(by John Oreovicz espn.go.com 11-20-10)
Izod IndyCar Series teams will have a choice between three engine manufacturers in 2012 when the Lotus brand expands its involvement in American open-wheel competition.
Lotus, which is owned by the Proton Group of Malaysia, made the announcement Thursday at the Los Angeles International Auto Show. It is expected to partner with Cosworth Racing to create a turbocharged V-6 engine built to the IndyCar Series' new 2012 technical regulations.
Lotus joins Honda and Chevrolet as IndyCar's official engine suppliers for 2012 and beyond.
"Last March we learned really quick that the fans wanted the spec series to go away -- that was the number-one thing," IndyCar CEO Randy Bernard remarked. "Lotus is a renowned name in racing, with long associations with some of the greatest names in motorsports.
"I think the most exciting part for me is that Lotus has never run their own engine at [the] Indy 500."
Team Lotus was an official entrant in the Indianapolis 500 from 1963 to 1968, when its Formula 1-inspired cars pushed technical boundaries in the famous race. Jim Clark's victory in a Ford-powered Lotus in the 1965 Indy 500 was the first for a car using a rear-mounted engine. Clark also finished second at Indianapolis in 1964 and '66.
The last Lotus-built car to race at Indianapolis featured an aircraft-style turbine engine. Lotus unsuccessfully attempted to break into the CART-sanctioned Indy car series in the mid-1980s, and last year the iconic green and yellow Lotus colors appeared on Takuma Sato's IndyCar Series entry fielded by KV Racing Technology.
"This year we teamed up with KV Racing for IndyCar ,and we will significantly expand our participation in 2011," Lotus Group CEO Dany Bahar said. "In 2012, IndyCar competitors will have the opportunity to choose an Indy car with a Lotus engine and a Lotus body kit, immediately becoming part of the legacy that is Lotus."
Group Lotus has revealed ambitious plans to expand its production car lineup from three to five models, prototypes of which were on display at the Los Angeles show. Lotus hopes to expand its annual production from 2,400 cars to 8,000 by 2015.
Bahar, 38, is a former senior vice president of Ferrari, and he is the man Proton has installed to lead its $1.25 billion makeover of Lotus. While its future lineup won't go head-to-head with cars built by the legendary Italian firm, the image Behar is trying to build for Lotus -- including motorsports participation -- is clearly modeled on Ferrari.
"It's been quite a busy time, and hopefully we have more busy times ahead of us," Bahar said. "Our heritage is all about motor racing. Our road cars have significant connections with our motorsports programs.
"We take racing seriously, and we don't want to just put a sticker on a car. We want to fight with the big guys. We made the decision that this is where we want to be. We believe in the IndyCar Series and think it ties in with our strategy in the USA."
KVRT will serve as Lotus' lead team in the 2012 IndyCar Series. KVRT and Cosworth are co-owned by Kevin Kalkhoven.
Lotus revealed its intention to participate as a future IndyCar engine manufacturer right at the Nov. 16 deadline.
"We are excited about the future of Indy car racing with the addition of Chevrolet and Lotus, as well as the continued involvement of our longtime engine supplier Honda," Bernard said. "The Izod IndyCar Series has the fastest, most versatile cars and drivers in the world, and now we have engine competition to provide even more excitement to our fans."
In addition to having a choice of three competing engines for 2012, IndyCar teams could have as many as five alternative aerodynamic kits to select from. The deadline for announcing intention to build bodywork (which must be made available to all teams for $70,000) has not been established, but Chevrolet and Lotus already have committed.
IndyCar's Tony Cotman has been tasked with writing the 2012 rulebook.
"Obviously, regulating two engine manufacturers is more difficult than one and three is more difficult than two, but it doesn't keep multiplying," Cotman said. "Three is a healthy number to deal with in the first year. We have a good structure and plan in place, and we can handle it.
"Three manufacturers is probably more than anyone expected. I thought we would have two, and we added a third very late in the game."
Although Lotus will not deliver IndyCar the kind of marketing clout associated with mainstream brands like Honda and Chervrolet, the legendary sports car manufacturer brings its own cache.
"This is exciting news," said Erik Berkman, president of Honda Performance Development. "Lotus Cars has a long and distinguished record in motorsports and will add to the worldwide appeal of Indy car racing. Randy Bernard and the entire IndyCar Series staff returned multiple-manufacturer competition to Indy car racing following a lengthy absence, and we appreciate the efforts and dedication that helped make this possible.
"Along with last week's announcement that Chevrolet will join the series in 2012, the addition of Lotus is yet another indication of IndyCar's growing popularity."
Lost for the moment in the giddy euphoria of having manufacturer competition for the first time in many years is that IndyCar still has to get through one final season of competition with the same basic Dallara-Honda that has been in use since 2003.
"This is a good jump-start and a good, positive message that IndyCar is getting back on track," Cotman observed. "But in [Bernard]'s vision, multiple manufacturers are just part of a much bigger equation. He's still looking for more sponsors and a better impact on TV. It would be nice if it all came together at the same time."
Monday, November 22, 2010
Chevy back with IndyCar a big deal
(by John Oreovicz espn.go.com 11-14-10)
The sun was shining over Indianapolis Motor Speedway on Friday, both literally and figuratively.
