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June 21, 2000

Bobby Rahal

RON RICHARDS: I'd like to welcome everybody to our special teleconference today. I am here in our offices in Troy, Michigan. Our special guest is in his offices in Columbus, Ohio, so I think all of you are aware of the fact this past weekend there was a significant -- saw a significant change in the direction in the management here at Championship Auto Racing Teams. Last Friday we named one of the legends of open-wheel racing as interim President and CEO of CART. Bobby Rahal won CART Championships in 1986, 1987 and 1992 and he drove the victory lane in the 1986 Indianapolis 500. Bobby finished his CART racing career in 1998 with 24 victories, placing him fourth on the All-time CART Wins list. He was part owner of his racing effort in 1992, Rahal Hogan Racing; then started Team Rahal in 1995 and Bobby and David Letterman currently have Max Papis and Kenny Brack driving for them in the FedEx Championship Series and Max kicked off the season with a victory at Homestead Miami Speedway. I'd like to welcome the new President and CEO of CART Bobby Rahal to today's teleconference.

BOBBY RAHAL: Thank you, Rob, good morning, good afternoon wherever you may be, everyone. I am looking forward to your questions. It has been obviously a wild time as you can probably imagine. In fact, I am on my way up to Detroit here right after to the offices for the next day or so, so I have to tell you it has been fun and I am very optimistic about the future. So I guess with that, fire away.

Q. I wanted to ask you about last night's dinner and if --

BOBBY RAHAL: At the White House?

Q. Yeah, if you got any tips or anything, any suggestions from the King of Morocco?

BOBBY RAHAL: No. And I will dispel any rumors that may start already - CART is not looking at a race in Morocco.

Q. How was that, though?

BOBBY RAHAL: It was exciting. It is not often -- I had the honor to go to -- privilege, really, to go to the White House in 1986 after I won Indy and I met President Reagan and that was truly a great experience. Any time you are in the company of the President of the United States and you go to the White House, it is pretty awe-inspiring and a great experience and he was very, very warm and hospitable, both he, The President and Mrs. Clinton, so it was a good time.

Q. The other question I had is switching gears to racing, you have mentioned that you would like to get a schedule out in the next couple of weeks. Do you think you'd have something around the week of Cleveland?

BOBBY RAHAL: That is a couple weeks from now, right?

Q. Yeah.

BOBBY RAHAL: That might be a little quick, but only reason I say that is I like to give myself some wiggle room. As I have said earlier, my intent -- when I said as soon as possible that means if we can get it done tomorrow we would. We are very, very close to doing that, so there is a chance that it could be done in time for Cleveland, but give me a little breathing room.

Q. We reported today that Montreal is bidding for a CART race. Your predecessor, Andrew Craig, said he was opposed to three races in Canada. What is your take on that, would you go for three in Canada?

BOBBY RAHAL: Well, I think, obviously, it is important to understand Molson's position being they are the ones that brought us to Canada in the first place. That would be -- and I don't understand that position specifically at this time. So that would be job No. 1. I have to say that, as you might imagine, there are many, many -- there is more than a few circuits that are interested in hosting us and they are all very good circuits and very good markets. Montreal is obviously a good market. Having said that, I think we have to be -- we have to be cognizant of the fact that we can only have X number of races and while we'd like to include everybody, that is just not physically or financially possible for the teams to do so. So we have got to figure out just how many races we want to have and just where they should be and while Montreal certainly would be, as I say, it is a market that is of interest, it has to be balanced in the overall scheme of things. So I don't want to say yes; I don't want to say no, but certainly having raced in French Canada for many times over the years, and, of course, it would depend on where it would be in the Montreal area, but that is a great motor racing area, tremendous amount of interest in it; especially with Patrick and Alex there, obviously that would be -- they could be a big draw. We will have to balance it and see, and, as I say, I don't want to raise hopes, but I don't want to give false hope either way.

Q. Have you seen the actual proposal yet?

BOBBY RAHAL: I have not, no.

Q. I recognize that this has all happened rather quickly, but you have been a member of the Board of Directors since CART became a public company, a team owner since 1996; you were a driver for far longer. Major issues that are facing the company are, therefore, not new to you. Now that you are leading the company, what are your immediate priorities and if possible, could you give us some sense of how you see their relative importance?

