Q&A: Brian Barnhart and Ken Ungar

IRL officials:
Brian Barnhart [IRL Vice President of Operations] and Ken Ungar [Vice President of Business Affairs].

Host:
Mike King.

The following is a transcript of the press conference Feb. 5 featuring Indy Racing League Vice President of Operations Brian Barnhart and Vice President of Business Affairs Ken Ungar.

Mike King:
It is a pleasure to be here with you today for the 'Test In the West' State of the Series Address. Following the conclusion of their presentation we'll take questions from the media.

One of the true strengths of the Indy Racing League in this seventh season has been the stability and consistency and professionalism of the individuals who led to the growth of this series, and I am proud to introduce two of them to you today.

First, it is Brian Barnhart. Brian is vice president of operations of the Indy Racing League and chief administrator for the series and basically oversees all of the day-to-day operations of this league. He will be addressing you second today. Brian has been invaluable in the growth of this series.

Second, it is Ken Unger - the newly appointed vice president of business affairs for the Indy Racing League. That appointment came in December of 2001, but Ken is by no means a newcomer to the series or to the Indianapolis Motor Speedway. In fact, he has been here pretty much from the beginning. He was named chief of staff of the Indianapolis Motor Speedway in 1997 been involved in several key issues, including negotiating promoter agreements and other business aspects of this series, including the marketing of the league that he is overseeing. He was also involved in heading up the Indianapolis Motor Speedway portion of the Chicagoland Speedway projects.

So it is a great pleasure to introduce to you today both Ken Unger and Brian Barnhart as they address the state of the series, Indy Racing League, as we get set to start 2002.

Ken Ungar:
Great. Thank you, Mike. It is a pleasure to be here today. As we enter the 2002 season, the seventh, the Indy Racing League, several points are clear. Everything points to this being the greatest season in our history. Our momentum is growing every day.

The plan for the Indy Racing League is working and Tony George's vision of open-wheel racing in America is quickly becoming a reality. This will be our greatest season yet. Looking back, in 1996 we saw the Indy Racing League debut against the odds, behind the claims of some that the league would never turn a wheel.

In 1997 you saw the first simultaneous introduction of new chassis and engines in American racing history. 1998 through '99 saw us overcome one challenge after another. 2001 saw the Indy Racing League break through with consistent competition, one of the best races ever in Texas and, new aggressive marketing and public relations plans that helped bring our league to new markets and new customers. 2001 saw the largest number of races yet; four sell outs, consistent growth in attendance and realization that the Indy Racing League is open-wheel racing's future in the United States.

2002 will be the beginning of many years to come with more growth, more stability and strategic placement of the Indy Racing brand. Momentum is our mantra. The number of races is growing again with 15 this year and in key open-wheel markets here in Fontana for the Los Angeles market, Michigan as our mid-west strategy continues to grow and Nazareth in the eastern United States.

Our television presence is getting even stronger with most of our races on ABC this year and the balance on ESPN networks in a contract that has been extended through the 2007 season. Our international television presence through ESPN International will be our strongest ever and by far the best for any American based racing series. We're pleased to have with us here today Mr. Mark Riley, vice president of ESPN International, and Mr. Vincent Shopan of Euro Sport. I would like to thank them for being with us here today.

All of our Promoters are pleased with the growth and value of the Indy Racing League. We're proud of an expanded relationship with ISC, including new races this year at Fontana, Michigan and Nazareth. We're very proud of our relationship with the Texas Motor Speedway, SMI's Crown Jewel of motorsports. Proud of our new races at Nashville and Gateway, tracks within the Dover Downs family of racetracks. And we're proud of our events at the leading independent racetracks across the country.

Nowhere is growth more important than in sponsorship, and at a time when all sports are finding it difficult going we're proud to be adding blue chip names to the Indy Racing League, including Chevrolet, Toyota, Worldcom, Firestone, Marlboro, Reebok and Red Bull, to name a few, joining Nissan and Coors and others who are increasing their commitment to the Indy Racing League.

Penske, Nunn and Blair, all well-known names in open wheel racing are being joined by several newcomers adding to a stable core of Indy Racing League teams who have proven that they can compete with anyone. Our plan is working. We're keeping it simple. American oval tracks, controlled costs, level playing field, and opportunity for men and women who want to compete in open-wheel cars and oval tracks and whose ultimate goal is to compete in and within the Indianapolis 500 mile race, the greatest race in the world.