On an unusually warm and pleasant mid-November morning, Roger Penske and a group of General Motors executives posed for pictures on the main straight with a handful of Indy car drivers from past and present. Their host was Izod IndyCar Series CEO Randy Bernard, sporting an ear-to-ear grin.
Bernard had plenty to smile about. With more than a little bit of help from Penske, Bernard had presided over one of the most important business developments in recent American open-wheel racing history: the return of GM and its Chevrolet brand as engine suppliers to the IndyCar Series.
"I hope this weather is a sign of how good this contract is going to be," Bernard quipped.
There are many open-wheel fans who are hoping the same thing. But after almost 15 years of stormy weather, the skies over IndyCar really do seem to be clearing. In Bernard's first year on the job, the Indianapolis 500 was blessed with perfect weather for qualifying and the race, and a series of historic photo shoots promoting the 100th anniversary of the first Indianapolis 500 (set for May 29, 2011) throughout the autumn went off without a cloud in the sky.
The importance of the Chevrolet-to-IndyCar deal cannot be overstated.
When the IndyCar Series introduces its new chassis and turbo engine formula in 2012, it will feature technical competition for the first time since 2005, ending a widely lampooned period of spec-car racing that went wholly against the grain of the Indy 500's tradition of open innovation.
More importantly, the new competition for IndyCar stalwart Honda is a U.S. company, and an iconic one at that. The turbocharged "Heartbeat of America" could propel as much as half of the 2012 Indianapolis 500 field.
"This reinforces our legacy as an authentic American brand and reinforces our heritage of performance," said Chevrolet marketing vice president Chris Perry. "Auto racing produces some of the highest return on investment in any activity we conduct.
"Indianapolis Motor Speedway has been a proving ground for manufacturers since Louis Chevrolet, our co-founder, raced here in 1909," Perry added. "This is a natural fit for Chevrolet … this is where it all began."
Two of the targets of the ICONIC committee that laid the groundwork for IndyCar's 2012 formula were greater efficiency and increased relevance to road car technology. Those points were keys in attracting Chevrolet's participation.
Chevy's turbo V-6 will feature direct injection and be fueled by the same E-85 ethanol/gasoline mixture widely available across the country. IndyCar's Honda engines have run on 100 percent ethanol for the past three years.
Chevrolet's role in its first official era of Indy car participation from 1986 to 1993 was badging an engine designed and produced by Ilmor Engineering, a company co-owned by Penske. This time around, while Ilmor is again GM's partner, Chevy officials pledge to make a greater contribution.
"GM has become a recognized leader in implementing direct-injection technology in both four-cylinder and V-6 engines by leveraging knowledge already gained from racing," commented Tom Stephens, GM's vice chairman of Global Product Operations. "Building on this foundation, our new partnership with Ilmor will give us even more opportunities to accelerate our engine technology and expand and improve the DI technology for street cars."
The news of Chevrolet's return was welcomed by Honda -- which ironically, has contracted with Ilmor for the past five years to assist in rebuilding its engines that supply the full IndyCar field.
"We look forward to renewing our relationship with Chevrolet as competitors on the race track and giving the fans of open-wheel racing a spirited and challenging rivalry," stated Honda Performance Development president Erik Berkman.
The Chevy tie-up was sweet vindication for Bernard, the former leader of Pro Bull Riders who was greeted by skepticism when he was announced as IndyCar's CEO earlier this year.
"This is what we dreamed about back in March, when we started this process," Bernard said. "It's been so gratifying watching this all unfold through the ICONIC committee, and Mr. Penske has been such an important part of making this happen.
"I'm a new-timer to this sport, but if you look at history and what everyone involved in Indy car racing has said, they all wanted competition. This is the first step, and the fact that it's American, with a history here since 1909, we couldn't ask for anything better.
"If this hadn't happened, it would have been a very nerve-racking year next year. The fact that GM is stepping up to the plate is huge for this sport."
Though he maintained his usual stoic demeanor at the news conference, crafting Chevrolet's return to Indianapolis had to be deeply satisfying for Penske, who despite all his success in the industry, made his name as an Indy 500 winning car owner.
Penske has won the Indianapolis 500 a record 15 times.
"I live in Detroit -- I was just trying to do my job," Penske quipped.
"It's wonderful to see the sport on the up-rise, as we saw in 2010 with the Izod sponsorship and the increased car count," he added. "Our ability to bring in one of the Big Three manufacturers to compete at Indianapolis with Honda is terrific. Honda has been a terrific partner but has wanted competition, so to me, this is a win-win situation.
"This is a day that shows the 'New GM' is back in business."
And it was a day that showed that the new IndyCar is back in business. Indy Racing League founder Tony George, the man Bernard replaced after a revolt within the Hulman-George family over the past two years, was present at the Chevrolet announcement, but he stood stone-faced at the side, quietly watching the proceedings.
IndyCar still has much work to do to get back to the level of popularity it enjoyed in the 1990s, before George's formation of the IRL as an alternative to the existing CART-sanctioned Indy car series split the sport and caused so much long-term damage. Sponsorship is still lacking, there appears to be no American driver ready to become a regular race winner and championship contender, and television ratings remain dismal.
But under Randy Bernard's leadership, the future finally looks bright for Indy car racing. Sunny days like Friday at the Brickyard are clear evidence that IndyCar is on the comeback trail, and the 2012 season can't get here soon enough.
