came to be known. All along we had contemplated running road courses and street circuits possibly at some point in time, with a real focus on preserving and protecting the open-wheel oval racing aspect of major league open-wheel racing. We tried to encourage investment in new permanent oval facilities. I would say that the last 10 years has shown a couple of billion dollars of investment having been made in those permanent type facilities that we very much want to continue to support and have committed to support. But we view road racing as something that we want to have as part of our schedule, and it will be now beginning in 2005. We've always said if and when the right opportunity presented itself, we would add road racing. And we're happy today to be able to announce that Watkins Glen and Infineon Raceway will be part of that in 2005. With that, I'll turn it back over to you, Tom.
TOM SAVAGE: Thank you, Tony. Steve Paige joined IndyCar Series drivers Tony Kanaan and Townsend Bell from Infineon Raceway today to make the schedule announcement in northern California. Steve, thank you for joining us today. Congratulations on an a exciting announcement from your racetrack.
STEVE PAIGE: You bet. It's a very exciting day here. I've been at this track for 13 years. From the first day I got here, one of my objectives was to bring IndyCar racing to this track, the San Francisco Bay Area, the Sacramento markets, which is where our fans come from. A lot of interest in this series coming to this track. It's a very exciting day for us.
TOM SAVAGE: Thank you, Steve. Ken Ungar was also at Infineon for today's schedule announcement and joins us today from Infineon. Ken, thanks for joining us today. Can you talk about what the addition of Infineon and Watkins Glen, how that opens up an entire new world really for the Indy Racing League as far as business affairs and marketing to an entirely new group of fans?
KEN UNGAR: Thanks, Tom. Really appreciate it. Thank you everyone who is joining us today on this call. The addition of Watkins Glen and Infineon Raceway to our schedules is really a landmark for the Indy Racing League. From a business perspective, it helps us access not only two important markets geographically for us, but also to bring the excitement of IndyCar racing to road racing fans and open up opportunities for us in terms of serving race fans as well as race teams and drivers who enjoy that racing and sponsors who are committed to road racing.
TOM SAVAGE: At the same time Steve and Ken were making the announcement in northern California, Craig Rust was doing the same at Watkins Glen International. Craig, thank you for joining us on the call and congratulations to you for your announcement today.
CRAIG RUST: Thank you very much. We're thrilled up here. There's been a lot of excitement around the potential of getting this race. Our heritage is born out of open-wheel racing, so we believe it's going to do very well, be very popular. We're looking forward to having been able to bring it back to Watkins Glen. As I said, it's our history, it's where our roots came from.
TOM SAVAGE: Brian Barnhart from the IRL also joins us today from New York where he was at today's scheduled announcement at Watkins Glen. Brian, thank you very much for joining us today. Can you talk about how the league, from a technical standpoint, has been preparing and will continue to prepare to go road course racing next year?
BRIAN BARNHART: Sure will. Thanks, Tom. It's been an exciting day and an historic one for the Indy Racing League in announcing both the famed road course of Watkins Glen and Infineon on our schedule for 2005. The excitement has been really outstanding. One of the greatest things that we've had the last couple of months from Ken and I's standpoint is we just received many, many letters, e-mails and calls from the very passionate and enthusiastic people of this community seeking the return of IndyCar racing to this historical facility here in Watkins Glen. We're excited about being able to provide that in 2005. From a technical standpoint, we're working very hard to maintain the goals and the values of the series. It is going to create some new challenges for us. It's going to create new challenges for the teams, their engineers, their drivers. We're doing everything we can to maintain our principle of cost containment while allowing for these specifications and the changes necessary to make the cars. We are very strictly limiting options available to them to control the pace of development, to control the costs spent on the addition of road racing. We're trying to find a real good balance of adding venues that are good business opportunities for us. It's where our fans want to see us, where our teams want to go, yet at the same time adhering to our founding philosophies and principles as we move forward.
TOM SAVAGE: Thank you, Brian. We have several media members on the line today, so we'll go ahead and open it up to questions at this time.
Q. I have a couple Florida related questions for Tony. I see that Homestead is number one on the schedule again. Obviously, you must be pleased with that market. Also is there any possibly of adding a street course at St. Petersburg?
TONY GEORGE: Well, the Miami market has been good so far for us. It's shown improvement and growth. Certainly I think Curtis has done a very good job for us down there. We continue to look forward to opening our season down there. But with regard to the rumor of St. Petersburg, you know, it is something that is a rumor. Usually where there's a rumor there's some smoke. Whether or not there's any fire, I don't know. I think we'll have to wait and see as to whether or not an opportunity presents itself.
