Interesting thought isn’t it? Something I have pondered for some time.
When you think of any business not having competition it conjures up all sorts of negatives. Immediately you think of monopolies and all that they entail. Things like price fixing and rotten service come to mind.
When business has competition it has to adjust its prices to be in line with other like business. It has to innovate or it will loose out when others come out with new products and services. It has to provide services at least at the level of the competition or risk loosing out.
Can you think of any business today that does not have competition, I can’t! Why is that?
Perhaps it’s because there are enough customers to go around…..or are there?
Are the NFL, NBA or NHL monopolies? If we wanted to watch American football there is no other league is there? There used to be until they merged. Same thing happened in Basketball.
These are sports and we tend not to think of sports as businesses, but they are so why don’t they have competition. Perhaps if we looked at all sports as businesses then we would see that sports share customers among them just as similar brick and mortar business do.
Ok now that we have shown that sports are businesses let’s include racing. The sport of racing is a business. The sport shares customers among them…..sound familiar?
Why do the pundits of Open Wheel Racing continue to say that the split in OWR is bad for OWR? There have been two series for 10 years now. How is that bad? Didn’t we decide that competition is good for business and the customers? And isn’t the sport of racing a business?
You have to do what, to survive in business…..innovate, price and serve. Hmmm does anyone but me see this?
I think so and if there hadn’t been a split I would venture that OWR would not have been forced to examine itself and the result may have been….well disastrous for the sport.
As for having enough customers to go around I think racing will always have that. Granted NASCAR has the majority now but as long as there are good businessmen in OWR NASCAR will need to……innovate, price and serve to compete!
Think about it! Pundits can be wrong you know!
Robin Millers Champ Car Two Years In
Written by: Robin Miller Mexico City, Mexico – 11/8/2005
When a venture capitalist from Australia and a Chicago business maven out-bid Tony George for the assets to CART in January of 2004, three questions were immediately recycled throughout the racing fraternity.
1) Why didn't Kevin Kalkhoven and Gerald Forsythe simply let George have it so open wheel racing could be back under one roof?
2) Why would two very successful multi-millionaires buy a decomposing corpse?
3) Would this folly last one or two years before last rites were administered?
Well, Sunday afternoon the checkered flag fell on Champ Car's second season and now we pretty much know the answers to all three of those questions.
Sure, Champ Car is nowhere close to its heydays of the '90s but it's a dang sight healthier than anyone could have imagined two years ago.
Kalkhoven and Forsythe have not only kept the pilot light burning, they've stoked the series with new venues, invested in some traditional tracks, resuscitated Formula Atlantics and laid out a sensible economic plan for the future.
In the past 12 months:
a) They staged new races at San Jose and Edmonton, added Houston for 2006 and are working on Philadelphia.
b) Purchased the Long Beach Grand Prix and Molson at Toronto.
c) Rebooted the Atlantics with a much cheaper chassis/engine ($175,000), added more horsepower and $2 million to the '06 titlist towards a Champ Car ride in '07.
d) Reduced the car costs 35 percent for the new '07 Panoz car ($205,000 less electronics and $300,000 for a roller).
e) Left little doubt they're better equipped to deal with the real world than George. "If you'd have told me we'd have all this two years ago, I would have looked to the heavens and said: "Please God, make this dream come true,'" said Kalkhoven, who started out as a car owner in 2003 before jumping into the deep end. "I think we're a year ahead of where Gerry and I expected to be last January.
"But I think the key is that our owners have bonded together very well."
As mentioned, the car count needs to be increased by at least four, the television ratings still suck, there's no money flowing directly to the teams, American attendance is far from healthy across the board, a title sponsor is desperately needed and so are young American drivers.
"I don't think we'll have any new teams next year because there are so few Lolas around but I think 2007 will be a different story," continued Kalkhoven. "We will have new teams in 2007, I'm sure of it.
"We'll have more national TV races next year and do some special shows to promote our drivers. Our Atlantic package should help our American driver situation and we've had people working diligently on a title sponsor for the past six months.
"Are we satisfied with everything? Of course not. But we've got a plan and its working."
Despite the highly successful and competitive debut at Edmonton, Champ Car's real coup in '05 was keeping Long Beach, Toronto and Montreal on its schedule and off the Indy Racing League's. Kalkhoven claims he doesn't pay any attention to the rival circuit but he and his partner have been forced to defend their castle at least three or four times.