The sun was shining over Indianapolis Motor Speedway on Friday, both literally and figuratively.
On an unusually warm and pleasant mid-November morning, Roger Penske and a group of General Motors executives posed for pictures on the main straight with a handful of Indy car drivers from past and present. Their host was Izod IndyCar Series CEO Randy Bernard, sporting an ear-to-ear grin.
Bernard had plenty to smile about. With more than a little bit of help from Penske, Bernard had presided over one of the most important business developments in recent American open-wheel racing history: the return of GM and its Chevrolet brand as engine suppliers to the IndyCar Series.
"I hope this weather is a sign of how good this contract is going to be," Bernard quipped.
There are many open-wheel fans who are hoping the same thing. But after almost 15 years of stormy weather, the skies over IndyCar really do seem to be clearing. In Bernard's first year on the job, the Indianapolis 500 was blessed with perfect weather for qualifying and the race, and a series of historic photo shoots promoting the 100th anniversary of the first Indianapolis 500 (set for May 29, 2011) throughout the autumn went off without a cloud in the sky.
The importance of the Chevrolet-to-IndyCar deal cannot be overstated.
When the IndyCar Series introduces its new chassis and turbo engine formula in 2012, it will feature technical competition for the first time since 2005, ending a widely lampooned period of spec-car racing that went wholly against the grain of the Indy 500's tradition of open innovation.
More importantly, the new competition for IndyCar stalwart Honda is a U.S. company, and an iconic one at that. The turbocharged "Heartbeat of America" could propel as much as half of the 2012 Indianapolis 500 field.
"This reinforces our legacy as an authentic American brand and reinforces our heritage of performance," said Chevrolet marketing vice president Chris Perry. "Auto racing produces some of the highest return on investment in any activity we conduct.
"Indianapolis Motor Speedway has been a proving ground for manufacturers since Louis Chevrolet, our co-founder, raced here in 1909," Perry added. "This is a natural fit for Chevrolet … this is where it all began."
Two of the targets of the ICONIC committee that laid the groundwork for IndyCar's 2012 formula were greater efficiency and increased relevance to road car technology. Those points were keys in attracting Chevrolet's participation.
Chevy's turbo V-6 will feature direct injection and be fueled by the same E-85 ethanol/gasoline mixture widely available across the country. IndyCar's Honda engines have run on 100 percent ethanol for the past three years.
Chevrolet's role in its first official era of Indy car participation from 1986 to 1993 was badging an engine designed and produced by Ilmor Engineering, a company co-owned by Penske. This time around, while Ilmor is again GM's partner, Chevy officials pledge to make a greater contribution.
"GM has become a recognized leader in implementing direct-injection technology in both four-cylinder and V-6 engines by leveraging knowledge already gained from racing," commented Tom Stephens, GM's vice chairman of Global Product Operations. "Building on this foundation, our new partnership with Ilmor will give us even more opportunities to accelerate our engine technology and expand and improve the DI technology for street cars."
The news of Chevrolet's return was welcomed by Honda -- which ironically, has contracted with Ilmor for the past five years to assist in rebuilding its engines that supply the full IndyCar field.
"We look forward to renewing our relationship with Chevrolet as competitors on the race track and giving the fans of open-wheel racing a spirited and challenging rivalry," stated Honda Performance Development president Erik Berkman.
The Chevy tie-up was sweet vindication for Bernard, the former leader of Pro Bull Riders who was greeted by skepticism when he was announced as IndyCar's CEO earlier this year.
"This is what we dreamed about back in March, when we started this process," Bernard said. "It's been so gratifying watching this all unfold through the ICONIC committee, and Mr. Penske has been such an important part of making this happen.
"I'm a new-timer to this sport, but if you look at history and what everyone involved in Indy car racing has said, they all wanted competition. This is the first step, and the fact that it's American, with a history here since 1909, we couldn't ask for anything better.
"If this hadn't happened, it would have been a very nerve-racking year next year. The fact that GM is stepping up to the plate is huge for this sport."
Though he maintained his usual stoic demeanor at the news conference, crafting Chevrolet's return to Indianapolis had to be deeply satisfying for Penske, who despite all his success in the industry, made his name as an Indy 500 winning car owner.
Penske has won the Indianapolis 500 a record 15 times.
"I live in Detroit -- I was just trying to do my job," Penske quipped.
"It's wonderful to see the sport on the up-rise, as we saw in 2010 with the Izod sponsorship and the increased car count," he added. "Our ability to bring in one of the Big Three manufacturers to compete at Indianapolis with Honda is terrific. Honda has been a terrific partner but has wanted competition, so to me, this is a win-win situation.
"This is a day that shows the 'New GM' is back in business."
And it was a day that showed that the new IndyCar is back in business. Indy Racing League founder Tony George, the man Bernard replaced after a revolt within the Hulman-George family over the past two years, was present at the Chevrolet announcement, but he stood stone-faced at the side, quietly watching the proceedings.
IndyCar still has much work to do to get back to the level of popularity it enjoyed in the 1990s, before George's formation of the IRL as an alternative to the existing CART-sanctioned Indy car series split the sport and caused so much long-term damage. Sponsorship is still lacking, there appears to be no American driver ready to become a regular race winner and championship contender, and television ratings remain dismal.