Q. Would there be any possibility of next season or are we looking beyond that?
TONY GEORGE: Anything's possible. Certainly by announcing our schedule today, it's not something that we were compelled to hold up our announcement of what we knew to be firm and ready to go. Our teams, our sponsors, all of our stakeholders are looking to us to make our plans for 2005 known. I think if it comes about, it will be a bonus. I think it's a good market. It's a good venue, from what I recall, having seen on television when they ran there last year. Certainly it is a market and a venue with a lot of potential. Its future on our schedule is not known at this point.
Q. In regards to Phoenix moving to a Saturday, what were the reasons behind that?
KEN UNGAR: The Saturday event at Phoenix was driven primarily by television availability. We had the strong desire, as the track did as well, to keep the event on that weekend for date equity purposes and the window that presented itself for us on network television was on Saturday.
Q. Was that NBA driven?
KEN UNGAR: The NBA was one of the factors. There's a variety of television, you know, during the spring, especially in March. It's one of the most packed portions of the television schedule in terms of many different sports that are on television. There were a variety of things, including the NBA.
Q. I assume this is probably temporary, one-year deal?
KEN UNGAR: Yeah. Our desire would be to keep our schedule for consistency purposes on Sundays, yes.
Q. Do you know if it will be ABC or ESPN?
KEN UNGAR: We need to confirm that and we'll be doing that shortly as we put out our full television schedule here soon.
Q. Bryan Herta was out here before the Indy 500. He said these cars pretty much could go road racing right now. Is there anything that has to be done or can these cars pretty much go from what they are right now to a road course?
BRIAN BARNHART: In answer to that, we did about two-thirds to three-quarters of the kit during our update kit from the end of the 20003 season into 2004 by changing the radiators, the side (inaudible), to enable for better cooling to go road racing. We still have a short list of things to do, which we've got to do some new upright brakes and a limited slip differential for the power train and the gearbox. We are hopefully having the mechanical bits done. All the aero bits should be finalized. We've got a few mechanical bits to do yet. We should be testing those hopefully in the next month. We're getting pretty close, yeah, but we've just got a little bit to finalize.
Q. Champ Car's contract with the Long Beach Grand Prix is up after next year. Is that something where we might see you guys be interested in for 2006?
BRIAN BARNHART: From my standpoint, Long Beach has a storied history. If an opportunity to race there was presented to us, I think we'd certainly have to take a look at adding it to our schedule.
Q. Are there any other road courses that you're looking at? Within how many years are you looking to expand road courses, maybe adding some ones that are out there, such as Mid-Ohio, possibly Elkhart Lake?
KEN UNGAR: You know, growing the schedule in a very methodical, determined way has been something that we've done nearly from the beginning of the Indy Racing League. We go into a market and we establish partners with the intention to establish long-term relationships. If you look at how we're looking to develop our schedule, topping out at 20 races as a fully mature schedule, and having a number of road and street events being a part of that, our target would be in the range of six, we have to very carefully determine new opportunities in roads and streets as well as ovals that we're not currently racing at. So the road courses that you mentioned are those that we have talked to during this process and have considered, but it's a very complicated process as we look at markets. We look at the venues themselves and the combination on our schedule, both in terms of geography and in terms of climate where it fits on our schedule. Very complicated, but those are venues that we have spoken to as part of this process.
Q. Ideally, if you add more road courses, are you looking to kind of space them out when you talk about climate, maybe try to have a couple in the spring, a couple in the summer, a couple in the fall?
KEN UNGAR: Well, I think Brian would probably be good to address that from a competition perspective. But a business perspective, it is good to the extent you can to group them as close together as possible to build some promotional activities round the fact that there is a road racing portion of our schedule. So there is from a business perspective and promotional perspective, there is some energy around doing that. I think I'd let Brian address that from a competition perspective.
BRIAN BARNHART: One thing you'd be careful about on doing that is turnover on the cars. And depending on how the schedule plays out, when the dates are, it could get a little tricky turning the cars from oval track configuration to road track configuration, then back to oval again. You'd kind of like to provide some consistency for the teams there if you're running back-to-back or back-to-back-to-back weekends. We are trying, like I said earlier, to limit as many options as we can to the teams. We have very resourceful teams, and they will respond whichever way we need to do it. There's a lot that plays into that, as Ken talked about, the complications in creating a schedule with available dates, climates, television opportunities. So we'd certainly respond to whatever would work for our teams and we'd be there (inaudible).
