Bridgestone Presents the Chapter 11 Car World Series Powered by Ford (12/16/03) --

I'm not a finance major. I know how to balance my checkbook and that's about it. So you can take whatever you read from hear on out with a grain of salt. Now, unlike a lot of people I possess some common sense. That's why this whole thing puzzles me.

For those of you who don't know (most of you) or don't care (all of you), the struggling series formerly known as CART, was sold yesterday to a three-man group of investors. Good for them, right? Sure, that's great if they can find people willing to pour money into something they have a passion for to keep it going. If I disagreed with this principle, we wouldn't have professional wrestling or this mind-blowing site.

CART, yours and my favorite publicly-traded penny stock, sank upwards of 100 million dollars or more of its investors' money into the series last season. When I say the series, I mean every aspect of it. They paid for entire teams to race, purchased the engines that powered the entire field, paid to secure some venues on their schedule, and even paid to put their races on TV. Now again, I'm no television economist, but aren't the TV networks supposed to pay YOU to air your races? Something isn't adding up here...

You can get $10,000 to start a coffee shop or $300,000 to acquire a struggling racing series!

The most important aspect of CART's transformation into UNICEF was its handouts to teams (It should be noted that the IRL also partook in this practice in the mid-to-late 90's, although with equal distribution of subsidies). You see, these three members of the CART Board also fielded teams, which is essentially the business model that CART was founded on. What was not in the business model, however, was these three owners to take well over 50% of the handouts from the series. Keeping in mind that they fielded less than half the cars (37% to be exact), one wonders how they became so "blessed" to receive preferential treatment.

Naturally, the series went broke. Things have gotten so bad, that I saw the CART B.O.D. at a recent silent auction here on campus bidding on some old speakers. Apparently they wanted them pretty badly, but they were outbid by this Honduran kid who forked over $5.50. So in response to the rather restricting conundrum of having no money, CART announced it was going to sell to this investing group and go private once again. The three amigos announced about a half dollar/per share buyout of all CART stock, a significant decrease from its $19 debut (I don't have the CART books in front of me, so that number might well be off.)

Hold on a second. You're telling me that three members of the current Board (which consists of a total of five people), were and are able to do all of the following:

1) Receive a disproportionate share of handouts to pocket
2) Make the decision to file for bankruptcy
3) Make the decision to sell to private investors
4) Name themselves as said investors
5) Buy out former colleagues at prices that sweat shop workers would be repulsed by
6) Purchase company from, essentially, themselves.
7) Thanks to Chapter 11, be free from the debt that they possessed a week ago, when the same group ran the company under a different name

Friends, I don't get it. I once again do not profess to be Charles Schwab, but I can recognize when people are getting screwed. But hey, the Champ Car community is loving every bit of it. Never mind the fact that these guys just suckered the investors, when they could've liquidated the assets last year while there was still money to disperse, we've got a series again, baby! And what a series it will be, with recycled money from now-broke teams, no TV contracts, significant sponsor losses, and the end to team subsidies. With such a bright future, one can't help but see how this CART fan would be excited.


The following quote is rated "R", not because of language, but because the author was clearly drunk at the time.

"TG (Tony George), you here ? You here you little prick ? You're next, we, the fans OWN openwheel racing and we've bought along some big wood in the shape of OWRS who are going to bury that sorry, pathetic, non rating, losing millions, crying to your sisters, Japanese owned, "league" of yours.

Mark our word f***knuckle, your days at IMS are numbered. Be afraid, be very f***in afraid. The new war started tonight, and you're on the wrong side arsehole."

Looking forward to Long Beach!

The Leonardite