But under Randy Bernard's leadership, the future finally looks bright for Indy car racing. Sunny days like Friday at the Brickyard are clear evidence that IndyCar is on the comeback trail, and the 2012 season can't get here soon enough.
Penske key to Chevrolet return
(by Matt Beer autosport.com 11-12-10)
Roger Penske has revealed that he made the first approach to entice Chevrolet back to the IndyCar Series.
Penske was announced as the first team to commit to Chevrolet power in today's press conference to confirm that General Motors would be back in top-level American single-seater racing from 2012, after a six-year absence.
The engines will be constructed in collaboration with Ilmor Engineering, a company which Penske is a shareholder in. The legendary IndyCar team boss said his initial consideration had been to find a new opportunity for Ilmor after its most recent IndyCar partner Honda chose not to use the company for its 2012 engine.
"Ilmor was the team to partner with Honda to build the current racing engine," Penske explained. "Honda made the decision going into 2012 that if there was going to be a new engine they wanted to do that on their own and not utilise Ilmor, so at that point, being a shareholder of Ilmor, I said let's go out and look for a world-class manufacturer that might be interested in partnering with Ilmor from a technical standpoint and a support standpoint.
"We went around to various manufacturers, and Chevrolet showed some interest. They were interested in understanding the rules, and the committee got together with them.
"My role was to introduce Ilmor to General Motors once again, and we've had success with them, and, obviously, committing to running the engine again in our cars over the next several years."
Penske emphasised that despite his role in putting the Chevrolet deal together, his team would not be considered a 'works' outfit.
"That doesn't mean that other teams won't have the same opportunity," he said.
"Ilmor and Chevrolet will design the engine. I'll get an engine just like everyone else does. It's the same as it's been with Honda. [Ilmor] rebuilt this year at least 20 engines that were in the field every weekend. It will be the same transparency that it has been.
"We just decided that we could help the series, and we had a couple [of] hundred people that needed the jobs. So there was real incentive for us to see Ilmor survive and be in the business, and what a great partner we've found."
Roger Penske has revealed that he made the first approach to entice Chevrolet back to the IndyCar Series.
Penske was announced as the first team to commit to Chevrolet power in today's press conference to confirm that General Motors would be back in top-level American single-seater racing from 2012, after a six-year absence.
The engines will be constructed in collaboration with Ilmor Engineering, a company which Penske is a shareholder in. The legendary IndyCar team boss said his initial consideration had been to find a new opportunity for Ilmor after its most recent IndyCar partner Honda chose not to use the company for its 2012 engine.
"Ilmor was the team to partner with Honda to build the current racing engine," Penske explained. "Honda made the decision going into 2012 that if there was going to be a new engine they wanted to do that on their own and not utilise Ilmor, so at that point, being a shareholder of Ilmor, I said let's go out and look for a world-class manufacturer that might be interested in partnering with Ilmor from a technical standpoint and a support standpoint.
"We went around to various manufacturers, and Chevrolet showed some interest. They were interested in understanding the rules, and the committee got together with them.
"My role was to introduce Ilmor to General Motors once again, and we've had success with them, and, obviously, committing to running the engine again in our cars over the next several years."
Penske emphasised that despite his role in putting the Chevrolet deal together, his team would not be considered a 'works' outfit.
"That doesn't mean that other teams won't have the same opportunity," he said.
"Ilmor and Chevrolet will design the engine. I'll get an engine just like everyone else does. It's the same as it's been with Honda. [Ilmor] rebuilt this year at least 20 engines that were in the field every weekend. It will be the same transparency that it has been.
"We just decided that we could help the series, and we had a couple [of] hundred people that needed the jobs. So there was real incentive for us to see Ilmor survive and be in the business, and what a great partner we've found."
City has been spinning its wheels on Indy too long
(by Paula Simons edmontonjournal.com 11-4-10)
Goodbye, Edmonton Indy. Goodbye, Indy Racing League. Forgive me if I don't shed too many tears as you race off into the sunset.
Forgive me if I don't condemn the city for blowing a deal with Octane Management to run the Indy here next year.
The city wanted to move the race from the west side of the City Centre Airport lands to the east side, because it has closed the eastern runway and it needs the western runway to keep the airport operational during the race. Lorna Rosen, Edmonton's chief financial officer, says the city thought the move would be better and cheaper for Octane.
Octane says it was blindsided by the decision to move the track. It wanted the city to pay for the $3.2 million extra it says it would cost to create a premium track on the new site. That's on top of the $7 million in "sponsorship" and services the city had already promised to provide Octane over the next three years.
Rosen says that without city council authorization to spend the extra $3.2 million, she had no choice but to walk away from negotiations.
Now, it's certainly arguable that city council set up the deal to fail by giving Rosen such limited bargaining power. Certainly, if councillors had been hell-bent on saving the race at all costs, they would have handled things differently. And there undoubtedly are some people who'll argue that the loss of the Indy proves that shutting the airport is a bad idea.
But let's be clear. This isn't about the airport. It's about the cash.
The "privilege" of hosting this race has cost taxpayers dearly.
In its first two years, the Indy lost a total of $9.2 million. Every penny of that was backstopped by the city purse. Northlands and the city haven't finished calculating this year's losses, but Rosen says the city will likely be on the hook for at least $3 million more.
On top of that, the city provided the race with approximately $1.5 million in "services in kind" over the last three years, to pay for things like police and fire and transit.