BOBBY RAHAL: Well, as I said, I think Job 1, as I have said, is the schedule. That is not necessarily -- I mean, we have to do that every year. So I guess that is fairly obvious, but obviously we have our television aspect is coming out. I think Job 1, if you take the daily -- day-to-day stuff, Job 1 is to raise the level of awareness of open-wheel racing in this country and specifically CART Racing. Those are things we can do. If we do that on site; I think if we do that in the marketplace, that is going to help generate TV numbers, I think. We have got to enlist people. We have got to get them excited about what we are doing and when you go to Long Beach, you see what kind of excitement can be generated. Obviously TV ratings are an issue, but unfortunately those aren't totally in our control. So while we can contribute to the rise or to the gradual rise, we can't do it all and, frankly, that is going to take some time. I have no -- there is no illusion there on my part. But I think the big thing is taking our drivers, getting them out into the marketplace, making them more well known than they already may be in different venues; really merchandising the sport. I think if we do that and we do it correctly, that starts to drive a lot of these other issues that are problems for us. So I think that is probably Job 1 and that, as I say, that just doesn't -- you can throw the switch and you may not see a real delivery for some time, but nevertheless, the switch has got to be thrown and we have done so.

Q. Question on the competition side. The Hanford wing, your predecessor said had met none of its goals and had a short life. I think the implication was that this would be the first and last year for the second and third generations of the Hanford wing. Can you comment on? That what will replace it?

BOBBY RAHAL: The Hanford wing, as you know, came about strictly because there was a large concern on the speed of the cars on the short ovals or on, really, any oval for that matter. The Hanford Mach 1 has proven itself to be quite a good wing for, say, Fontana and Michigan where the track is wide and the relative speed is constant. The drivers tell me that if the car starts to push a little bit, they can easily move up the track a few feet and it immediately settles back up. Unfortunately, on one-mile tracks or tracks of that nature, where it really becomes pretty much a single line or not much more than that, and because of the variation in maximum and minimum speed, the Hanford Mach 2 although it was conceived with all good intentions, frankly, has while it's settled the car and made it a more comfortable car to drive, it's made it impossible to pass anybody when you are behind them. So, consequently, even though we have taken a whole different approach to controlling the speed versus a year ago, the end result has been pretty much the same. The reality is that these engines produce too much power and we have tried to, relatively, from a car standpoint, relatively efficiently, tried to govern that power by aerodynamically spoiling the cars, frankly. And the reality is that that -- while there was a noble effort and a lot of effort went into it, unfortunately the reality is the engines just produce too much power. So my view is that we will push our manufacturers and I think they are -- already a lot of very good discussion going back and forth to see how we can govern these engines more so for 2001, perhaps inlet restrictors. There is all kinds of ways -- there is a few good ways you can do that. You can also reduce the exhaust. So there is a couple ways of doing it and while it is going to be expensive to some degree, we have got to get the product better on the track and that -- by reducing the power of these engines we will be able to run normal wings and then I think we will be able to get back to the kind of racing the we all want to see.

Q. I just wanted to ask you, kind of looking back the last week or so, can you pinpoint one overriding issue or one thing and this kind of goes in line with your priorities of what you want to do-but one overriding issue that made you all decide we need to make this change and we need to make it now rather than later? Was there one thing that really kind of pushed it?

BOBBY RAHAL: I don't think there is one thing. I think this was -- I think if there was a trigger, I suppose, it was, you know, that the board was not prepared to consider extending Andrew's contract which was going to come to an end at the end of this year at this time. I think Andrew thought that there were opportunities out there and that, you know, I don't think he felt comfortable with the delay that we wanted to have. So there were some opportunity had and, as I have said, I think Andrew did some very good things over time. We have some issues, certainly. But any governing situation has issues one way or the other. But I think the trigger was the fact that we really weren't ready to start -- the compensation committee and some of the other committees weren't ready to really look into extending the contract at this point. I think that is what really kind of triggered the whole thing off.

