November 2, 2002
ADAM SAAL: We'll have Al Speyer of Bridgestone Motorsports and Chris Pook, CART president and CEO to join us up front. We want to make what's a very important, significant announcement from where we sit here at CART. It would be appropriate to ask Al to lift the lid on what's a great sponsorship announcement for CART.
AL SPEYER: Thank you, Adam. Good afternoon, everyone. This is another milestone for our company and a major announcement for us. I do want to reference a little bit of history here. Back 12 years ago, 1990, when our company didn't have any presence at all really in open-wheel racing, we got involved in sponsoring the Indy Lights championship. Chris Pook was a major part of that at the time. Also Mr. Pat Patrick was one of the founding forces of that series. That got us started. Adam, I think you did some of the PR work for that series. We've come a long way. We are extremely happy with our association with CART through those many years. We've enjoyed much success right here at Fontana. We're undefeated in 500-mile races. Some of that was against competition. Now we find ourselves as the sole supplier. Our overall long-term association with CART has been extremely beneficial for our company. Today I'm very pleased to announce that Bridgestone will assume the position of presenting sponsor for the CART Champ Car Series. We will be doing that based on a very comprehensive package that Chris Pook and his team have put together for us of many benefits. We will utilize that package to market our Bridgestone street tires, not just the racing tires. We will very much take a role to increase Bridgestone brand exposure, not only in the US domestic market, but worldwide. That's very important to us. We see great value in this sponsorship. We want the association to continue on into the future. With that, Chris, I'll let you make your comments.
CHRIS POOK: Thank you, Al. Obviously, for the Champ Car Series, it's very, very important, this announcement for us. The relationship with Bridgestone is a tremendous relationship. As you well know, they provide the shoes for all of our racing cars currently. What this relationship does now is take us to a retail activation level. Bridgestone has numerous retail stores throughout the country and throughout the many markets that we are in, particularly the major urban markets that we are in. This allows us to work hand-in-hand with our promoters and with Bridgestone to take our product one step further to the general public. Simultaneously, we will drive traffic into the Bridgestone stores, and we will sell the Bridgestone product, which is an excellent product. If you look at their market goals, the market they wish to go to, and if you look at the CART demographics, you see a remarkable alignment between the people who come to our races and who follow our series and the people who buy Bridgestone tires. The stars line up in that area, and that's very, very important when you're marketing a product, marketing tires, or marketing seats, for our promoters, all marketing your brand. This whole thing is very, very good for us. To have a company of the international status that Bridgestone brings to us to take the presenting sponsorship role I think speaks very well for our series. We're very, very proud of the relationship.
ADAM SAAL: I believe one of the gentleman you mentioned a moment ago is now with us.
AL SPEYER: I see Mr. Patrick was joined us now. I was explaining to everyone that we wouldn't be where we are today had it not been for you trusting and believing in our company way back in 1990 when you brought us into the Indy Lights championship. Through your efforts, Chris and many other people at CART, we've enjoyed that association for many years. We expect to continue that. I very much want to tell all of you how much we appreciate what the CART community as a whole has done for us. It really has been a win-win situation as far as we see it. We know it has helped us to promote and sell our company and our products and our tires. We would like to believe we helped the racing series in putting on great, safe races with dependable tires. Pat, Chris, everybody else in the room who has helped us, I want to thank all of you for your efforts on our behalf. That's one of the large reasons we are continuing on with our association with CART.
ADAM SAAL: Mr. Patrick, any comments? I know you didn't expect to speak.
PAT PATRICK: Thank you very much for those kind words. You can really thank Chris Pook for us being in the series. I screwed up the meeting the first day, but Chris went back and salvaged it (laughter). Anyway, he thanked me for doing all this work, all this stuff I've done for it. It's interesting, at the racetrack, I get the worst tires of the whole thing. My car is last today. That's about as far back as they could put me. Maybe next year, Al, can I get back on your list (laughter)? Seriously, I'm very happy to be associated with Firestone. Thank you.
ADAM SAAL: I think we all know he means Bridgestone/Firestone Company, that has been involved with us since 1991. We'll continue this as we head to the next phase. We'll open it up for questions for Chris or Al.
Q. One of the things that didn't come to fruition with FedEx was there were no national TV commercials. Honda spent the only money on that. Will part of the emphasis of this partnership be national television commercials? Is it more about commercial sponsors than cash? Can you talk about that?