Total bill? About $13.7 million. It doesn't end there.
Over the last three years, the Alberta government provided $1.2 million in Indy support -- $800,000 in 2010 alone. Ottawa also got into the act. The Harper government provided Indy with a grant of $810,000.
That's some $16 million in public funds to date -- to subsidize an international pro sports event -- with Octane holding out its hand for $10.2 million more from the city.
And what exactly did we, the public, get for our money?
The Indy Racing League won't allow the release of attendance figures, so it's impossible to know how many people actually bought tickets to this year's event. But Coun. Kim Krushell says attendance was down, and few were tourists.
"Ticket sales have been declining and they were down again, obviously, this year.
"Our citizens weren't buying tickets, and tourists weren't buying tickets either," says Krushell.
"From what I could see, the tickets were from the region and from Edmonton, not international."
Certainly, the Indy didn't seem to jazz the city the way an event like the Canadian Finals Rodeo does. When the CFR kicks off, the downtown, Whyte Avenue and West Edmonton Mall will bustle with tourists filling hotel rooms and restaurants and bars and stores. Grey Cup, later this month, will work the same magic. Indy never seemed to bring Edmonton the same kind of business, or party spirit.
Did the race raise our international profile? Did it convince more people to travel, invest or move here? That's also hard to say.
In its first year, the race was carried on both ESPN, a premium sports cable channel, and ESPN International. The second year, it was dropped by ESPN proper, and run instead on an obscure cable channel, VERSUS, as well as on ESPN International. This year, it was carried only by VERSUS.
How many people watched the race? And how many of those people noticed or cared that it took place in Edmonton? And how many, if any, changed their holiday or business plans as a result? The city says the international publicity was worth $80 million. Let's say I'm skeptical.
Now maybe Octane, with its racing industry experience, would have done a better job of marketing and promoting the event than Northlands has. Maybe Octane would have brought in the crowds, brought back TV coverage, made a profit.
But given the continued malaise of the U.S. economy, the impact of the strong Canadian dollar on American travellers, the continued fracturing of the TV audience, I'm not sure Octane could have made the race into a money-maker either. Certainly, the fact that negotiations broke down over a difference of roughly $3 million suggests that Octane knew it was working with a very slim margin, that it had to squeeze every penny to make its event viable.
And if the 2011 race had failed to make a profit? Krushell, for one, believes the requests for cash would have been never-ending.
"When does the buck stop for taxpayers? I didn't see the gravy train stopping any time soon," she says. "I think we would have been on the hook forever.
"This thing is a dog. If it smells like a dog, it's a dog. And this smells like a wet dog."
The way the city handled its dealings with Octane may not have been pretty. Breakups rarely are. But it's time to cut our losses. Time to put the dog out
Goodbye, Edmonton Indy. Goodbye, Indy Racing League. Forgive me if I don't shed too many tears as you race off into the sunset.
Forgive me if I don't condemn the city for blowing a deal with Octane Management to run the Indy here next year.
The city wanted to move the race from the west side of the City Centre Airport lands to the east side, because it has closed the eastern runway and it needs the western runway to keep the airport operational during the race. Lorna Rosen, Edmonton's chief financial officer, says the city thought the move would be better and cheaper for Octane.
Octane says it was blindsided by the decision to move the track. It wanted the city to pay for the $3.2 million extra it says it would cost to create a premium track on the new site. That's on top of the $7 million in "sponsorship" and services the city had already promised to provide Octane over the next three years.
Rosen says that without city council authorization to spend the extra $3.2 million, she had no choice but to walk away from negotiations.
Now, it's certainly arguable that city council set up the deal to fail by giving Rosen such limited bargaining power. Certainly, if councillors had been hell-bent on saving the race at all costs, they would have handled things differently. And there undoubtedly are some people who'll argue that the loss of the Indy proves that shutting the airport is a bad idea.
But let's be clear. This isn't about the airport. It's about the cash.
The "privilege" of hosting this race has cost taxpayers dearly.
In its first two years, the Indy lost a total of $9.2 million. Every penny of that was backstopped by the city purse. Northlands and the city haven't finished calculating this year's losses, but Rosen says the city will likely be on the hook for at least $3 million more.
On top of that, the city provided the race with approximately $1.5 million in "services in kind" over the last three years, to pay for things like police and fire and transit.
Total bill? About $13.7 million. It doesn't end there.
Over the last three years, the Alberta government provided $1.2 million in Indy support -- $800,000 in 2010 alone. Ottawa also got into the act. The Harper government provided Indy with a grant of $810,000.
That's some $16 million in public funds to date -- to subsidize an international pro sports event -- with Octane holding out its hand for $10.2 million more from the city.
And what exactly did we, the public, get for our money?
The Indy Racing League won't allow the release of attendance figures, so it's impossible to know how many people actually bought tickets to this year's event. But Coun. Kim Krushell says attendance was down, and few were tourists.
"Ticket sales have been declining and they were down again, obviously, this year.
"Our citizens weren't buying tickets, and tourists weren't buying tickets either," says Krushell.
"From what I could see, the tickets were from the region and from Edmonton, not international."
Certainly, the Indy didn't seem to jazz the city the way an event like the Canadian Finals Rodeo does. When the CFR kicks off, the downtown, Whyte Avenue and West Edmonton Mall will bustle with tourists filling hotel rooms and restaurants and bars and stores. Grey Cup, later this month, will work the same magic. Indy never seemed to bring Edmonton the same kind of business, or party spirit.
