- photo courtesy IMG
- After a summer of flip-flops, CART will be back.
It's no secret that merger mania is one of the hallmarks of this brave new economy: Exxon and Mobil. Viacom and Cablevision. British Petroleum and Amoco.
The merger bug is also dictating the future of the Cleveland Grand Prix, the annual Indy-style car race that takes place on the runways at Burke Lakefront Airport every summer. A merger between the two feuding race leagues, Championship Auto Racing Teams Inc. (CART) and Indy Racing League (IRL), has been the hidden force behind the curious series of announcements, backtracks, and flip-flops by some of Cleveland's biggest players over the past three months.
Though it was put on ice earlier this week, the on-again, off-again dalliance between CART and IRL has seemed a fait accompli, driving furious negotiations among the city, the two leagues, a federal agency, and one of Cleveland's biggest companies. The results were on display for all to see this summer, as the two key players behind the Cleveland Grand Prix -- Mayor Michael White and Bud Stanner, president of IMG Motorsports -- danced from the arms of CART to the welcoming embrace of IRL, only to wind up back with CART.
The CART-IRL feud goes back to 1994, when Tony George, president of the Indianapolis Motor Speedway (home of the Indy 500) and the IRL, started a series of races on other oval tracks using comparable cars and equipment. The competition fractured open-wheel racing. George got the Indy 500, several smaller, nondescript races, and a bunch of young, unknown drivers, while most of the big names in racing stayed with CART, albeit without the sport's signature event.
At this year's Cleveland Grand Prix -- a CART-sponsored race that backers claim pumps $25 million into the local economy -- Stanner was booed by fans reacting to rumors that IMG was considering dumping CART for IRL. IMG was reportedly making $1 million from the CART race, but observers say that profit margin was not worth the time and effort that went into organizing and promoting the event.
"It's not a matter of throwing up some barriers and some bleachers and saying, 'We're going racing.' It takes a lot of planning and organization, and there has been a decline in corporate involvement and the number of suites they were able to sell," says Ned Wicker, editor of Championship Racing Magazine. "Any time you're involved in a civic thing and don't own it, you're going to pay out a lot of money that normally you'd pay to yourself."
When CART decided to bump its sanctioning fee from $1.5 million this year to nearly $2 million next year and $2.2 million by 2002, IMG began talking with the inferior -- but cheaper -- IRL.
Stanner got what he wanted from the competing league: a three-year contract with annual sanctioning fees of about $1 million. That led to a surreal press conference, held at the Hard Rock Cafe in late June, where the principals tried to hype their second-rate product as a top-shelf alternative.
With White, Stanner, George, and racing legend A.J. Foyt (who owns an IRL team) sitting on the dais, the press conference quickly devolved into a session of "I'm OK, You're OK," like a script from one of Stuart Smalley's "Daily Affirmations." Stanner praised White's commitment to racing, White praised Stanner and IMG for its commitment to its hometown, and everyone talked about how great an IRL race would be for the city.
Just one problem: The public wasn't buying.
"I think for sure everybody connected with this project -- meaning CART, IMG Motorsports, the city, and the IRL -- underestimated the CART fan base that exists in the city," Stanner admits now.
That, coupled with persistent rumors that the two leagues were close to reunifying, prompted White to push Stanner to mend fences with CART. And there was another factor. CART ran a 2.1-mile race on the existing runways, but an oval IRL race would require some modifications. According to Stanner, White was concerned that after making the necessary changes at Burke, CART and IRL would merge, and the money spent building a new track would be for nothing.
The new configuration provided a convenient alibi, since the Federal Aviation Administration would have to approve any modifications to the Burke runways. At the press conference in June, White discounted any potential snags with the FAA. "We have every reason to believe we will be successful," he said. "We see no red or yellow lights."
Both Stanner and Nancy Lesic, White's press secretary, say now that preliminary discussions between the city and the FAA did not go well. "We talked with people familiar with the FAA who said it would be a challenge," Lesic says. "It would be difficult to get changes and not affect airport operations."
But FAA officials say the changes at Burke could have been made if White so chose. "It's up to [the city] if they want to close their airport," says FAA spokesman Tony Molinaro. "It's up to them to determine what they want to do. They just let us know."
What White wanted was to get CART back. Stanner says talks with the FAA had barely begun before White broke them off and instructed IMG to strike a deal with CART. He sent Stanner a letter dated Sept. 3, informing him that the city was withholding its support of an IRL-sponsored race. "I agreed to seek FAA approval for an oval race track at Burke in exchange for better business terms resulting from IMG's direct cost savings with IRL," White wrote. "With this new information related to a pending merger, I cannot in the best interest of the community move forward with an IRL-sanctioned race."
Shortly thereafter, CART and IMG struck a new three-year deal to race in Cleveland. Terms of the deal were not disclosed, but one observer puts the figure at around $2 million -- CART's original asking price.
Perhaps the most intriguing aspect of all the behind-the-scenes maneuvering was the near-silence of IRL officials. They simply issued a four-paragraph press release expressing regret about logistical problems at Burke. Never mind that they had checked into logistical problems at Burke three months earlier.
IRL's conspicuous silence was interpreted as further proof of a pending merger. "I don't think it's a done deal, but it's going to happen. It's an obvious deal," Stanner said before George's recent statement declaring merger talks dead.
Nevertheless, when Burke is crammed with Cleveland-area executives watching the race on a corporate junket next July, they will likely be watching the best auto racers in the world. And Mayor White will have averted another crisis on his watch.
Mike Tobin can be reached at email@example.com.