Thursday, January 05, 2006

Dan Gurney's White Paper

Following is Dan Gurney's letter to the Champ Car teams in 1978:

Over the past 3 or 4 years I've had conversations with almost all of the car owners and team directors. I've had talks with drivers, with sanctioning body directors, with track owners and promoters and big sponsors and fans and other interested parties. Generally there is agreement that something is wrong with our sport -—it is not reaching its full potential by any means, and there is great need for a change!
Early in my discussions I realized that we are so intent upon racing each other, that we do not stop to look and analyze our situation. In frustration I decided that things must get worse before we will all wake up. Our sport has the potential to be financially rewarding and healthy from a business standpoint for all participants. Many of the car owners and team directors are excellent and very successful businessman in their own lives outside of racing. We as businessmen should be ashamed of ourselves for being involved in a prestigious sport such as Championship racing with all its potential while it is as weak and disorganized (sick) as it presently is. It is truly strange that with all these 'heavyweights' involved, we still do not have our act together. ("Divide and conquer" still seems to be working doesn't it?).
O.K.! What shall we do about it? First let us digress for a moment. Let's study some history. Back in the early 70's, the status of Formula 1 Grand Prix racing was similar to our own USAC Championship racing right now. The crowds were quite small, sponsors were hard to find, the news media was not overly interested, expenses were high and going higher and the entire scene was one of disorganization.
It was at this moment in time that the desperateness of the situation made them unite and form an organization called the Formula 1 Constructors Association (FICA or FICA). They appointed a man named Bernie Ecclestone as the chief of operations officer and negotiator and they made a solemn pledge to abide by his decisions 100%. They rolled up their sleeves and proceeded to up-grade the entire sport to the point where the paying spectator crowds are much, much larger, sponsors are numerous and happy to be involved, the media is vigorous in covering all the events on TV and so are weekly magazines and daily newspapers on a world wide basis, and money is coming back to the constructors and track owners in the form of larger ticket sales, more sponsorship, more prize money and expense money and the spectator is getting a much bigger, better spectacle for his ticket money.
The obvious fact is that the FICA has transformed the Formula 1 Grand Prix racing scene from what was a weak and scattered group of teams without any bargaining or negotiating strength into a bona fide business. They did it by uniting and making that 'no turning back' commitment. They speak with one voice (that of the Chief negotiator) and that voice has gained authority by leaps and bounds.
Now, it is true that the Championship racing scene is somewhat different from Grand Prix racing and therefore it will require a slightly different organization to bring about an improvement. I only mention the FICA organization as an example of something that has succeeded, on no uncertain terms. I think everyone agrees that the cost of Championship racing has escalated to the point where it is virtually ridiculous, and at the same time, many of the rewards have not increased at all, but have actually declined when you consider the effects of the general inflation in the U.S. economy.
At the moment we the car owners are the ones who have put forth by far the most effort, by far the most financial stake with little or no chance for return and yet, because we have been so busy fighting with each other, we have let the track owners or promoters and the sanctioning body lead us around by the nose while they reap the benefits. USAC for instance negotiates with TV as though it had the TV rights which in fact, if it came to a showdown, would turn out to be ours. (The car owners and teams).
It is obvious that if Long Beach can afford to pay approximately $1,000,000 per race after only 5 years of existence (established 1974) and maximum paid attendance of 70,000 so far, that Indy with its 600,000 plus audience (200 1st weekend qualifying, 100 2nd weekend qualifying, 300 Race Day for 600,000 paid attendance) and its 60 year tradition and international TV coverage, could afford to spend over $2 million on the purse, if it were to be fair. As Mr.Lindsey Hopkins said, "We are the ones who did more to build the stands at Indianapolis than anyone else. IMS should thank us each year, in addition to our thanking them".
In all of our discussions, as car owners and team leaders, we have agreed that it is essential that we continue to support USAC as the sanctioning body for Championship racing. The only improvement will be that USAC will work for us and support our cause and our policies as well. It should be clearly understood that the purpose of this organization is to make racing better in an overall way. Not just for the car owners and drivers, but also for the track owners and promoters and the sanctioning body and the sponsors and supporters and last but certainly not least, the racing fans and paying spectators.
In the final analysis of course, large crowds of paying spectators are the keys to success for all. Track owners and a sanctioning body who aggressively promote these big events — which by contract will feature the teams and driving stars, will get the crowds…which in turn excites the sponsors and TV networks and the crowd, etc., thereby upgrading the entire sport business. It is my firm belief that rather than cutting the cost of racing which in itself is nearly impossible, it is far more important to make money more readily available by increasing the popularity and prestige of the sport with the general public.
Tracks that refuse to put forth the necessary enterprise and promotion in order to meet the minimum purses should not be allowed to hold races. Another alternative is to allow our organization (this idea borrowed from the FICA) to take over the track on a reasonable lease arrangement and we can do the promotion and the running of the race where we feel it can be successful. Still USAC sanctioned of course. For instance, the German GP at Hockenheim will be promoted by the FICA this year, 1978.
Now, how do we get there from here? As I see it, the first step is to analyze the situation, get together and form the organization. (Let's call it CART or Championship Auto Racing Teams.) Once we agree to the fact that CART is needed then we must outline what we want to do and how we should accomplish it. I believe that the organization can be operated by a staff of three people. One director/negotiator, one secretary and a staff accountant and gopher if needed. He will need an air travel card, a telephone credit card and an expense account. It is rumored that Bernie takes none of this, he only works on a 2% commission of everything that is done through the FICA.
It appears that a 'show down' with the Indianapolis Motor Speedway is or should be the first target. They are the ones who can afford it. We should re-negotiate the TV contract (our rights — not theirs) and we should double the purse. Other tracks should be negotiated with on the basis of what is a reasonable amount of revenue to come from all sources such as TV, gate receipts, advertising sponsors, etc. The entire picture should be shared from the standpoint of cooperation rather than killing each other.
We must work together to learn how to upgrade the overall marketing — advertising. If CART can send in drivers and media material beforehand to the newspapers, the TV stations, the Chamber of Commerce as well as various civic organizations and schools, etc. then we should do so. It is vital that we solve the riddle of getting more money coming in from spectator and sponsor advertisers, and TV networks so that there is a bigger pie to carve up…the only way our demands for more money in the form of a prize fund can have any validity is if the money is there in the first place. Unless we reach the point where we can see the books of these various tracks, we will be negotiating from a position of ignorance. It seems to me that we could all be further ahead if we worked together rather than be divided. We must see the tax returns and books.
With the correct program of exposure, a fuel company can still get the right sort of benefits from being the exclusive Championship series sponsor. Cigarettes, Whiskey, Banking, Unions…we need a very aggressive sales promotion team with super people heading it. How do we finance this C.A.R.T. operation? Entry fees? Percentage of the purse? Etc. I'm open for suggestions. Someone (our man from C.A.R.T.) must be part of all Dick King's negotiations with track promoters and television people and series sponsors etc.


WickerBill Sez;

Dan's foresight eventually became CART but the idea of a single leader like that of Bernie Ecclestone in Formula 1 which I thought would have been the key to a long lasting success was not adopted. Instead the team owners, excellent businessmen in their own right, tried to manage the company and in the end simply couldn't put aside their egos long enough to make CART last - the rest is history.

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