Even though the IRL/IMS spin doctors deny any attempts at making a pitch for Long Beach, Toronto and Montreal, George told potential and current sponsors that the IRL would be at Long Beach in 2006. Michael Andretti guaranteed his new favorite series would be running Toronto in '06 and the IRL that it was going to slide into Montreal next year.
And Kalkhoven and Forsythe can say Long Beach and Toronto were good investments, but they were also must-saves. "Some are good business decisions and some are strategic business decisions," said Kalkhoven, who sounds like he's still contemplating litigation against the Montreal promoter and possibly the IRL for tortious interference with a contract.
"Yes, we definitely needed to keep Long Beach and Toronto and having the ability to control our assets is part of our strategy."
Keeping ovals (Milwaukee and Las Vegas) sounds more like a habit than a need.
"We'll evaluate them after next year but we're not going to do them if they're not successful," said Kalkhoven. "But why bother racing in front of 10 people? There's already a series that does that."
With no chance of unification, it appears that Champ Car and IRL will continue fighting each other for American and international recognition, as well as survival. Two years ago, the IRL had most of CART's big teams, both of its Japanese engine manufacturers and that big hammer Tony George says he brings to work every day.
But today the landscape has changed dramatically. Champ Car has the affordable series, the better American venues (except Indianapolis), a pretty slick business plan for the future and two guys who ain't broke or afraid.
"When Gerry and I took over we wanted to eliminate this concept that open wheel racing is over or dead, because it's not. Our strategy of a three-day festival is working and we've got some exciting things in the pipeline. Gerry and I also plan to be around for quite a while."
Then Kalkhoven grinned and said: "I've got a hammer too."
WickerBill sez;
Robin; Although I don't agree with all of your conclusions most are right on!
When a venture capitalist from Australia and a Chicago business maven out-bid Tony George for the assets to CART in January of 2004, three questions were immediately recycled throughout the racing fraternity.
1) Why didn't Kevin Kalkhoven and Gerald Forsythe simply let George have it so open wheel racing could be back under one roof?
2) Why would two very successful multi-millionaires buy a decomposing corpse?
3) Would this folly last one or two years before last rites were administered?
Well, Sunday afternoon the checkered flag fell on Champ Car's second season and now we pretty much know the answers to all three of those questions.
Sure, Champ Car is nowhere close to its heydays of the '90s but it's a dang sight healthier than anyone could have imagined two years ago.
Kalkhoven and Forsythe have not only kept the pilot light burning, they've stoked the series with new venues, invested in some traditional tracks, resuscitated Formula Atlantics and laid out a sensible economic plan for the future.
In the past 12 months:
a) They staged new races at San Jose and Edmonton, added Houston for 2006 and are working on Philadelphia.
b) Purchased the Long Beach Grand Prix and Molson at Toronto.
c) Rebooted the Atlantics with a much cheaper chassis/engine ($175,000), added more horsepower and $2 million to the '06 titlist towards a Champ Car ride in '07.
d) Reduced the car costs 35 percent for the new '07 Panoz car ($205,000 less electronics and $300,000 for a roller).
e) Left little doubt they're better equipped to deal with the real world than George. "If you'd have told me we'd have all this two years ago, I would have looked to the heavens and said: "Please God, make this dream come true,'" said Kalkhoven, who started out as a car owner in 2003 before jumping into the deep end. "I think we're a year ahead of where Gerry and I expected to be last January.
"But I think the key is that our owners have bonded together very well."
As mentioned, the car count needs to be increased by at least four, the television ratings still suck, there's no money flowing directly to the teams, American attendance is far from healthy across the board, a title sponsor is desperately needed and so are young American drivers.
"I don't think we'll have any new teams next year because there are so few Lolas around but I think 2007 will be a different story," continued Kalkhoven. "We will have new teams in 2007, I'm sure of it.
"We'll have more national TV races next year and do some special shows to promote our drivers. Our Atlantic package should help our American driver situation and we've had people working diligently on a title sponsor for the past six months.
"Are we satisfied with everything? Of course not. But we've got a plan and its working."
Despite the highly successful and competitive debut at Edmonton, Champ Car's real coup in '05 was keeping Long Beach, Toronto and Montreal on its schedule and off the Indy Racing League's. Kalkhoven claims he doesn't pay any attention to the rival circuit but he and his partner have been forced to defend their castle at least three or four times.
Even though the IRL/IMS spin doctors deny any attempts at making a pitch for Long Beach, Toronto and Montreal, George told potential and current sponsors that the IRL would be at Long Beach in 2006. Michael Andretti guaranteed his new favorite series would be running Toronto in '06 and the IRL that it was going to slide into Montreal next year.