Q. Have you had a chance to speak with Eddie at Texas Motor Speedway yet about coming there and how soon would you like to go down and schedule at TMS if you could....

BOBBY RAHAL: I have spoken to Eddie in the past mainly as friends because I have known Eddie for 15 or 16 years now, I think. I spoke with Eddie and I think both he and I believe that we can put on one hell of a motor race down in Dallas. While I will say there is discussion, nothing is formalized yet, but certainly if we go-if we are able to put something together, I would certainly hope it would be for 2001.

Q. Have you spoken to him this week at all?

BOBBY RAHAL: No I have not.

Q. Without the Hanford device, do you feel you can compete there safely at TMS at 24 degree banks?

BOBBY RAHAL: Well, we would -- we are going to have to restrict the power output of these cars next year, it is that simple, I think. Because that has an effect not just there; it has effect everywhere. So that would be taken into account obviously.

Q. In terms of the schedule, you have said last week that basically 20, 21 races was kind of the max right now. Where do you see the 2001 schedule being in terms of number of races?

BOBBY RAHAL: Well, first off, right now we are limited to 20 races as an agreement with the teams. But the teams have the right and have the ability to change that at any time. So certainly I see our future -- I see the need to go beyond 20 races. Now, how many -- I certainly don't -- we can't be like NASCAR, as I have said to many people, for our cars and the amount of travel we do, you just -- I don't think you can do it. You couldn't afford to do it to the numbers that NASCAR has. I certainly think that ultimately, you know, 20 to 24, somewhere in the 20 to 24 race range is possible. It is just a matter of how do we achieve that; where do we go; and how do we make the cars and the racing affordable enough to handle that kind of demand. The reality is that there is an awful lot of good circuits out there that are interested in having us -- in hosting us and, as you know, we have a strategy which is to align ourselves in the strongest markets here in North America and obviously overseas as well. There is a lot of strong markets in this country in the United States where we are not at yet. So I believe that we need to look at expanding the schedule, but it has to come with the agreement of the teams and it has to be done, you know, with some -- with concern towards the cost of actually participating and the other normal issues that you run into.

Q. Boy, am I happy to see Bobby Rahal be anointed king even if it is only an interim king.

BOBBY RAHAL: I don't know about the king part.

Q. I would bet if you could wave your magic wand, you could heal the wounds between IRL and CART. Do you have any definite plans?

BOBBY RAHAL: As I have said to many people, I think it is in our -- ultimately in our interest and ultimately in open-wheel racing's interest to some day find some way to create some kind of reconciliation, what form that takes, I won't hazard to guess, frankly, because obviously the Speedway has some beliefs that they hold there and what have you. But I thought it was this year, I thought it was exciting having Chip at Indianapolis; I thought it made the race a much more exciting race than it would have been. And I believe Tony feels the same way. I don't want to speak for him, but everything I have read, he certainly seemed to verbalize that, so -- and I think people who watched the race felt the same way. I have got to believe that some way, shape, or form we can -- at least for Indianapolis we can all figure out how to get together and put on a great race. But, as I have said, that takes two to tango, and all I know is that we are ready to talk whenever Tony is.

Q. As I recall you are a pretty good dancer so I wish you good luck.

BOBBY RAHAL: Thank you.

Q. Coming back to the prospect of a race in Montreal, I was at the Canadian Grand Prix last weekend. There was a lot of talk about it. I don't know if you are aware of that, but even the promoter of the Canadian Grand Prix said many times that he would welcome the CART race on his circuit. Do you think it could be possible one day to see a race on that circuit or would you rather have a race in the streets of Montreal?

BOBBY RAHAL: Well, you know, I am speaking here, personally. I raced the first race ever at Notre Dame and, of course now, Circuit de neuve (phonetic), and it is a wonderful setting, isn't it, is a beautiful setting. It is a very good racetrack as well. I mean, that, to me, is really up to the people who are actually putting the event on. But it seems to me when you have a circuit that is so good and is so close to the city, it seems to me that that would only make sense. But, again, ultimately that is up to the fellows, the company that wants to promote the race and you kind of have to leave it to them.