We're staying focused. Stay oval, keep costs down, provide opportunity and have a team of individuals who know and love what they are doing. We're working hard. We're proud that our league does more for its team and partners than any other in motor sports. We provide services, we provide support, we help find sponsors. We aggressively promote our races in each market with each of our track owner partners and provide tools and manpower to grow our sport.

Tony George's vision is becoming reality. There are those who doubt that there was a place for an oval open-wheel series in America. There were those that doubted that costs and speed could be controlled and that safety could be improved at the same time. There were those who doubted that opportunity could be provided to give young men and women who prefer open-wheel oval racing a chance for a career and those who doubted that the Indy Racing League could stand as a result of protestors, sponsors and media who did not believe in a similar vision.

As we begin a 2002 season, we look forward to 2003 season as well. The doubters are fewer, the believers are growing in numbers and the Indy Racing League is close to claiming its rightful number in sport. Tony George's vision is becoming reality, but he would be the first to acknowledge that it is a shared vision of men and women. People like Herb Fischel, A.J. Foyt, Leo Mehl and those who believe in the history and tradition of open-wheel racing. So I am proud to say the state of Indy Racing League as we enter 2002 is very good and getting better. And you will hear and see more of why that is true as the 'Test in the West' moves forward. Thank you for being with us here in Fontana and thank you for supporting the Indy Racing League.

MK:
Once again, vice president of business affairs, Indy Racing League, and he will be available for questions immediately following Brian Barnhart's address. Brian is, as we mentioned a few minutes ago, vice president of operations for the Indy Racing League. He comes from a family that has been involved in racing for three generations. Brian has a unique aspect and vision when it comes to his job because he has seen racing from all levels, including as a mechanic, chief mechanic, a crew member that has been in victory lane with winning teams at the Indianapolis Motor Speedway, at the 500 and won championships. Brian Barnhart understands what it is to be a racer and understands what racers have to have to do their job. It is with great pride that I introduce to you the vice president of operations of the Indy Racing League, Brian Barnhart.

Brian Barnhart:
Appreciate that, Mike, very kind words and, Ken, great job. It is a pleasure to work alongside you heading into the 2002 season. As we enter the new season, the Indy Racing League has never been stronger. Our future has never been brighter and never more confident than we are right now.

Some of the highlights you can anticipate in 2002 include the announcement of our Leader's Circle program which we made in the middle of January, upon the creation of the new Infiniti Pro Series which will participate beginning in July starting with the Kansas race. We have new teams, new drivers, new suppliers and manufacturers joining us, and we have implemented some new testing regulations and tyre allotment policies which will obviously greatly impact the budgets and amount of moneys guys can spend and impact the competition on the racetrack.

In taking those in order, the middle of January we created a program that we called the Leader's Circle, and the purpose of this program is to share the benefits of our sponsor's relationships with our teams and participate on a full-time basis. It is centered on an exclusive agreement with Firestone which we announced at the Texas race in October. The announcement by Firestone as our exclusive tire supplier in 2002 was a major announcement for the series. It is an unbelievably significant commitment on Firestone's behalf to the Indy Racing League and participants. It is on the level of title sponsor proportions and they are making a commitment to the Indy Racing League. Because of that commitment we've created a program to share benefits with our teams that participate on a full-time basis.

We're in agreement with Lincoln Electric Welders. They will provide the Leader Circle participants with $15,000 worth of welding equipment for the season. The Leader Circle participants will get the preference and preferred economic terms from Firestone for tyre supply in 2002. Leader Circle participants will also receive discounted entry fees, discounted fuel costs and IRL mandated electronics and equipment packages at no charge for the season.

The electronics and equipment package includes the rev limiter, wire harness, on-light camera mount and cover, and timing and scoring device and cover. All that equipment is necessary to participants on the track and as a Leader Circle participant you will get the use of that equipment at no charge.