AL SPEYER: Yes, absolutely. We are a market-driven company who sells a consumer product. Obviously, in our world of tires, tires are very important to the performance of any vehicle, most of all critically important to the performance of a racing car. We are going to market to the general public. We've already done some things this year with co-promotions. Our new association will have us with six commercials in every one of the CART races. That's an increase from four we had in each race this year. We have many other retail consumer promotions that we're talking about now. We've done some activities this year with the co-branded CART Firestone hat where we ran advertisements in local newspapers. Consumers could ultimately call an 800 number and have the hat shipped to their home. Obviously, we would like to get some store traffic of having them come in. It all generated extra exposure for our brand, our tires, and CART. I think you're going to see more of that in the future. The key is we do market to direct end-line consumers, many of those are racing fans that follow the series.
Q. Chris, what is the difference between a presenting sponsor and a series sponsor?
CHRIS POOK: Well, obviously positioning is clear. A presenting sponsor clearly is not going to be required to invest the same amount in fee, per se, into the series as a title sponsor would. I think what's important here, what we have to capitalize on here, is what Al says, the marketing and promotion. That's where a presenting sponsor provides huge, huge value for us. I think the fact that, as Al said, Bridgestone is a retail company, it sells to the public. We have to recognize the value of that, the value of that to our promoters, to our series, to our competitors. That is of huge, huge value. That's why one of the reasons we're so excited about this relationship. The fact that the company has been with the series so long, as Al said from its inception with Indy Lights, makes it a natural and logical marriage. Our responsibility, obviously, is at the end of the day to help them sell tires. That's what it's about. That's really at the end of the day what we've got to do. We have to deliver value to our client, Bridgestone. They will put value into the series. Our job is to make sure the activation works on a successful basis.
Q. Is there going to be a series sponsor?
CHRIS POOK: You always ask these interesting questions. I always give you an interesting answer. Obviously, we would love to have a series sponsor. We greatly appreciate the relationship with FedEx. But we will take one step at a time in this building block process. If the day arrives when we're sitting here talking to you about a series sponsor, I assure you Mr. Speyer and I will have had lots of conversations about that, and how that series sponsor fits into the equation of the presenting sponsor to make sure it's compatible and that we can get the two of them working together. Rather than have one and one make two, we want one and one to make three, four or five. That is the position we will take as a company.
Q. Why didn't you go for the title sponsorship?
AL SPEYER: Well, to answer that question, answer Mike's question, I'd like to remind you that a presenting sponsor comes first. That's very important to us, to be first in line. Our arrangement here has left the door open for CART to get a title sponsor, other associate sponsors, as they may be, and nothing in our arrangement precludes CART from getting other people. In fact, we would like them to have a full title sponsor, particularly a title sponsor that we could co-promote with, as well, to maximize our marketing efforts with those of any other title sponsor involved, and the series itself. Our commitment at this time is a significant one, and we would really like to work with CART to get all of the proper slices filled in that cue.
Q. There's been a projection that Ford would be the title sponsor. The realignment of Ford and Bridgestone/Firestone would be ironic, would it not?
AL SPEYER: I suppose you could look at it that way. I suppose that's a definite possibility. But the activity right now with CART is based on our company's and other companies' association with CART. It is not based on any other business operations. If that comes to be, that's fine with us. We'll look at it as a step in the right direction.
Q. Chris, does it make it easier or harder for you to sell that title sponsorship now that you have a presenting sponsor?
CHRIS POOK: I think it makes it a lot easier, absolutely, particularly a company of the stature of Bridgestone/Firestone. I mean, that's a huge, huge, huge step. One thing we've got to remember, folks, we are in the automotive business. In the automotive business, tires play a key role. They play a key role in the day-to-day life on the street. We need to remember that, recognize that. The fact that we are an extension of the day-to-day automobile business on the street, that we happen to do it on the racetrack, makes the relationship between ourselves and Bridgestone even more valuable from CART's point of view. I would respectfully suggest to you any company now looking at a relationship with this series would immediately see the value of this relationship between Bridgestone and CART.
Q. Al, what might Bridgestone do to raise awareness of the series, in this country and internationally?
AL SPEYER: Well, primarily our focus will be in the United States, North America, including Canada and Mexico. We rely heavily on our Bridgestone brand activity in Formula 1 for Europe and Asia for the most part. We will be doing television advertising, additional print advertising, and most importantly point-of-sale retail promotions tied in with CART and our sponsorship. That stretches across the country. The use of our corporate ID in the new logo that will be developed for the series, along with other identification elements, we will get with the series not only on-site at every event, but also on the television show Which is viewed worldwide, are all methods for us to increase exposure for Bridgestone brand.