And Kalkhoven and Forsythe can say Long Beach and Toronto were good investments, but they were also must-saves. "Some are good business decisions and some are strategic business decisions," said Kalkhoven, who sounds like he's still contemplating litigation against the Montreal promoter and possibly the IRL for tortious interference with a contract.
"Yes, we definitely needed to keep Long Beach and Toronto and having the ability to control our assets is part of our strategy."
Keeping ovals (Milwaukee and Las Vegas) sounds more like a habit than a need.
"We'll evaluate them after next year but we're not going to do them if they're not successful," said Kalkhoven. "But why bother racing in front of 10 people? There's already a series that does that."
With no chance of unification, it appears that Champ Car and IRL will continue fighting each other for American and international recognition, as well as survival. Two years ago, the IRL had most of CART's big teams, both of its Japanese engine manufacturers and that big hammer Tony George says he brings to work every day.
But today the landscape has changed dramatically. Champ Car has the affordable series, the better American venues (except Indianapolis), a pretty slick business plan for the future and two guys who ain't broke or afraid.
"When Gerry and I took over we wanted to eliminate this concept that open wheel racing is over or dead, because it's not. Our strategy of a three-day festival is working and we've got some exciting things in the pipeline. Gerry and I also plan to be around for quite a while."
Then Kalkhoven grinned and said: "I've got a hammer too."
WickerBill sez;
Robin; Although I don't agree with all of your conclusions most are right on!
Rusport 1-2 at Mexico City
Justin Wilson dominated the weeked winning the Grand Premio de Mexico at Autodromo Hermanos Rodriguez in Mexico city Sunday.
Wilson was never really headed after leading from the pole except for a brief period after the firstpit stop. A. J Allmendinger finished second even though Tracy nearly blocked him off the track earlier in the race. Tracy fininshed third after another self made day of frustration in typical Tracy style.
The season ending event was attended by 271,569 pushing the attendance per-event to a Champ Car record 150,679. The total attendance for the season was just shy of two million paying fans at 1,958,827.
WickerBill Sez;
Kudos to the new owners for turning this series around and giving us back our racing! There still are many issues to be resolved and deals to be cut but they are well on their way to the success they deserve. With the season now completed we can all look forward to the silly season to follow. Hopefully with the successes of this past year all of the participants will find the going a little smoother next year and perhaps the upcoming silly season won't be quite so silly!
Wilson was never really headed after leading from the pole except for a brief period after the firstpit stop. A. J Allmendinger finished second even though Tracy nearly blocked him off the track earlier in the race. Tracy fininshed third after another self made day of frustration in typical Tracy style.
The season ending event was attended by 271,569 pushing the attendance per-event to a Champ Car record 150,679. The total attendance for the season was just shy of two million paying fans at 1,958,827.
WickerBill Sez;
Kudos to the new owners for turning this series around and giving us back our racing! There still are many issues to be resolved and deals to be cut but they are well on their way to the success they deserve. With the season now completed we can all look forward to the silly season to follow. Hopefully with the successes of this past year all of the participants will find the going a little smoother next year and perhaps the upcoming silly season won't be quite so silly!
New Attendance Record at Surfers Paradise
Attendance for the Champ Car event at Surfers has been put at approximately 315,000, setting a record for Champ Car.
Attendance is calculated by adding up the number of attendees at each day of the event, meaning those that attend each day are counted multiple times and this in my opinion skews the actual total number higher than it really is. As long as the same technique is used for attendance at each event you can get a fair comparison event to event.
The attendance used to be estimated by Goodyear when they were still in the business and when they left an independent agency was contracted to do it. I don't know the technique used but some such agencies use crowd density to make their estimates.
WickerBill Sez;
I would like to see the attendance be a measure of how many different sets of eyeballs actually were there. Surely this information is available from the ticket sales information. Seems like you could count the ticket sales and arrive at total attendance, minus no shows. The attendance could be given for each day as before and would be more representative of the actual sets of eyeballs. Other numbers could be included in the total such as any freebees that might have been there.
No matter how it would be done I would prefer a more accurate accounting of the attendance
Attendance is calculated by adding up the number of attendees at each day of the event, meaning those that attend each day are counted multiple times and this in my opinion skews the actual total number higher than it really is. As long as the same technique is used for attendance at each event you can get a fair comparison event to event.
The attendance used to be estimated by Goodyear when they were still in the business and when they left an independent agency was contracted to do it. I don't know the technique used but some such agencies use crowd density to make their estimates.
