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Bargain Shopper: Lack Of Teams Gives Owrs Better CART Deal
Published December 4, 2003
|Fewer CART Teams Could Make
Transaction Easier On OWRS
OWRS principals Kevin Kalkhoven, Gerald Forsythe and Paul Gentilozzi are not "abandoning their plan to rescue" CART, but are "changing strategies in a move that may save them big money and aggravation even though it has created some major confusion," according to ESPN.com's Robin Miller. Instead of waiting for a December 19 shareholder vote on the sale, OWRS, "in effect, is asking the CART [BOD] to liquidate ... and sell them certain assets immediately." Since the merger agreement had provisions to guarantee that the number of cars would not decrease from '03, the folding of American Spirit's two-car operation gave OWRS a "new avenue to take that possibly will prevent any stonewalling or lawsuits by angry stockholders." Also, should CART go bankrupt, OWRS would not have to pay the $0.56 a share and would "likely be able to buy the assets at a greatly reduced price" (ESPN.com, 12/3).
EASY OUT? But stock analyst Dennis McAlpine believes that OWRS "might be trying to get out of the original deal." McAlpine, on CART: "There's nothing to liquidate. It's almost forcing CART into bankruptcy and gets Open Wheel out ... It's very surprising they come up with this now when no one in the world thought they would have 18 cars six months ago. To me, it sounds like a negotiating ploy to get the price down and cherry pick assets" (ST. PETE TIMES, 12/4). Crain's Cleveland Business racing analyst Denise Melilli is "not sure OWRS wanted to proceed once the field was reduced to 16 cars," adding, "They don't have enough teams right now and I'm not sure they're ... willing to prop the system with their money. (OWRS) is willing to invest a substantial amount of money to get the series back on track, but what it's going to take is more than what they're willing to give" (TORONTO STAR, 12/4).
INDY HONING IN? ESPN.com's Miller wrote, "The fly in the ointment for OWRS could be" IRL President & CEO Tony George, who "could out-bid OWRS for CART's assets, pluck the choice venues and deep six CART forever." Toyota, an IRL engine supplier, could urge or help George acquire CART's Long Beach race that it title sponsors. Toyota National Motorsports Manager Les Unger: "We look to the owners/promoters, which is Dover Downs and the Grand Prix Association of Long Beach. ... I don't know that anybody has any answers yet" (ESPN.com, 12/3). IRL VP/PR John Griffin would not "speculate on whether the IRL would be interested in taking over any of CART's venues." Griffin: "All I can do is remind you that in August we advised our manufacturers and teams to have update kits ready for the possibility of going road-course racing in 2004" (INDIANAPOLIS STAR, 12/4).