Q. Chris, a difficult question, but being that CART owns the Atlantic Series, what will this do with regard to the Atlantic Series with regard to tires available and from where?
CHRIS POOK: Well, I think the Atlantic Series is separate from the Champ Car Series. We've positioned it separately, although it's an important feeder series. The Atlantic Series uses Yokohama tires. Al understands that well. If Yokohama decide they don't want to continue with us, I can tell you right now the first place I will turn to will be to Mr. Speyer to say, "Is there any interest by any other member of the Bridgestone/Firestone family in the series?" One should remember very carefully that the Bridgestone/Firestone through the Dayton brand made a huge investment in the Indy Lights Series. Quite candidly, the company's responsible for many of our drivers in the series, two of which I believe were before you a few minutes ago, as you talked to the top three, they came out of the Dayton Indy Lights Series, which is a division of Bridgestone/Firestone. We remember. We do business with our friends.
Q. Was it a tough sell with all the negative things that CART has had to deal with this year? If so, what was the key thing for you? The attendance at the races?
AL SPEYER: It was more difficult internally. Right now with the overall economic situation we all face, continuing investments in motorsports are always looked on with very a very fine-tooth comb that we have to go through. We have our eyes wide open in this. I think we have a very good sense of where CART's headed. We understand the situation right now. But we have to be careful for our own stockholders and everybody else about how we spend our money. So internally we looked at this probably as hard as we've looked at any involvement in motorsports that we've done in the past 10 years or so. However, in the end we see great strength in CART. We know there's going to be a changing of the guard, if you will. We're excited about some of the new young blood that's going to come in. We like to grow and build new series, get involved with new, energetic people. We very much see strength in the street circuit racing. The crowds that we have at many of the events, Long Beach of course is the one we reference many of us many times, but all of the events in Canada, still had a great crowd down in Australia, the Mexican events are very important to us. All of those tracks and those attendance figures we look at as being very, very strong for CART, very much the demographics, spectator and audience, we want to market our Bridgestone brand tires to.
Q. Might there be special tires for special teams? How long does it take your company to adapt to a demand for something new and different?
AL SPEYER: The only team that will get special tires will be Patrick Racing (laughter). We've already arranged that previous to this meeting. They're over at the truck, Pat. Better get there before everybody else does (laughter). In all seriousness, we don't even select the tires that go to the teams. CART has officials that come down and go through the truck, "This tire goes to this person, this tire goes to this person." We don't make any special tires for any teams, although some of the team would say very much like to have us do that. I forget the second part of the question.
Q. How long does it take to make something different if it's needed?
AL SPEYER: We can push something through probably in 60 to 90 days, maybe less if we absolutely have to. We don't like to. We like to plan much further out than that.
Q. Will this affect your sponsorship of the TransAm series?
AL SPEYER: No. I don't know that we have a sponsorship of the TransAm series. No, not at all. No change at all (laughter).
CHRIS POOK: It's a real fine day outside today.
Q. Do you have a time frame that you set out for this new agreement, announcement?
AL SPEYER: Right now we've signed on for 2003. As I sat here last year, we extended our agreement with CART for another year. We've done this again. No reason why it can't go beyond that. Right now it's an agreement for 2003.
Q. We'll be looking at this annually?
AL SPEYER: Yes. We expect Chris is going to be knocking on our door long before the end of next year to have us continue. I know he's going to work overtime with his complete staff to make sure we want to continue.
CHRIS POOK: Ubetcha.
Q. What does message does this send to future teams?
AL SPEYER: We certainly hope it's a positive message, a major corporation involved in the automotive industry is stepping up and increasing our presence with the series. We hope it has a positive effect. We're well aware of many discussions going on not only with series sponsors but individual team sponsors. We made our decision. We know what we're doing. That's why we're making the announcement today. We hope it has a positive effect on others who are considering participation.
Q. Was it kept to one year because CART may want to look at bringing in another tire to have some competition or do you like this arrangement of having sole supply?