WickerBill Sez;
I would like to see the attendance be a measure of how many different sets of eyeballs actually were there. Surely this information is available from the ticket sales information. Seems like you could count the ticket sales and arrive at total attendance, minus no shows. The attendance could be given for each day as before and would be more representative of the actual sets of eyeballs. Other numbers could be included in the total such as any freebees that might have been there.
No matter how it would be done I would prefer a more accurate accounting of the attendance
The Cosworth Spin
Originally posted in February 05 but still pertinent!
As the dust begins settling around the Cosworth deal and the reviews come in from the all of the racing pundits and more recognizable columnists perhaps it’s now time for a deeper dive into realm of Cosworth. I don’t think there is any question about the prime reason for Messrs Kalkhoven and Forsythe buying Cosworth. Hopefully they had enough advanced knowledge to put together a solid plan for the business. In any case there was almost no choice if the Champ car series was going to be saved from the rival IRL which reportedly sent one of its team owners to bid for the business. It did my heart good to hear Richard Parry-Jones, Group Vice President – Global Product Development and Chief Technical Officer, Ford Motor Company say they had worked very hard to secure a sale to a reputable buyer, and that Kevin and Gerry are very successful businessmen, with a long history in the sport and a clear vision for how they wish to take Cosworth forward. Implicitly this seems to suggest that the IRL and Mr. Ganassi didn’t have a plan or a clue, something which should come as no great surprise to anyone! With ownership of the critical engine supplier in the fold Champ Car is assured of living another day. Kudos to Kevin and Gerry.
But what about the downside of this deal? Can the Champ Car World Series really survive long term without the considerable infusion of money of a major automobile manufacturer? When I first heard of the possibility of Cosworth being purchased by two of the CCWS principles that was the second thing that went through my mind. The first was, wow that would be great, now we don’t have to worry about an engine supplier. Would it be possible for a series without some major automobile manufacturer sponsorship to survive long term? NASCAR and F1, two sanctioning bodies which have set the standard for racing business success, certainly embrace it. Even the NHRA runs things that claim to be of major automobile manufacturer origin, although they don’t look like it, and no doubt receive monetary support as a result. I wonder if the owners have some long term plan up their collective sleeves, that business model they constantly refer to, which does not include the infusion of automobile manufacturer money. What a coup that would be!
The point is this; I doubt there could ever be a successful racing series without the direct support of some major automobile manufacturer. Conversely the manufacturers want to be involved in a successful racing series because racing on Sunday sells cars on Monday. Since our beloved Champ cars bear little resemblance to anything that can be seen on the street the significant way for the automobile manufacturer to participate is by becoming an engine supplier. It isn’t clear to me if Ford will continue its support of the series in any way next year and beyond. Surely the Ford badge will no longer be a part of the engine supplied to the Champ cars. This seems to leave the series without any significant major automobile manufacturer involvement or at the very least, a declining involvement. If automobile manufacturer support of the series is as critical as I think it is then getting some other engine suppliers would seem to be a top priority of the series. How eager are the two series owners, that also own the engine business, going to be to solicit other engine suppliers to the series. Wouldn’t that be like inviting your competition to take some of your business? Could of a conflict of interest be looming here? Of course, but I don’t think it will happen. The new owners are going to do whatever it takes to assure continuation of the series including encouraging automobile manufacturers’ participation the series. After all, the team owners need all the sponsorship money they can get. And without teams there is no series.
The IRL is now facing the real possibility of loosing engine suppliers at the end of the 2006 season. This was likely the driving force behind the purported attempt to have Mr. Ganassi appear as a buyer of Cosworth. Since that ploy failed (does anyone believe Mr. Ganassi needed Cosworth for his NASCAR effort – I don’t think so) the IRL has announced engine changes are in the works, which seems to confirm their concern over Toyota and Honda leaving. Although no decision has yet been made they are talking of going back to production based engines. If that happens there will be a few good drivers available, i.e. those whose pay is subsidized by Honda and Toyota. There might even be a team or two wanting to come back Champ car. I know a lot of Champ Car fanatics that would prefer certain teams never come back. Is it possible that Kevin and Gerry have been able to see the future well enough to predict the demise of the IRL simply by owing Cosworth? Perhaps there is no downside to this after all.