Did the race raise our international profile? Did it convince more people to travel, invest or move here? That's also hard to say.
In its first year, the race was carried on both ESPN, a premium sports cable channel, and ESPN International. The second year, it was dropped by ESPN proper, and run instead on an obscure cable channel, VERSUS, as well as on ESPN International. This year, it was carried only by VERSUS.
How many people watched the race? And how many of those people noticed or cared that it took place in Edmonton? And how many, if any, changed their holiday or business plans as a result? The city says the international publicity was worth $80 million. Let's say I'm skeptical.
Now maybe Octane, with its racing industry experience, would have done a better job of marketing and promoting the event than Northlands has. Maybe Octane would have brought in the crowds, brought back TV coverage, made a profit.
But given the continued malaise of the U.S. economy, the impact of the strong Canadian dollar on American travellers, the continued fracturing of the TV audience, I'm not sure Octane could have made the race into a money-maker either. Certainly, the fact that negotiations broke down over a difference of roughly $3 million suggests that Octane knew it was working with a very slim margin, that it had to squeeze every penny to make its event viable.
And if the 2011 race had failed to make a profit? Krushell, for one, believes the requests for cash would have been never-ending.
"When does the buck stop for taxpayers? I didn't see the gravy train stopping any time soon," she says. "I think we would have been on the hook forever.
"This thing is a dog. If it smells like a dog, it's a dog. And this smells like a wet dog."
The way the city handled its dealings with Octane may not have been pretty. Breakups rarely are. But it's time to cut our losses. Time to put the dog out
Saturday, November 6, 2010
IndyCar Series loses Edmonton race
(by John Oreovicz espn.go.com 11-3-10)
A prime block of real estate on the Izod IndyCar Series schedule has opened with the demise of the Grand Prix of Edmonton.
A dispute over who would pay for modifications to the unique track, laid out on the runways of Edmonton's City Centre Airport, is being blamed for the cancellation of the popular event, which was scheduled for the weekend of July 23-24.
It is unknown whether the IndyCar Series will try to stage a race somewhere other than Edmonton that weekend. If a replacement venue can't be found, there will be a four-week gap from July 10 to Aug. 7 during the heart of the IndyCar season.
"We are disappointed that the city and the promoter were unable to reach an agreement on the venue changes," IndyCar said in a prepared statement. "It's unfortunate that in a time when IndyCar is experiencing momentum and growth, the city would want to miss out on the opportunity to be part of it.
"We currently are examining options for our schedule to see if there are opportunities to replace the event."
The Edmonton race lost money in its first four years, triggering an outcry about government spending on the event. But the race's future seemed assured last year when a new promoter, Montreal-based Octane Motorsports Events, Inc., stepped in.
One of the airport's two main runways was closed as scheduled in August, clearing the way for the track to be reconfigured. But the city balked at contributing to the cost of paving the new configuration -- one that would allow the remaining runway to stay open during the Grand Prix weekend.
Octane's three-year contract called for the City of Edmonton to pitch in $5.5 million Canadian ($5.45 million in U.S. dollars) as a major sponsor of the event.
"I was told our promoters, who I have tremendous respect for, had the new track laid out and estimated the improvements required," IndyCar commercial division president Terry Angstadt said, according to the Edmonton Times. "I think it was maybe in the $2 million to $3 million range, and for the size and scope of an event like this one, nobody expected any pushback. But our promoter got a call and was told it was voted out."
Angstadt said the most frustrating part of the situation is that the IndyCar Series was never invited to participate in any of the discussions about the future of the event.
The Edmonton race started as a Champ Car World Series event in 2005 and was one of four Champ Car races merged into the IndyCar schedule.
"It is tremendously disappointing, particularly after the fanfare of welcoming Octane to the fold and having the press conference with the mayor," Angstadt said, according to the report. "Just in terms of the way it has happened, it doesn't make you feel terribly welcome. To have this come down and not receive a call is a little shocking."
Octane president Francois Dumontier also expressed disdain about how his company was treated in the negotiation process. He said Octane had set an Oct. 29 deadline for an answer from the city about the status of the track project.
"Until the last minute, we hoped that the city would agree with our legitimate request to provide us a site equivalent to the one the previous promoters have worked with, without having our group investing in groundworks," he said.
An anonymous source from Octane said the city was not interested in spending on new pavement at the airport, according to the Edmonton Sun.
"We worked out a track design and setup that we thought would work. It was obvious there would have to be some pavement put down on some areas of the track and more pavement on the lawn to set up a new paddock," the source said, according to the report. "They eventually told us they were only interested in using existing pavement and not spending any money to make the switch.
"We think we got caught in the stupid fight about the airport," the source said, according to the report.
One possible replacement for Edmonton is Watkins Glen International, which was left off the IndyCar calendar when the series was unable to come to financial terms for an extension. But the proximity of The Glen's annual NASCAR Sprint Cup race on the weekend of August 13-14 could be an issue complicating a return to the upstate New York track.