You will also receive the marketing benefits of Indy Racing marketing groups. It is a tremendous program, very excited about it. We set the deadline for notification on Monday, January 28th. And to be perfectly honest, we thought we would be announcing the 24 participants today and we have been pleasantly surprised and overwhelmed by the positive response to the program. We have 35 applicants for the 24 positions. Based on that the timing of the open test here at the California Speedway and next week at Phoenix we're going to give a few of the applicants a little more time to determine and finalize their programs. And I would expect obviously in the next week or two we'll be making announcements as to the 24 participants in the Leader Circle. But needless to say, we've been a little bit overwhelmed by the response.

It is another sign of the growth of the Indy Racing League. It is a tremendous opportunity for people. I think the entrants are realizing that participation in this program is an outstanding benefit and it is just another way that we're working very hard with our teams and owners. The Leader Circle will benefit promoters by being able to establish in the beginning of the year a core group of participants that are going to show up at every race and support them. They will be able to do marketing posters and promotional materials and obviously that is a very big step for promoters and passing the benefits of our partners and manufacturers on to our teams and helping to control and reduce their costs.

So that is an outstanding program. We will be naming the 24 participants within the next couple of weeks. The program will carry over. It is basically a phase one impacting in 2002. The program will continue to grow in 2003, and as we continue to grow as a league the benefits available to the Leader Circle participants is virtually limitless. We can include any number of things down the road with our promoters from tickets to hospitality, to marketing to credentials, and continue to make it a tremendous program to be a part of. We're also in the position where we could be able to increase the number of participants. It is at 24 for the year 2002 and there is a chance that number will grow in the future as well as the league continues to grow.

2003 participation in the Leader Circle program will be determined by the point standings from 2002. The top 20 point from 2002 will be eligible to participate in a program in 2003. And at least four other teams will be added in 2003 based on the criteria of the selection of the present year in 2002, the team's ability to demonstrate financial support and commitment for the entire season. The top 20 are automatically eligible for a minimum and four will be added at the league discretion for 2003. Like I say, this is just phase one of a great program that we expect to grow and expand in the future years.

The next great thing obviously to come on board for the Indy Racing League in 2002, we're very pleased that we're introducing the Indy Racing Infiniti Pro series. It will debut in Kansas, as I said, in July. I would like to take a moment and introduce Roger Bailey, executive director of Infiniti Pro Series. The Infiniti Pro Series is in very capable hands and a great addition to our league. Roger has an incredible amount of experience in motor sport and he will lead and direct the Indy Racing League's Infiniti Pro Series.

It is a much needed step to train drivers mechanics, owners and bridge the gap between whether it is midget, sprints, silver crowns, go carts, anything. There is a tremendous ability of a driver who participates in those series at a younger age to learn how to race. He will do a great job to participate. In continuing to learn to race with guys, learn to race on ovals, learn to race on pavement. But there seems to be a step missing or step we need to fill for a guy first coming out, whether the midget race or even go-carts that has the ability to get in a car that has aerodynamics to race. We have developed a 450 horsepower car which will be introduced by Infiniti, Dallara chassis.

The same safety aspects will carry into the Infiniti Pro Series cars and we'll provide a plan for drivers to learn a mid-range horsepower car and aerodynamic chassis to get used to the effects of running in a draft and with wings, a car with underwings and the transition from a front engine sprint car with 700 horsepower to midlevel rear engine with aerodynamics' experience. It is a tremendous asset to the Indy Racing League. All of the races for 2004 will be televised by ESPN networks, a television package that will be a tremendous asset to the series as well.

Ken touched upon it a little bit, the teams, new drivers, new manufacturers, coming on board. I think, as he mentioned, in a time when the economy is what it is for us to be able to add a list of manufacturers and suppliers joining this league, the likes of Chevrolet, Toyota, I mentioned Firestone's commitment, Red Bull, Marlboro, we have a tremendous growth in a league at a time that is difficult and everybody is fighting for sponsors. We have Coors and Nissan increasing their commitment. Nissan through the Infiniti Pro Series and Coors becoming the title sponsor for Buddy Lazier.

We have great addition and growth at a time that people are fighting for sponsorship dollars. We have growth in new teams. Marlboro's addition to the Indy league is a tremendous asset. We're bringing on board obviously drivers like the defending Indy 500 winner Helio Castroneves, two time defending CART champion, Gil de Ferran and a team by which all others are measured.