As the dust begins settling around the Cosworth deal and the reviews come in from the all of the racing pundits and more recognizable columnists perhaps it’s now time for a deeper dive into realm of Cosworth. I don’t think there is any question about the prime reason for Messrs Kalkhoven and Forsythe buying Cosworth. Hopefully they had enough advanced knowledge to put together a solid plan for the business. In any case there was almost no choice if the Champ car series was going to be saved from the rival IRL which reportedly sent one of its team owners to bid for the business. It did my heart good to hear Richard Parry-Jones, Group Vice President – Global Product Development and Chief Technical Officer, Ford Motor Company say they had worked very hard to secure a sale to a reputable buyer, and that Kevin and Gerry are very successful businessmen, with a long history in the sport and a clear vision for how they wish to take Cosworth forward. Implicitly this seems to suggest that the IRL and Mr. Ganassi didn’t have a plan or a clue, something which should come as no great surprise to anyone! With ownership of the critical engine supplier in the fold Champ Car is assured of living another day. Kudos to Kevin and Gerry.
But what about the downside of this deal? Can the Champ Car World Series really survive long term without the considerable infusion of money of a major automobile manufacturer? When I first heard of the possibility of Cosworth being purchased by two of the CCWS principles that was the second thing that went through my mind. The first was, wow that would be great, now we don’t have to worry about an engine supplier. Would it be possible for a series without some major automobile manufacturer sponsorship to survive long term? NASCAR and F1, two sanctioning bodies which have set the standard for racing business success, certainly embrace it. Even the NHRA runs things that claim to be of major automobile manufacturer origin, although they don’t look like it, and no doubt receive monetary support as a result. I wonder if the owners have some long term plan up their collective sleeves, that business model they constantly refer to, which does not include the infusion of automobile manufacturer money. What a coup that would be!
The point is this; I doubt there could ever be a successful racing series without the direct support of some major automobile manufacturer. Conversely the manufacturers want to be involved in a successful racing series because racing on Sunday sells cars on Monday. Since our beloved Champ cars bear little resemblance to anything that can be seen on the street the significant way for the automobile manufacturer to participate is by becoming an engine supplier. It isn’t clear to me if Ford will continue its support of the series in any way next year and beyond. Surely the Ford badge will no longer be a part of the engine supplied to the Champ cars. This seems to leave the series without any significant major automobile manufacturer involvement or at the very least, a declining involvement. If automobile manufacturer support of the series is as critical as I think it is then getting some other engine suppliers would seem to be a top priority of the series. How eager are the two series owners, that also own the engine business, going to be to solicit other engine suppliers to the series. Wouldn’t that be like inviting your competition to take some of your business? Could of a conflict of interest be looming here? Of course, but I don’t think it will happen. The new owners are going to do whatever it takes to assure continuation of the series including encouraging automobile manufacturers’ participation the series. After all, the team owners need all the sponsorship money they can get. And without teams there is no series.
The IRL is now facing the real possibility of loosing engine suppliers at the end of the 2006 season. This was likely the driving force behind the purported attempt to have Mr. Ganassi appear as a buyer of Cosworth. Since that ploy failed (does anyone believe Mr. Ganassi needed Cosworth for his NASCAR effort – I don’t think so) the IRL has announced engine changes are in the works, which seems to confirm their concern over Toyota and Honda leaving. Although no decision has yet been made they are talking of going back to production based engines. If that happens there will be a few good drivers available, i.e. those whose pay is subsidized by Honda and Toyota. There might even be a team or two wanting to come back Champ car. I know a lot of Champ Car fanatics that would prefer certain teams never come back. Is it possible that Kevin and Gerry have been able to see the future well enough to predict the demise of the IRL simply by owing Cosworth? Perhaps there is no downside to this after all.
Ansan Cancelled
Well it's happened again Ansan has been cancelled...er deferred to 2006. The announcement was made by yesterday by CCWS only 2 short days after they announced that they were continuing with plans for this October’s race. In the press release they quote several obstacles having to do with promotions and fees.
WickerBill Sez;
If you read the bits of the press conference it's obvious that CCWS hasn't a clue about how to deal with the Asian business community. This is a very surprising turn of events for me as I thought KK was on top of everything. Now I can't help but wonder how many other problems have festering sores! I'll bet that China has serious issues as well. Look for some negative development on that front!
WickerBill Sez;
If you read the bits of the press conference it's obvious that CCWS hasn't a clue about how to deal with the Asian business community. This is a very surprising turn of events for me as I thought KK was on top of everything. Now I can't help but wonder how many other problems have festering sores! I'll bet that China has serious issues as well. Look for some negative development on that front!
Subscribe to:
Posts (Atom)