AL SPEYER: It dovetails in. Right now making a commitment for more than a year for our company is very difficult financially. After all the internal discussions we've had, I'm very pleased we're able to make this commitment to continue next year. We very much would like to have competition in the tire category, but temporarily right now, based on our economic situation with the company and the fact that competition would cost considerably more for us at the current time, we like the fact that we've got another year of relative ease in the development and technology end, and then possibilities beyond that are still open. It's a very comfortable situation for us.
CHRIS POOK: If I could continue on that. You also need to recognize that we as a company have said that in 2005 we're going to have new engines, whole new appearance to this series. Those specifications will come out in the first three months of next year. I don't think it's reasonable to ask a company that makes a technical product for our series to commit without understanding what the future's going to hold for them. I think we have to understand that we've got to respect the engineering that goes into these tires and their ability to make decisions around that engineering of what we're going to look like.
Q. Will you be supplying just one compounded tire per race or doing like Formula 1 where team also have a choice of two compounds to create some disparity?
AL SPEYER: It will be one compound. We have talked about possibly making some softer tires closer to where we were when we had open competition. Whether or not that can actually improve the racing somewhat to allow for more passing, I think that's a debate right now. But it will be one specification for each race, with the possible exception we've already talked about a primary and an option, but that would be a rare case that we might test with CART just to see if it could improve the overall racing product. The default position is one specification, just as we've had this year.
Q. Where do you rank this development in your progress this year as a CEO?
CHRIS POOK: This is a significant development for us. I mean, I've talked about stability all year long, the importance to have stability. I think the fact we announced Ford-Cosworth in June at Portland, that was a stability issue. I think for us to continue with Bridgestone as our tires is another one of the building blocks to we're putting in place. That's the way I look at it. I look at it from the marketing side. If you look at it from the corporate side what I'm charged with the responsibility to do, I think this is a very significant building block that's been put in place. That's very important when you're restructuring a company and setting on a new course. These are the sort of things I believe you have to do. At least I think that's what my board wants me to do.
Q. The term Champ Car really hasn't caught on in the past four or five years. Al mentioned a logo change. Do you see that as an opportunity to possibly change the name of the series?
CHRIS POOK: Uhm.
AL SPEYER: Yes (laughter). Possibly.
CHRIS POOK: I'll have to say yes. It's going to change the name of the series with Bridgestone in the title, clearly. I would say to you that sometimes there's lots of reasons why brands don't catch on. A lot of the time it's because management hasn't paid enough attention to making the brand be known and recognized. I think that's one of the challenges before us. We will work with Bridgestone on this issue. They will participate with us as we reposition, if you will, redesign the brand. But I suspect you will see the name "Champ Car" in that brand name.
Q. What is it called at this moment? What's the full name?
CHRIS POOK: I appreciate the opportunity to scoop here, but I'm not going to.
ADAM SAAL: We remain the FedEx Championship Series through this season.
Q. Bridgestone presenting CART?
CHRIS POOK: Today we can tell you it's "Bridgestone Presents." I think that's the message we want to leave you with today. How we take the rest of the equation forward, that's something that might staff and Al's staff will work together on so we arrive at an answer that meets Bridgestone's objectives and meets the series' objectives.
AL SPEYER: There certainly was a part of our desire on Bridgestone's part to be able to all at once announce the complete title of whatever the new name will be. However, we felt it was more important to put our foot in, announce ourselves as the presenting sponsor, then work with Chris and CART, all of the other potential sponsors, to detail out the full name. It's not fully developed yet. We are very happy to be a part of it with CART.
ADAM SAAL: Those meetings have even gone on this weekend for several hours.
Q. You mentioned a key in the fact there are going to be a number of new teams, new personalities coming in. Are there thoughts, discussions about utilizing those personalities? In the past they've not been marketed so well in the series. With the huge number of outlets that Bridgestone has, are you going to be able to utilize the personalities that are in CART to help the fans get to know them better as well as improve your product sales?
AL SPEYER: We certainly want to do that. We do currently and will continue to use drivers for public appearances for us. Until we know who all those personalities are and exactly how they might fit in in different areas the country, we can't have a specific plan. But, yes, we will use the drivers. Other elements actually of our new arrangement with CART, we will also be utilizing the pace car drivers as spokes-people for us. They will be doing some of the women's car care type clinics that we have conducted across the country. It's another way we are dovetailing some of the activities we do at our retail locations with that of CART.
ADAM SAAL: Thanks for joining us today, Mr. Patrick. Gentlemen, congratulations again. Chris and Al, thank you.
AL SPEYER: Thank you.
CHRIS POOK: Thank you.
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