Q. Tony, could you speak to the month of May schedule, where you think it is at this point? Have you had any change of heart since we talked about this in May?
TONY GEORGE: I don't recall a conversation in May, but I don't think that the month of May schedule is ready to be announced. I know that my team here, both at the league and the speedway, have had some meetings and dialogue about that. You know, everyone's had a chance to weigh in with some creative thinking. I've offered some of my own. I think we'll be having some follow-up meetings probably in the next few weeks once everyone's schedule has settled down again. I would think that we'll probably address that sometime early fall. I don't know when we normally announce our month of May activities. It's only become necessary I think in the last 10 years that it's changed all that much. But I think whatever we do, hopefully we'll make as much sense to everyone else as it does to us.
Q. Can you give us an inclination if we're looking at more likely to stay the same or more likely to change?
TONY GEORGE: I don't think I can give you any sense for that right now.
Q. Ken, it's my understanding that the people at Kansas Speedway kind of pushed for a different date because of the heat. Can you tell me the factors involved in your decision to keep it where it is?
KEN UNGAR: We worked really hard with Jeff and his staff at the Kansas Speedway to look at every possible combination of dates to determine if there was an alternative to the July 4th weekend where we've been at. Certainly we like to be on a holiday weekend in Kansas. That's been very successful. But we decided jointly with the track to address it because of the abnormal heat we've had - not as much this year, but certainly the past few years have been pretty hot in terms of the ability of fans to enjoy the event. So we looked at dates in the fall and we looked at dates in the spring. Unfortunately, due to television availability, proximity to other events on their calendar, proximity to events on our calendar, we just couldn't find a date that worked for all of us.
Q. Do you remain pretty firmly in favor of keeping it on the Sunday rather than moving it to a Saturday night race?
KEN UNGAR: Well, certainly Saturday night racing is something that we have done for many years. The first Saturday night race I believe was in '97 at Texas. It's something that our fans have enjoyed. It is not something, though, that we have looked to expanding in terms of additional night races. As time goes on, I'm sure we will have that conversation with the folks at Kansas. It remains one of our best events. We love going to the market. We think everything kind of works for us in that market. We're going to look at every combination possible to try to create the best event and environment for our fans.
Q. 16 races on the schedule right now. Could that go up before next year?
KEN UNGAR: This is the schedule as it stands now. We've had instances in the past where we've added races after the original schedule was released. As Tony mentioned, in the case of St. Petersburg or any other possible opportunity, we'll just have to wait and see what other opportunities are presented to us.
Q. Ken, I spoke to you about six weeks ago. It sounded like you were pretty eager to try to make Portland a part of the schedule and get up into the Northwest market, which is relatively untapped by major racing. I'm curious how close Portland actually came to being on the schedule. Does the league see any urgency in getting out to a market that is pretty under-served?
KEN UNGAR: Well, we had very good conversations with both people at the City of Portland, the people at Portland International Raceway, as well as the promotor that we had been engaged in dialogue with, PJP, Peter Jacobsen Productions. We worked long and hard to try to create all the factors that needed to come together in order to make an event. As it turned out, really it was our schedule that could not accommodate a race at Portland. The Pacific Northwest continues to be a priority for us. Just the other night, meeting at a social event in our paddock at Michigan, a number of competitors, teams and sponsors expressed interest and possible excitement about being at Portland in the future. Even though it's not on our 2005 schedule, it's not something where the doors have closed. It's just we were not able to make all the stars align in 2005.
Q. With ISC announcing plans to build a track out there at the end of the decade, to have some big-time NASCAR racing, do you see it as an opportunity to get out there maybe before even NASCAR does and tap into things?
KEN UNGAR: Well, ISC has expressed an interest in building a track in the state of Washington. They have made us aware of their plans. Certainly if they do, that's one opportunity that may present itself. That may be the way that we choose to serve our fans in the Pacific Northwest. But until something like that happens, it's really too early to say in what way we would move our schedule.
Q. Ken, how difficult was it to make the decision to move the finale from Texas Motor Speedway to California? Was it a case of just you couldn't get that worked out because of the logistics?
KEN UNGAR: It was a very difficult decision in the sense that we've had phenomenal response from the fans in Texas ever since we started racing down there. But at the same time we feel confident in the plans put forward by Bill Miller and his staff at the California Speedway, and their title sponsor Toyota. You know, the sign in the garage at Texas Motor Speedway says, "Welcome to the second home of the IRL." Eddie Gossage and his staff have worked tirelessly to make Texas Motor Speedway our second home. But, you know, at the same time we gave Texas Motor Speedway an opportunity to showcase its facility with our great racing, so we can both take credit for helping each other grow. But, you know, while we are sad to see the second Texas event go, we're very optimistic about moving the finale to the California Speedway in 2005.