Marlboro Team Penske is the yardstick of success in any form of motorsports. They have a tremendous team to bring on board. We have now running Larry Blair Racing, coming on board with Alex Barron. We have great growth and new teams coming on board, combining that with the stability of the Indy Racing League and teams that are going to continue to participate on a high level. We have Panther Racing, Cheever, Foyt, Kelly, Menard. There is a very strong core group of participants and stability from that aspect with the drivers that are associated with those teams. Greg Ray, Sharp, Buddy. We have an outstanding group of people here and it is a tremendous mix of people returning to the Indy Racing League and new drivers coming on board.

It is a great atmosphere for opportunity of drivers, the likes of Bill Boat, Sarah Fisher, Donnie Beechleer, Davy Hamilton are great success stories in creating an atmosphere for drivers to succeed at this level.

We've come to a general recognition from the media and fans that our on track product is second to none. We put on races that are incredibly entertaining. Rules are announced and enforced fairly and we're all about value and entertainment. Our track product is outstanding. I can't underestimate the importance of Chevrolet joining the series and marketing power they bring on. As I mentioned, Firestone, we're really excited about the future. We'll have more to announce in the future obviously with the Leader Circle and other programs.

We introduced several new rules for 2002 to help keep the competition playing field level. Testing is limited through the number of tyres that are available with our exclusive agreement with Firestone. All entrants are allowed a set number of tyres for race weekend depending on the length of the race. 200 mile gets seven, 300 mile gets eight, 400 nine, total of 38 sets available throughout the year for racing. We have open tests here at the California Speedway tomorrow, two days at Phoenix, Friday and Saturday of this week and two days at Nazareth the first week of April. Those five days of open tests entrants will have three sets available per day to be used on those. They will use them or lose them sets. If they don't participate in the open test they will not have access to those tyres. An entrant would be allowed 30 sets of tyres to test with for the year and those sets are guaranteed only if you are a Leader Circle participant. We have a great way of controlling costs, there is only X number of miles in a set of tyres, so as an owner you know maximum number of miles you will be able to run through the course of the year. There is a cost per mile of operating the cars. You know very closely before the season begins what your budget is going to consist of and number of miles you can run and number of sets of tyres you can run.

As I mentioned, the open tests at Phoenix will continue Friday and Saturday of this week and Nazareth is, I believe, April 4th and 5th.

Our future is bright and getting brighter each day. We have finalized about 90 percent of our specs for the 2003 chassis. We're increasing the size load, the nose push-off test. We're making changes to our cars based on safety. We have a tremendous on-track product and people would ask why are we making a change and implementing new chassis in 2002. Well, 2002 is the third year of these chassis. We have update kits available and it is the second and third year of these kits. Most of the things contained in the update kits are safety related.

2003 is why we're changing chassis and going forward again. The primary reason for the change is safety. Like I said, we'll be making changes to the motors, nose push off, safety and anti-intrusion materials in the tub. The body, which will be a minimum width of 60 inches, for instance. Gear box design, all of this to improve the crushability of the car, the ability of the car to absorb energy and make the car safer for car drivers in competition. We're going to in 2003 design purpose-built three and a half liter, improving handling characteristics of the car and less mass on the racetrack as we go forward as well.

We contacted and have been contacted by several new manufacturers in the chassis area. We look for a potential of new manufacturers joining us in 2003. Both engine and chassis manufacturers have until April 1 of 2002 to notify us of their intent to participate in 2003. That is an outstanding asset for us to be able to look at in beginning of 2002.

We got teams looking for full-time participation in '03 and beyond, and it is simply because of our equipment package, our rules, our enforcement, our growth and our stability. I am very proud to be associated with a very great team. Tony George's vision is becoming a reality. Ken Unger is a great addition. Glad to have Roger Bailey bring us racing in the new Infiniti Pro Series. I appreciate what Phil Casey and Les Mactaggart have been able to do with the technical ability on our staff. Great staff in my view. Tiffany Hemmer, director of administration, Ron Green, our director of media relations. That is a testament to Leo Mehl. He put together groups of people who understand their rolls, their accountability for what they do and I think it is a real tribute to what he has been able to put together that we move forward with what we have. I appreciate everybody's support here today and look forward to everybody sticking around. We have about 24 cars that are going to participate in the open test tomorrow and looking forward to the 2002 season. Thank you.