Q. The promoter, those people, is it Gerry Forsythe; can you say something about it or --

BOBBY RAHAL: As I say, I have not seen anything that, any kind of proposal or anything. So I am -- I would be guessing, I guess, at this stage. Having -- Gerry is a strong promoter and a successful one, so, obviously we are doing business with him in Mexico to a degree for next year, so, you know, I have no problem with -- Gerry is a smart shrewd business man and you know it would be a good event, but where it would be, as I say, I have not seen a thing, so I would just be guessing.

Q. Obviously you have been announced as interim president and everybody is understanding is that you are going to run the ship and sort of right the ship; in the meantime the CART board will look for someone else to take over in the long-term. How do you view that happening and how do you -- do you have any sort of opinions on where you would begin to look for the man to take this over in the long-term and is it possible -- a lot of people have said, well, maybe Bobby will end up being the Bud Selig and be the true interim guy and keep running it for a while; how do you look at all that stuff?

BOBBY RAHAL: In my -- from my personal situation, as I have said to many people, I have got a lot of work to do. I am excited to do it. It is a tremendous challenge, but I think our goals are achievable and we have got a great board, so, for me right now I have just got my head down and what happens three, four, five, months from now sort of happens. I think certainly the board will -- has considered having arrangements with an executive search firm to look for the right person. I personally believe that this position calls for someone with racing experience as a promoter or somebody within the industry who has run the business side as well as understands the supporting side because I think it is important to understand the nuances and the idiosyncrasies and what makes racing special because if you don't understand what makes racing special, how can you sell it. So it is a little bit like, you know, perfume, if -- really, it is water, alcohol, and some fragrance but that is not really what perfume is. Perfume is a sensory thing where it conjures up all kinds of, you know, all kinds of thoughts and imaginations and what have you. That is what racing -- they are cars, but what those cars represent and what they create is -- that is what really makes motor racing special, as a sport special. I think it is important to have somebody with experience at the helm. That is my personal view and we will see as the board -- as we discuss this going into the future and if the right guys show up on the doorstep - I am sure there is a bunch of resumes already sitting there, you know, we will see what happens. But for me, personally, I have just got my head down; we are just going to work hard here.

Q. I know you have got fond memories of going back to Westwood here.


Q. Most of the drivers I talked to; many of the team owners seem to love coming here; yet it seems there is rumors that the Vancouver is going to lose the race. What is it that is wrong with Vancouver?

BOBBY RAHAL: Well, I think they made great strides in the last year. Probably the low point was two years ago, I suppose. The difficulty in Vancouver has always been that the area, the venue is in constant construction mode and it is difficult for the fans; it is difficult for the teams to navigate all of that, you know, it is just -- it is a difficult situation. That is not to say that it is not a great event. I think Vancouver is the northwest version of Long Beach or the western version of Toronto in a sense that it's got all the flavor of a street fair -- real -- it is really one of our jewels in terms of the excitement that is able to be generated within a metropolitan venue. Having said that, you know, several years ago there was a big problem where the hospitality was, things like, that, but Molson and Molstar fixed most of that. The reality is -- the problem with, as I say, is because it is always -- there is so much construction going on around there; the track changes, seems almost yearly, and you just never quite know what you have got as a sanctioning body from year to year because of that construction. So that is just what makes it difficult. I think everybody truly enjoys going to Vancouver for the event and so it is just a matter of trying to get the facilities to get some permanence to it and if we can do that, I see no reason why you wouldn't want to keep coming back.

Q. I know they are trying to extend the contract which runs out after 2001. At the same time, CART is looking at New York, Atlantic, Boston, San Francisco. I guess are you looking to getting away from ovals and more into streets or --

BOBBY RAHAL: I don't think -- I personally feel that if you look at our success stories there is no question that the ones that are -- our permanent road racing circuits Mid-Ohio, Elkhart places like that do very, very well. Let's face it, our street -- our metropolitan venues - and I hate to say street circuits because Milwaukee and Chicago are ovals but because they are in the metropolitan area, they are very successful events. There is no doubt that there is a formula that works by bringing racing to people; rather than relying on people to go to the racing. So I don't think we are against ovals. I don't think we are promoting road courses over ovals or ovals over road courses frankly, it is the market that is the most important thing and the actual specification of the circuit, I am not going to say it is irrelevant, but it is an important factor, but not-but not maybe the most important factor.