Q. Did he just give you one choice, finale or none at all, you couldn't move it up?
KEN UNGAR: The interest of the track was to retain the finale and move it earlier in the schedule to give it sufficient distance for the fans to have breathing room before the second NEXTEL Cup event. That just wasn't possible in light of all the other scheduling issues that we had. Eddie and we worked very diligently trying to see if we could move all the jigsaw puzzle pieces to make it happen, but in the end we just couldn't.
Q. Tony, what persuaded the IRL to come to Watkins Glen? Did Nazareth's demise influence that decision at all?
TONY GEORGE: Well, ISC's decision to change direction with Nazareth certainly influenced our decision to go to Nazareth. It was offered to us as an option which was, quite frankly, attractive. I think with Watkins Glen's history and tradition, the fact that it's a natural terrain road circuit, in a geographic area of the country that we really weren't in, it all made sense. I think there's a willing partner up there that we're familiar with that has certainly rallied a lot of support and encouragement from its fan base and its local population. All those factors entered into what was really a pretty easy decision for us. It was a great opportunity.
Q. How instrumental was John in putting this deal together?
TONY GEORGE: Is that for Ken?
Q. For Tony.
TONY GEORGE: Well, John is really a part of the overall conversation we have at a higher level. I'd say Craig Rust really worked hard as being the manager at both the facilities, was the guy on the ground. But John certainly has a history at Watkins Glen, as well, and certainly communicates with myself and Ken on a regular basis on the global picture of the ISC/IRL relationship. So he was important.
Q. Tony, what kind of changes to the racetrack will be required to accommodate the IndyCars?
TONY GEORGE: Well, we've gone and made a site visit. We've looked at the facility. By and large, I've seen a number of improvements over the years, not only at Watkins Glen, but at Infineon since I've been going out there for the last 15, 20 years to each place. I've competed in some fashion on both the circuits. I think both organizations have done a good job of updating their facilities. We have a specific list of things we'd like to see done, all of which I'm not familiar with at this point. But there's some typical things you might expect with runoff areas and whatnot. But it's not a very extensive list. I think we were pretty exhaustive in our critiquing the facility. Again, I think they'll continue to make improvements to the facility that will benefit all the events that run there as time goes on.
Q. I was wondering if these deals to race at the road courses next year, do they extend into sort of an open-ended agreement or are the schedules made on a yearly basis? I guess what I'm asking is, how many years can fans anticipate the IRL coming to the Glen?
KEN UNGAR: Typically, as other racing series do, we make our arrangements from a contractual basis on a year-to-year timetable. However, we don't come to any venue without the expectation that we will be there long-term. So we hope when the fans turn out and when the sponsors come and everything happens next year at Watkins Glen that it will be the first of many years at the Glen.
Q. Two road courses on the schedule for next year, but still only one short track. Does the IRL ever see adding another short track to the schedule or are you pretty happy with Richmond filling that niche?
BRIAN BARNHART: I guess you consider Richmond as our only short track, but I would look at Phoenix and Pikes Peak also being one-mile ovals. We run short track configuration there. Milwaukee, as well, was added this year. I guess if you go away and look at our aero packages, we have multiple short tracks on the schedule.
Q. Tony, attendance has been steady at Richmond, but maybe sort of flattened out a little bit. Seems like it's been 40 to 50 for each of the four races. Are you guys happy with the attendance being at that spot or would you like to see it gain a little bit for Richmond to stay secure in the schedule or would you be happy with that kind of crowd year after year?
TONY GEORGE: Well, we've been happy with the turnout that we've seen at Richmond in the last few years. It's certainly encouraging. I think we put on great racing. In fact, I've gone on record as saying it's one of my favorite venues that we race at now. I think there's always potential for it to continue to grow as there's a better awareness and understanding of what the Indy Racing League is. But having said that, it continues to be a challenge for us to really perform as well as everyone would like to see us perform attendance-wise at a lot of venues, it has so many races, including two NEXTEL Cup races, not to mention Busch races, truck races, modified races, USAC races, a lot of racing on the annual calendar. But, again, I think while you could say it's leveled off, I still think there's a great show that we put on at Richmond and a potential to grow the audience over time.
TOM SAVAGE: Thank you, gentlemen, for joining us on today's call. We'd like to thank the media that participated in the call.
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