Another popular option would be Road America in Elkhart Lake, Wisc., an historic CART/Champ Car venue. However, the track's biggest event of the year -- the Kohler International Challenge vintage race -- is set for July 14-17. IndyCar could conceivably piggyback on Road America's American Le Mans Series event scheduled for August 18-20, but that would create a stretch of four races on consecutive weekends, including a cross-country jaunt to Infineon Raceway
A prime block of real estate on the Izod IndyCar Series schedule has opened with the demise of the Grand Prix of Edmonton.
A dispute over who would pay for modifications to the unique track, laid out on the runways of Edmonton's City Centre Airport, is being blamed for the cancellation of the popular event, which was scheduled for the weekend of July 23-24.
It is unknown whether the IndyCar Series will try to stage a race somewhere other than Edmonton that weekend. If a replacement venue can't be found, there will be a four-week gap from July 10 to Aug. 7 during the heart of the IndyCar season.
"We are disappointed that the city and the promoter were unable to reach an agreement on the venue changes," IndyCar said in a prepared statement. "It's unfortunate that in a time when IndyCar is experiencing momentum and growth, the city would want to miss out on the opportunity to be part of it.
"We currently are examining options for our schedule to see if there are opportunities to replace the event."
The Edmonton race lost money in its first four years, triggering an outcry about government spending on the event. But the race's future seemed assured last year when a new promoter, Montreal-based Octane Motorsports Events, Inc., stepped in.
One of the airport's two main runways was closed as scheduled in August, clearing the way for the track to be reconfigured. But the city balked at contributing to the cost of paving the new configuration -- one that would allow the remaining runway to stay open during the Grand Prix weekend.
Octane's three-year contract called for the City of Edmonton to pitch in $5.5 million Canadian ($5.45 million in U.S. dollars) as a major sponsor of the event.
"I was told our promoters, who I have tremendous respect for, had the new track laid out and estimated the improvements required," IndyCar commercial division president Terry Angstadt said, according to the Edmonton Times. "I think it was maybe in the $2 million to $3 million range, and for the size and scope of an event like this one, nobody expected any pushback. But our promoter got a call and was told it was voted out."
Angstadt said the most frustrating part of the situation is that the IndyCar Series was never invited to participate in any of the discussions about the future of the event.
The Edmonton race started as a Champ Car World Series event in 2005 and was one of four Champ Car races merged into the IndyCar schedule.
"It is tremendously disappointing, particularly after the fanfare of welcoming Octane to the fold and having the press conference with the mayor," Angstadt said, according to the report. "Just in terms of the way it has happened, it doesn't make you feel terribly welcome. To have this come down and not receive a call is a little shocking."
Octane president Francois Dumontier also expressed disdain about how his company was treated in the negotiation process. He said Octane had set an Oct. 29 deadline for an answer from the city about the status of the track project.
"Until the last minute, we hoped that the city would agree with our legitimate request to provide us a site equivalent to the one the previous promoters have worked with, without having our group investing in groundworks," he said.
An anonymous source from Octane said the city was not interested in spending on new pavement at the airport, according to the Edmonton Sun.
"We worked out a track design and setup that we thought would work. It was obvious there would have to be some pavement put down on some areas of the track and more pavement on the lawn to set up a new paddock," the source said, according to the report. "They eventually told us they were only interested in using existing pavement and not spending any money to make the switch.
"We think we got caught in the stupid fight about the airport," the source said, according to the report.
One possible replacement for Edmonton is Watkins Glen International, which was left off the IndyCar calendar when the series was unable to come to financial terms for an extension. But the proximity of The Glen's annual NASCAR Sprint Cup race on the weekend of August 13-14 could be an issue complicating a return to the upstate New York track.
Another popular option would be Road America in Elkhart Lake, Wisc., an historic CART/Champ Car venue. However, the track's biggest event of the year -- the Kohler International Challenge vintage race -- is set for July 14-17. IndyCar could conceivably piggyback on Road America's American Le Mans Series event scheduled for August 18-20, but that would create a stretch of four races on consecutive weekends, including a cross-country jaunt to Infineon Raceway
Grand Prix organizers miss deadline for stadium payment
(by Julie Scharper baltimoresun.com 10-27-10)
The organizers of the Baltimore Grand Prix race failed to make an $800,000 bond payment this month for a $1.9 million project to convert Camden Yards parking lots into a pit lane for race cars because, in part, of the group's limited cash flow.
The Maryland Stadium Authority has agreed to a new payment plan under which the racing group will pay $150,000 next week, with an additional $750,000 coming in two installments before the end of the year.
Mike Frenz, the authority's executive director, said the racing group asked for more time because it has "a variety of cash-flow needs."
"If they had attended only to ours, that's a lot of cash to tie up in an inefficient way," he said. The authority was amenable to the new payment plan because construction was delayed due to a change in the design for the pit area, he said.
Austin Crossley, a spokesman for the Baltimore Racing Development group, said the staggered payments free up cash for other costs.
"We are a startup business, and it is beneficial to put off these expenses as long as we reasonably can," he said.
The performance bond funds were to be deposited in an escrow account to guarantee payment for the extensive project — which includes uprooting trees and removing fences, curbs and light fixtures to clear an area for refueling, tire changes and repairs during the three-day racing festival scheduled for next Labor Day weekend.
The racing group has not secured a title sponsor for the inaugural festival and has not begun to sell tickets.
Event promoter Jay Davidson has said that tickets are to go on sale next month and that the group is close to completing negotiations with a corporate sponsor that would pay "in the low seven figures."