Q. Do you have a horsepower number in mind for next year?

BOBBY RAHAL: Not specifically. I mean, I do think that you know, we have -- you know, obviously I am not sure what exact horsepower figures are, nobody will tell me, obviously. But we have a pretty good idea and I think we have to be looking at minimally 150 horsepower, maybe even up to 200 horsepower reduction.

Q. Do you believe that through inlets or exhaust that might be achievable?

BOBBY RAHAL: Oh, yeah, if you can't get air, you can't make power.

Q. On a separate subject, do you think there is any feeling among the board to expand beyond 20 races for next year?

BOBBY RAHAL: I feel that -- I feel much of the franchise owners, the teams themselves, I think they understand that we have an obligation to grow the company. We have an obligation to satisfy our fans' needs for more races, for, you know, to be out in the public more often. It is up to us as a sanctioning body to figure out how to do that and do it responsibly for the teams. But I think everyone is very clear and they understand very well that we have an obligation to our shareholders to grow this company which means replacing weak markets with strong markets and adding races.

Q. I wanted to know what it was like for you standing on the sidelines this weekend at Detroit basically during the race not being involved with race strategy?

BOBBY RAHAL: Just showed you how good I was because they had one of the best races of the year without me, so it was obviously different. It was difficult -- it was a little bit odd not to be sitting there talking to Max. I have to thank the team and Max in particular, you know, this was kind of -- it was a surprise to all of us, but everybody performed beautifully and I am just very proud of my team, Scott Roembke is my right-hand man and Larry, our team manager, all the guys, engineers, everybody, they just -- it was seamless, as they say, which is a popular word these days. And I think that they understand that -- the role that I have been asked to fulfill here and they understand that maybe there is a chance I can help and I think they are willing to participate by allowing me to not be in the pits come race day. So while it was a little odd for me to be there, I felt I was in the right place.

Q. I don't think it is any coincidence that IRL said last week they weren't going to put up a schedule for a couple weeks. After Detroit they hurriedly called a press conference, throw a schedule out there, even though it is not finalized yet. It appears-- you were one of leaders in trying to get this thing reconciled last year. It appears that the guys over there are going to continue to play hardball. What kind of concessions do you think that you guys might have to make to bring this thing together or do you think that they would-that they would concede some things as well? I know it is awfully early in the process to be --

BOBBY RAHAL: Really is, for me, because obviously the situation I am in now, as I said earlier, we are certainly ready to sit down and figure out how to get it done. I definitely feel that Tony and the IRL, I think he is very happy having his series and, you know, I see no signs that they are -- I see no change in their thinking, I should say I guess probably the best thing -- best way to put it. As I said, that is not to say we are not going to always be ready to sit down. I think what we have to do, as we have said all along, is while we do that on the one hand; on the other hand, we have to continue to build our series and do the things that are going to create the value that are going to keep our sponsors happy, our fans happy, you know, all the various constituencies that we have satisfied with the show we are putting on. If we continue doing that, we will be okay. So as I say, we are ready to sit down but at the same token, we are going to do everything we can to build our series to the place it can be.

Q. Real quick, your thoughts -- you have been a part of the Board of Directors and have dealt with this already, your thoughts on Gerry Forsythe and his wanting a third team and wanting a third franchise and how that all shakes out?

BOBBY RAHAL: Well, I think -- I understand Gerry's view or I understand why he would like to have a third franchise. Reality is no one has ever been able to ever have a third franchise. That has never been an option. Having said that, the Board of Directors did recommend or at least act -- looked upon it favorably that if we can -- the rules of the franchises can be changed to accommodate something like that, why not. The reality was several months ago that the franchise board voted a change like that down. But that is not to say that that is not going to happen somewhere down the line either. Maybe that was Round 1 and we are going to be on to Round 2 shortly. But that is how that whole thing has come about and it will just take more discussions to see if the teams -- if the franchisees really do want to allow other members to have multiple franchises beyond the two that they are allowed now.

