CHAMP CAR TELECONFERENCE TRANSCRIPT WITH STEVE JOHNSON, JIM FREUDENBERG AND RICHARD RAMIREZ
ERIC MAUK: Welcome, everyone, to a very exciting Champ Car media conference call where we are able to announce, as many of you saw earlier in the day, that the Vegas Grand Prix has reached an agreement with First Data Independent Sales of Fresno by Cardservice International, a worldwide processor for Visa credit cards, for a multi-year, multi-city title sponsorship that includes the 2007 season-opening Vegas Grand Prix, which will now be known as the Vegas Grand Prix Fueled by Visa. It will take place April 6th through the 8 in the streets of Las Vegas, the inaugural street race to be run in the Nevada city.
Today we are joined by the president and CEO of the Vegas Grand Prix Fueled by Visa, Jim Freudenberg. We are also joined by the president and CEO of First Data Independent Sales Fresno by Cardservice International, Mr. Richard Ramirez, and the president and CEO of the Champ Car World Series, Mr. Steve Johnson. Jim, we'll start with you. You are getting things ramped up for the inaugural event. You're the lid lifter for the 2007 season. No better way to kick this thing off than with a great announcement like you had today. Tell us a little bit about it.
JIM FREUDENBERG: It was a very exciting day for us today. We announced our tickets went on sale to the public. Along with that we announced thanks to Richard and his company, working with Visa, we've secured some very big long-term viability for the Vegas Grand Prix. It also is going to enable us to fulfill the dreams of our two owners, Brad Yonover and Dale Jensen, who had some very high aspirations for their two events in both Las Vegas and Phoenix. This is going to enable us to certainly step it up and make sure those dreams are fulfilled.
ERIC MAUK: Tell us a little bit about how this came about.
JIM FREUDENBERG: Fell from the sky (laughter).
No, actually, I don't think it's any secret that we certainly try to do as much B-to-B and B-to-C work as we can. In the process of that, we signed on a printing sponsor named Tim Taylor. Tim is a very prominent businessman, has a great printing business, amongst many other things. He understood the concept of joining the country club and bringing all his friends. Richard is one of his friends.
We were able to convince Richard this was a good opportunity, not just for the two races that Brad and Dale own, but for all the ventures and subsidiaries of DDB Ventures. This partnership is tied to everything that DDB Ventures does and not just the two races.
ERIC MAUK: Mr. Ramirez, first of all, welcome to the Champ Car World Series. From what your company's standpoint is, tell us a little bit about what made this an attractive deal for you.
RICHARD RAMIREZ: Well, what made it an attractive deal was not only the event itself, but it just made sense, like Jim said, with other business ventures with Brad and Dale. But for the event, it's a great platform, especially with the name "Fueled by Visa" to showcase our technology. First Data is about speed efficiency, that is our main focus here. It's just a great platform, and it makes sense to sponsor this event. From that point, getting the logistics from Vegas Grand Prix, it just made sense.
Once I saw the benefit of it, the partnership that we were about to put together, that's when we pulled the trigger. You know, we're just so thrilled to be sponsoring this event.
ERIC MAUK: A lot of companies in your position might have looked at this and maybe floated a trial balloon, run one race. You guys are doing a multi-year, multi-city partnership. Must have been very attractive to you.
RICHARD RAMIREZ: It really is. Our business is based on transactions. We process Visa, we process obviously all credit cards, they just prefer Visa here (laughter). Yeah, that's our business.
It just made sense because of the other venues, as well, the excitement, being the inaugural, being the first to kick this thing off. We sat down and we decided this is a go, not just for this event, but as well as for the Phoenix event. We're also bringing in some other partners, as well, to be announced later. But it's just going to be a good partnership.
ERIC MAUK: Congratulations. Again, welcome to the Champ Car World Series.
Mr. Johnson, Champ Car has put together a great schedule for 2007, four brand-new events, start starting off in Las Vegas. Makes the season opener even more exciting.
STEVE JOHNSON: We've announced four, but there are others to come. Having been involved with the Vegas Grand Prix with Jim Freudenberg for the last 14 months, every week it gets better and more exciting. I didn't think it could get any better or more exciting, but I was wrong.
Announcing the Grand Prix Fueled by Visa I think is truly the icing on the cake. I just want to tell the First Data and Visa folks, on behalf of Champ Car, we welcome them to our family and look forward to many years of a great relationship.
ERIC MAUK: Thank you all, gentlemen. We'll go ahead and take questions from the media.
Q: Jim, I think Richard might have even hinted at it. This release says Vegas, multi-year, multi-city. Could it be more than Vegas and Phoenix? Could it be as many as three cities fueled by the same sponsors?
JIM FREUDENBERG: We are here to talk about Vegas today. I will tell you, it is not -- there is not a third city involved. I will tell you that.
Q: Could you perhaps talk about the other potential benefits involved with not just these two events, but getting involved in a series-wide way. What aspects of the series as a whole beyond just the two events sponsorships could be attractive to this sort of package?
JIM FREUDENBERG: I'll briefly speak to that, then Richard may have something to say as well.
I think the reason this deal made sense for Richard and his company was because Brad and Dale, my owners, have a number of companies, including sports teams and other series, not other racing series, but Major League Baseball, the NBA. There are a lot of synergies with all of their companies, not just these two races. So the races obviously will see the initial benefit. Richard and his company jumped on board for a much bigger platform than just two events.