On Wednesday, Davidson announced that the group had completed sponsorship deals with five hotels near the race route.
Crossley said that the lack of a title sponsor and ticket revenue did not cause the group to miss the Oct. 1 deadline for the bond payment.
"The fact that we haven't announced a sponsor yet is not why we didn't make that payment," Crossley said. The racing group had not expected to receive a cash infusion from a title sponsor until November, he said.
Kaliope Parthemos, deputy mayor for economic development and a member of the stadium authority's board of directors, said that she was "confident it's going to be a successful race."
"It's the first time for them and the first time for the city to have an event like this," said Parthemos. "We anticipated a learning curve."
The city has pledged $7.75 million for roadwork in preparation for the race, including moving curbs and medians, and laying new concrete and asphalt. P. Flanigan & Sons was awarded a $4.2 million contract to work on the two-mile course.
The city's public works department has embarked on $750,000 project to replace and strengthen pipes under the course in an effort to prevent a water main break.
Work on the stadium, which is slated to begin early next month, will involve converting two parking lots along Conway Street into a pit area. The project involves installing stretches of concrete that the cars need for servicing; if tire changes were made on asphalt, jacks and other equipment could sink into the surface.
Many permanent structures — including a metal fence encircling the lot and a traffic circle — will be removed and replaced with objects that can be wheeled away when the race is under way, according Eric Johnson, project manager for the stadium authority.
Initial plans called for the pit area to be located on the west side of the stadium, near Russell Street, but a revised race route moved the pit to the east side, in front of the Babe Ruth Birthplace and Sports Legends Museums.
Race organizers have agreed to pay back the construction costs, and 12 percent interest, over five years, said Frenz, the stadium authority's executive director.
If the racing group is unable to pay the $900,000 by the end of the year, the stadium authority would "have to reconsider, up to and including stopping construction," he said. But he said authority officials had thoroughly reviewed the group's financial statements and were assured that the payments would be made.
"We're the ones putting up this money for the state, and it's our intention to get that money back," Frenz said.
The organizers of the Baltimore Grand Prix race failed to make an $800,000 bond payment this month for a $1.9 million project to convert Camden Yards parking lots into a pit lane for race cars because, in part, of the group's limited cash flow.
The Maryland Stadium Authority has agreed to a new payment plan under which the racing group will pay $150,000 next week, with an additional $750,000 coming in two installments before the end of the year.
Mike Frenz, the authority's executive director, said the racing group asked for more time because it has "a variety of cash-flow needs."
"If they had attended only to ours, that's a lot of cash to tie up in an inefficient way," he said. The authority was amenable to the new payment plan because construction was delayed due to a change in the design for the pit area, he said.
Austin Crossley, a spokesman for the Baltimore Racing Development group, said the staggered payments free up cash for other costs.
"We are a startup business, and it is beneficial to put off these expenses as long as we reasonably can," he said.
The performance bond funds were to be deposited in an escrow account to guarantee payment for the extensive project — which includes uprooting trees and removing fences, curbs and light fixtures to clear an area for refueling, tire changes and repairs during the three-day racing festival scheduled for next Labor Day weekend.
The racing group has not secured a title sponsor for the inaugural festival and has not begun to sell tickets.
Event promoter Jay Davidson has said that tickets are to go on sale next month and that the group is close to completing negotiations with a corporate sponsor that would pay "in the low seven figures."
On Wednesday, Davidson announced that the group had completed sponsorship deals with five hotels near the race route.
Crossley said that the lack of a title sponsor and ticket revenue did not cause the group to miss the Oct. 1 deadline for the bond payment.
"The fact that we haven't announced a sponsor yet is not why we didn't make that payment," Crossley said. The racing group had not expected to receive a cash infusion from a title sponsor until November, he said.
Kaliope Parthemos, deputy mayor for economic development and a member of the stadium authority's board of directors, said that she was "confident it's going to be a successful race."
"It's the first time for them and the first time for the city to have an event like this," said Parthemos. "We anticipated a learning curve."
The city has pledged $7.75 million for roadwork in preparation for the race, including moving curbs and medians, and laying new concrete and asphalt. P. Flanigan & Sons was awarded a $4.2 million contract to work on the two-mile course.
The city's public works department has embarked on $750,000 project to replace and strengthen pipes under the course in an effort to prevent a water main break.
Work on the stadium, which is slated to begin early next month, will involve converting two parking lots along Conway Street into a pit area. The project involves installing stretches of concrete that the cars need for servicing; if tire changes were made on asphalt, jacks and other equipment could sink into the surface.
Many permanent structures — including a metal fence encircling the lot and a traffic circle — will be removed and replaced with objects that can be wheeled away when the race is under way, according Eric Johnson, project manager for the stadium authority.
Initial plans called for the pit area to be located on the west side of the stadium, near Russell Street, but a revised race route moved the pit to the east side, in front of the Babe Ruth Birthplace and Sports Legends Museums.
Race organizers have agreed to pay back the construction costs, and 12 percent interest, over five years, said Frenz, the stadium authority's executive director.
If the racing group is unable to pay the $900,000 by the end of the year, the stadium authority would "have to reconsider, up to and including stopping construction," he said. But he said authority officials had thoroughly reviewed the group's financial statements and were assured that the payments would be made.
"We're the ones putting up this money for the state, and it's our intention to get that money back," Frenz said.
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