Q. Everyone has said at one time or another if I was running this company I'd do this or I'd do that. What would you like to see happen that is different or new concerning CART?

BOBBY RAHAL: Well, I think one of the predominant roles for me right now, and I kind of should have put this thinking later -- Forest's question about priority, what you have to do, I think one of the biggest things I have to do right now is strengthen our existing relationships between the sanctioning body and the promoters and the fans and the teams and what have you; grow new ones; restore ones that have been damaged. I have to tell you that I have sat down with a number of our sponsors of the series and to a person; not one of them has said if we don't get this thing done by such and such time, we are out. They have said, in fact, just the opposite, they have all sat there and said: We want to make this work. I found that to be very positive and very -- frankly, I was just happy about it because these, whether -- these major sponsors that we have, whether they are teams or whether it is FedEx or what have you, they believe in what we are trying to do and they want to participate in that process and I don't know if they have been allowed to participate in that before. So my job right now, I have done a lot. I have been in New York. I have been -- I have done a lot of travelling; done a lot of phone calls with our constituents telling them that there is a new vision here, a new feeling, and we are going to achieve our goals arm and arm with them because that is the only way we are going to achieve them. So if there is something different right now I suppose that is the message I am giving them.

Q. Have you had any contact at all with Tony or the IRL since you moved into your new position?

BOBBY RAHAL: I have not at this stage. We have tried but we have missed each other.

Q. I was wondering what do you think is going to happen with the Detroit Grand Prix? I hear this may be the last week -- maybe last year for it. There is some talk about moving it to Michigan State fairgrounds; the mayor is opposed; looks like it is kind of a mess there. Do you think there will be a race in Detroit next year?

BOBBY RAHAL: We will have one next year, yes. Our contract runs through next year and we fulfill our obligations. I did meet very briefly with Mayor Archer (ph) and I am going to meet with him again with Bud Stander (ph) from IMG. We are going to get together and talk and figure out what can be done; what is going to be done about the entire situation, whether it is at Belle Isle or at the fairgrounds or wherever but wherever it is, I think it is important for us to have an event in Detroit. I asked a lot of the executives of the automobile manufacturers, some of our sponsors there what they felt; I wanted to get, you know, get the pulse of the community and there is no doubt that they think being there is important. And I think-I have always thought it has been important because it is a motor city and obviously we have, there is an equity there that we need to continue to build. So we are going to see what happens. But certainly we will be at Belle Isle next year and we are going to do everything we can to ensure that we stay in the Detroit area beyond that.

Q. Do you feel the need to change anything about the ladder system? Other one would be: Do you feel the need to change the national makeup of the driver pool?

BOBBY RAHAL: From the ladder standpoint, we have a very Indy Lights program is a very good program; Formula Atlantic is very good. It is clear. It has been proven time and time again that if you want to get into a Champ Car, going through Indy Lights is probably the best way do achieve that. When you look at all the guys in Champ Car that came out of Lights, I think it is very clear that that is the case. Having said that, I don't know if we have really supported Indy Lights the way we should have over the years and it is my -- one of my goals is to embrace Indy Lights and even further and to really give it some teeth so that it becomes the obvious place; the obvious last stop before you get to a Champ Car. As far as the driver makeup, first off, I think it is a little bit of a coincidence that we are in the situation we are in now. I do believe we want to have as many Americans as possible. I don't know of anybody who doesn't believe that, but as Mario Andretti said, you know, at this level of the sport teams are going to hire whoever is capable of winning, pure and simple. As I have said -- as I have posed the question to some people, I think it is a pretty easy case to argue that the NHL is better today than what it was 25 years ago when it was mainly Canadians and Americans. I don't need to be coy or cute by comments like that. There is no doubt that we want to have young Americans and if you look in our series and if you look at the pipeline, there is no doubt that there is a lot of sharp young guys on the way up and they will be, I have no doubt, they will be in Champ Cars in the near future.

RON RICHARDS: Bobby, thank you. We will see you here in Troy soon. We hope to see many of the journalists that are on the line out in Portland this weekend. Thanks for joining us.

BOBBY RAHAL: Thank you, guys, I will look forward to talking to you any time.

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