Championship Auto Racing Teams, Inc. announces aggressive plan to attract and retain race teams for 2003 and beyond. *Payments to teams to total $850,000 per car *Associate sponsor program introduced *Cosworth relationship...
Championship Auto Racing Teams, Inc. announces aggressive plan to attract and retain race teams for 2003 and beyond.
*Payments to teams to total $850,000 per car
*Associate sponsor program introduced
*Cosworth relationship detailed
INDIANAPOLIS (August 17, 2002) - Championship Auto Racing Teams, Inc. (NYSE: MPH) announced today enhanced financial incentives for existing and new race teams to compete in the CART FedEx Championship Series for the year 2003 and beyond. Enhancing the Entrant Support Program (ESP) previously announced in June, the expanded ESP plan will provide up to $850,000 in cash payments for each car entered in the 2003 championship, for a maximum of 20 cars.
"This unprecedented program is being launched to assure that CART continues to be the preeminent open-wheel racing series in America," said CART CEO and President Christopher R. Pook. "It is designed to retain current racing teams and attract new participants for the CART series in 2003. These measures reaffirm CART's commitment to invest in our principal asset - our race teams - in order to achieve our objectives for growing our sport and providing a return for our promoters, sponsors, television partners and our teams, as well as our shareholders."
As part of the $850,000 in direct incentive payments, CART is launching a unique associate sponsor program that will create revenues for the company at every level. CART will find and establish the associate sponsors to help offset the costs of the incentive program. In exchange for the associate sponsor monies, each team will be mandated to make space available on its cars for potential sponsors. Participating associate sponsor companies will receive logo space on the cars, advertising and promotional considerations, as well as advertisements on television and in print media. In addition, race title sponsorship and/or official sponsor status, including hospitality, will be included at venues where it is available. This program will provide a unique and new value-added addition to the overall CART marketing and promotional plan commencing in 2003.
The new programs, which are designed to accommodate 20 full-season entrants, build on the incentive plan established during the 2002 season that awards teams $10,000 per race for each car entered. That figure was increased by an additional $12,500 per race for 2003 when the ESP was announced in June, making the total incentive package worth $450,000. The associate sponsor program adds an additional $20,000 per race, or $400,000 per entry, making the total package to teams $850,000 per entry for the entire 20-race schedule.
"In addition to further supporting our teams and our venues, the associate sponsor program combines a number of important sponsorship opportunities in one package which will be presented to the sponsors at a very attractive price," said Pook.
CART's previously-announced memorandum of understanding agreement with Cosworth Racing Inc., which is in the process of being finalized, further supports the company's commitment to improve racing economies for its teams. Beginning in 2003, Cosworth will serve as the exclusive engine supplier for the FedEx Championship Series. Under the terms of the two-year agreement, CART will purchase 100 engines from Cosworth at a total cost of $4 million and will amortize the expense over the two years of the agreement. In turn, CART will then lease these engines to the teams at a cost of $100,000 per year, per car, over each season. The series will also provide at-track engine support at a cost to CART of $750,000 per year.
"The new ESP plan, the associate sponsor program and the Cosworth engine agreement underscore CART's significant commitment to the future of the FedEx Championship Series and make competing in CART one of the biggest values in motorsports," said Pook. "In addition, CART's technical staff is continuing to work on programs that will reduce the overall cost of doing business for our teams. While our business model has changed and is requiring substantial investment on our part, we are confident in the direction we are taking and believe that the short-term costs will be more than offset by future benefits and return to our shareholders."
Championship Auto Racing Teams, Inc. (NYSE: MPH) owns, operates and markets the CART FedEx Championship Series. Current points leader Cristiano da Matta, along with former series champions Michael Andretti and Jimmy Vasser, are among the stars who are battling for the 2002 FedEx Championship Series title with championship-winning teams such as Target Chip Ganassi Racing, Newman/Haas Racing, Patrick Racing and Team KOOL Green. CART Champ Cars are thoroughbred racing machines that reach speeds in excess of 200 miles per hour, showcasing the technical expertise of manufacturers such as Ford Motor Company, Lola Cars, Reynard Motorsport and Bridgestone/Firestone North American Tire, LLC. The 19-race 2002 CART FedEx Championship Series is broadcast by new television partners, CBS, FOX and SPEED Channel. CART also owns and operates its top development series, the CART Toyota Atlantic Championship. Learn more about CART's open-wheel racing series at www.CART.com.
Statements made in this news release that state the company's or management's beliefs or expectations and which are not historical facts or which apply prospectively are forward-looking statements. It is important to note that the company's actual results could differ materially from those contained or implied by such forward-looking statements. Among the risks and uncertainties to be considered include, but are not limited to, CART's new co-promoted and self-promoted events; new television and advertising arrangements; the success of races in new venues; the current uncertain economic environment and weak advertising market; among others. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's SEC filings made from time to time, including, but not limited to, the Form 10-Ks and subsequent 10-Qs. Copies of those filings are available from the company and the SEC.