That's not to say that somewhere down the road, if we can make financial sense of the transaction business, the technology they're going to showcase at these two events for a bigger audience, for more events, that that won't be something we're trying to do. Initially it's tied to DDB Ventures, which just happens to own two races as well.
ERIC MAUK: Mr. Ramirez, would you care to speak to that.
RICHARD RAMIREZ: I think Jim nailed it right on the head. Not to say that something wouldn't happen in the future, but as of right now, those are the main points of why this deal happened.
Q: Jim, can you just talk about the cooperation that you got from the City of Las Vegas. It's interesting what those guys over at NASCAR didn't get much cooperation to build a track in New York City, but you probably got great cooperation. How did the town get behind this whole thing?
JIM FREUDENBERG: We were really given some good advice in the beginning. When I came in here, Joe Chrnelic had been working with some other people within the city for almost nine months to a year. They were working from the city angle. The contacts that we made here, the friends that Brad and Dale had here, sat me down and said that we need to get the downtown casinos behind this race and then go to the city, rather than do it the other way around, which is the problem that had been happening. He formed a couple of lunches for us with all the downtown casinos. We sat in front of them and said, 'What do we need to do to make this thing work?' They gave us a set of guidelines they all agreed to.
We went to the city with all that support, which is why the city turned around and said, It's a no-brainer. If you have all these big businesses that fuel our downtown area together saying we want to do this, then we need to get behind it and support it as well.
The city councilmen and the mayor have been just been incredible. I have been involved in a number of these things over the last 15, 16 years. I've never seen a city get behind something the way that this city got behind this event. If they all would get behind it with the same magnitude, we'd probably have too many races (laughter).
Q: Steve, where are we in the car count for next year? What is happening with Paul Stoddart's intentions?
STEVE JOHNSON: I'll keep it quick. I'm going to meet with Mr. Stoddart later this week. Car counts are looking healthy. We're looking at somewhere between 20 and 24 cars. There's a lot of deals being finalized right now. I meet with Mr. Stoddart in Indianapolis later this week.
Q: The press release that came out this morning talked about the Vegas Grand Prix. Did I hear you say this is also going to be a sponsorship for the Phoenix race as well?
JIM FREUDENBERG: You did not hear me say that. We will announce other announcements at future dates. Today's announcement was strictly about the Vegas Grand Prix.
Q: You did mention two races?
JIM FREUDENBERG: Yeah, multi-city, multi-year is what we mentioned.
Q: I've seen some other events around the world where people who are like Visa cardholders might get ticket discounts. Anything like that planned for this event?
JIM FREUDENBERG: No, there's nothing like that right now. It will be a moneyless event. We're going to use technology we'll announce at a later date. We will not be offering discounts necessarily.
First Data processes all credit cards, so we don't want to deter from that. Visa is getting the preferential treatment at this point for this event. But it's not something that is going to get -- quite frankly, we're in a position where we don't have to offer discounts, which is a wonderful thing.
Q: I've heard ticket sales were going pretty well, preticket sales.
JIM FREUDENBERG: Amazingly well. In fact, we added 35 percent more seats last Monday because we felt like the demand was there. With the presales, we weren't going to have a lot to go out to the public with from a reserve perspective if we didn't.
Q: What is the grandstand count up at?
JIM FREUDENBERG: Brad and Dale don't announce anything like that. I will tell you it is substantial. After being involved with a number of races in my career, this one by far is the biggest that I've been involved with.
Q: When you have a street race, like Denver I guess is a good example, you had Centrix, looked like they spent a lot of money, promoted it, had corporate involvement, then went away. Denver has really been a struggle. Can you put into words, is it almost impossible to make a street race go without a title sponsor in this day and age?
JIM FREUDENBERG: Certainly without a title sponsor, for temporary road course events, your capital expenditures are pretty expensive to try to amortize, unless you have an owner like Bob Sutton was, where Bob was passionate about motorsports, was willing to take those risks, spend the money out of his own pocket. Beyond that you really need a title sponsorship because you're only getting three days of revenue from a temporary facility. It's expensive to build.
Q: I heard someone on the call say there's some good business-to-business deals, relationships, with this sponsorship. Can you help us understand what you get out of this? How are you tying it together with your business?
RICHARD RAMIREZ: How it ties in is obviously with other venues such as some of the teams that Dale owns or some of the things that Brad's doing, 82 percent of people in the country swipe credit cards. Just so you know what First Data is, every four transactions done in the entire world are done by us. We have a vested interest in their business, in taking over their platform and their credit card services, ATM, Visa gift cards. Anything that's cashless we're going to be doing business with. That's what the whole key was to getting this thing done. That's how we tie into this. That's exactly what made sense to myself and some other people.
Q: Jim, given the fact a number of Champ Car drivers live in the Vegas area, how active have you been working with them, getting them to help you in promoting the race? How do you see that evolving as the race comes closer?
JIM FREUDENBERG: Actually, we've been pretty lucky. I'm really good friends with Jimmy Vasser. Obviously Jimmy has been available on a number of occasions for not just our announcements and our parties but for track evaluations, helping us and Chris Kneifel with some turns, angling, cambers, things like that. Alex Tagliani came to our initial launch party. I've had numerous conversations with Paul Tracy, who has offered up his services as well any time we need any of his help.
They've been very accessible and wonderful to work with. It makes it a little easier when you have them in your city. If I could just get Jimmy in a car.
ERIC MAUK: As we have no other media questions on the call, we'll wrap-up. This brings to a close today's Champ Car media teleconference.
Gentlemen, thank you all very much for joining us and congratulations on a great announcement today.