[DOF_power]

SPECIAL: White Paper + 30









Written by: David Phillips
RACER Magazine
02/13/2008

Dan Gurney laid down the vision that led to CART, although his assumptions of team owners pulling together proved optimistic. (LAT photo) » More Photos

Thirty years ago, Dan Gurney authored one of the most influential documents in the history of American motorsport, his fabled “White Paper.” In it, Gurney noted his conversations with the various constituents of the United States Auto Club (USAC) Championship Series produced a consensus 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!” Gurney believed the sport had “the potential to be financially rewarding and healthy from a business standpoint for all participants.” That it was instead beset by runaway costs, puny purses, spotty media coverage, indifferent attendance and had difficulty attracting and retaining sponsors was, to Gurney’s thinking, ultimately the responsibility of he and his fellow team owners who were so focused on competing on the racetrack they “let the track owners or promoters and the sanctioning body lead us around by the nose while they reap the benefits.”
As a solution, Gurney proposed creating an organization of team owners called Championship Auto Racing Teams (CART), based loosely on the Formula One Constructors Association (FOCA) which had given a member of their fraternity – one Bernard Ecclestone – carte blanche in negotiating with track owners, race promoters and television networks for a better deal; a deal that “upgraded 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 worldwide basis, and money is coming back to the constructors and track owners in the form of larger ticket sales, more sponsorship… and the spectator is getting a much bigger, better spectacle for his ticket money.”
The rest is history. CART was duly formed – with the enthusiastic backing of team owners Roger Penske, Pat Patrick, Jim Hall, Team McLaren’s Tyler Alexander, Bob Fletcher and Gurney – and everyone lived happily every after.
Not by a long shot.

In 1978, USAC went international for the first time, bring Indy cars to England for a pair of road races. (LAT photo) » More Photos

Although CART ushered-in a golden era in the ’80s and ’90s, what has since come to be collectively called “American open-wheel racing” (i.e. the rival Champ Car and the Indy Racing League) is arguably in worse shape than when Gurney put pen to White Paper. As bad as things may have been in ’78, USAC champion Tom Sneva was universally regarded as America’s “National Champion.” Today, although NASCAR has stopped short of co-opting that lofty title, few would argue Jimmie Johnson, not Sebastien Bourdais or Dario Franchitti, is America’s de facto National Champion; just as he was in ’06, and Tony Stewart, Kurt Busch and Matt Kenseth were before him. Gurney could scarcely have imagined that turn of events 30 seasons ago. As for paying spectators, sponsors, “vigorous” media coverage and money coming back to the tracks...it hardly gets better. Although CART produced some of the greatest open-wheel racing ever seen (with crowds, media coverage and sponsorships to match), much of that has since been lost. With few exceptions, attendance is down compared to the ’80s and ’90s. Open-wheel racing has failed (or is failing) at former hotspots like Michigan, California, Phoenix, Portland and Milwaukee while new events from Las Vegas to Orlando have gone bust.
Strictly speaking, media coverage has improved compared to an age when auto racing was only noticed on the day following the Indy 500 or in the wake of a fatal accident, and television exposure was limited to ABC’s Wide World of Sports. But open-wheel racing struggles to generate anything but negligible TV ratings and, in the case of Champ Car, only gets network coverage via time-buys.
Can anybody say On Track, IndyCar Racing or Champ Car magazines? They all devoted serious coverage to American open-wheel racing, and they all went belly-up as subscriptions dwindled and advertising pages vanished. Sponsors? For every Target, McDonald’s, CDW or Motorola that has embraced or remained loyal to the sport, scores of Millers and Budweisers, Valvolines and Pennzoils, Kmarts and Gigantes are spending their money elsewhere. How about Chevrolet, Ford, Mercedes-Benz, Porsche and Toyota? PPG, FedEx and Pep Boys?

F1 in 1978 was a far cry from the multi-national-corporation powerhouse of today, but even then had laid the foundation for long-term success. (LAT photo) » More Photos

It is easy to blame Indianapolis Motor Speedway president/Indy Racing League founder Tony George. After all, he is the one most responsible for the catastrophic “split” between CART (and its successor, Champ Car) and the IRL; the one who has nixed various reunification plans at the 11th hour. And, in truth, had George exercised more patience and leadership within the CART framework, it’s possible things wouldn’t have arrived at today’s lamentable state. But let’s not forget CART was anything but a smoothly running machine in the ’90s. For all that was good about the series, with the benefit of 20/20 hindsight, it is clear CART’s success had more to do with serendipity (for example, the timely demise of the Can-Am that injected new blood like Newman/Haas, Truesports and Galles Racing into the sport) than brilliant planning or management. Recall when Andrew Craig was anointed CART’s savior in ’94, he was at least the sixth individual to hold the top spot in the organization’s turbulent history. Sponsors were sharply divided over whether the series should expand internationally or remain focused on North America, and the emergence of “foreign” drivers was hotly debated by fans, sponsors and promoters alike. CART’s technical operations group was inadequate (as the engine manufacturers war would prove) and, of course, the collective genius of CART, USAC and the Indianapolis Motor Speedway had failed to fully integrate the Indy 500 into the PPG Indy Car World Series.
Ironically, the causes for much of this dysfunction can be gleaned from a single sentence in the White Paper. Writing about FOCA, Gurney noted, “They appointed Bernie Ecclestone as the chief of operations officer and negotiator and they made a solemn pledge to abide by his decisions 100 percent.”
Two points. First, like NASCAR’s Bill France and the NHRA’s Wally Parks, Ecclestone is one in a billion. You don’t find his likes by promoting some lackey from within or by advertising in Autosport or The Wall Street Journal. Number two, CART’s team owners never made a vow (let alone acted accordingly) to abide by their chairman’s decision 100 percent.
Second, unlike Ecclestone, Ron Dennis, Frank Williams, Ken Tyrrell, Guy Ligier and many of the other FOCA signatories, few CART team owners derived their living from motorsports; rather, their race teams were expensive hobbies. And when push came to shove, Patrick, Penske, Rick Galles and their ilk inevitably reverted to the law of the sandlot: It’s my football and we play by my rules or we don’t play at all. Exit a disgusted Mr. Gurney.
Little has changed in that regard. Of Champ Car’s current owners (Gerald Forsythe, Paul Gentilozzi, Dan Pettit and Kevin Kalkhoven) only one (Gentilozzi) ever realized a significant portion of his income from auto racing.
Indeed, like Mr. George, Champ Car’s co-owners are subsidizing teams and/or their series out of their own deep pockets. Nor, thanks to the Brickyard 400 and (now) the U.S. MotoGP round, does the Indianapolis Motor Speedway’s bottom line depend on the Indy 500, let alone American open-wheel racing.
Given the state of American open-wheel racing, that’s a good thing for IMS. But it’s a sad commentary on a sport that may no longer have “the potential to be financially rewarding and healthy from a business standpoint for all participants.”
• To read Gurney’s White Paper in its entirety, go to Eagle-eye Feature:* CART White Paper

[DOF_power]

And here's Gurney's actual White paper from 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 FOCA). 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 FOCA 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 FOCA 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 FOCA) 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 FOCA 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 FOCA.
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.