MK:
Brian Barnhart is vice president of operations. Ken Ungar is vice president of business affairs and both of them are here to answer questions. We want to know before we take questions, we're transcribing this press conference, so it is very important to not simply yell out a question or start talking until we get a microphone in front of you so the transcriptionist can get the entire question. Let's start right here. If you have a question, hold your hand up.

The Media:
Ken, this is for you. The folks that you have had as series' sponsors have all gone away. What is your progress on the next potential series' sponsors for full-time naming rights?

KU:
Sponsorship is a reality in sport no matter which sport. Auto racing, as each one in this room knows, is particularly dependent on corporate America recognizing the value of our sport and joining with us in our endeavor. We're extremely happy about Chevrolet, Reebok, Purex, Worldcom, Firestone, a number of companies, blue chip companies, that recognize the value of auto racing in the Indy Racing League in particular.

Reaching a title sponsor for the series, that is something that is an ongoing search. We have spoken to several companies rather seriously. Our goal is to find the right fit, to find a company that believes in our sport, a company that we can help promote their brand so that it is a mutually beneficial arrangement. We're not in a particular rush because we want to find the right fit. So while serious discussions are ongoing, we really don't expect something to come to fruition before 2003.

The Media:
What is your take, Brian, on the average number of cars we'll see at each race?

BB:
I think we'll - I would assume we're probably going to be in the 26 or 27 range in the car count most everywhere we run, which is a good number to run. Obviously we're restricted more than anything else on available pit space like at Richmond and other shorter tracks. We'll not fudge in the interest of safety. And that dictates the number of cars that we can start and, believe me, as I think Gil will find out when he gets there, and Buzz can probably attest, 26 cars at Richmond will be probably very busy.

The Media:
With new engine specs and deadlines have you approached other manufacturers? Can we expect more than three?

BB:
At this point in time we have had some discussion, but nothing to in-depth. Obviously, it is getting late in the year for that. Obviously, in the first of February I think any manufacturer who wants to join and compete on this particular level will have had to previously been working on a program, and at this point in time we don't have any indications that can happen. But, like I say, if they are doing something on their own and notify us by April we could have more.

The Media:
These new chassis regulations, are these cars dedicated to oval race cars or can they be adaptable to road or street circuits?

BB:
All we do is oval track race. We make rules based on oval track racing so they are designed to be as safe as possible for oval track race and that is what the specs are for.

The Media:
No room to maneuver?

BB:
We don't have any desire to make them - our rules are we are an American-based oval track series. All we do is oval track race. Our rules are built for our cars to oval track race.

The Media:
Have you had any discussions with engine manufacturers, with chassis manufacturers for next year?

BB:
We have had more serious discussions with chassis people than engine makers. At this point in time they are getting ready to make an announcement, but we can look at probably one or two chassis manufacturers joining in 2003.

The Media:
Can they join in 2003 season?

BB:
Yes, they have to notify by April 1 as well.

The Media:
Brian, you have got chassis specs finalized for looks like '03 to '05. Do you feel pretty good about your ability to kind of close some of the loopholes that maybe were there initially? Do you feel like you have done enough to prevent costs from getting out of hand?

BB:
I think we have, Curt. I mean, you are balancing cost controls, your ability to enforce rules. And if you look at our competition on the racetrack, both Dallara and G Force have great competition on the track. We have both cars competitive from a speed aspect of it. We are controlling the costs to the competitors in each aspect of it we can. We have got to weigh the ability to have some technological advancement to keep manufacturers interested in what you are doing, but also by controlling the cost to the competitors involved. And I think we have been proactive in that approach, and as we move to the '03 through the '05 formula I think we're going to continue our philosophy of equal playing field on-track and controlling cost to the competitors.

The Media:
Brian, what about scheduling? Is there any thought about extending the schedule maybe to other tracks across country?

BB:
I think at this point in time I think we're probably very happy with the number that we have. Obviously expanding to 15 races this year as Ken mentioned, the California Speedway here in Southern California market, second largest market in the country, going to the Michigan racetrack and expanding our Midwest routes and going to Nazareth as well. We had six successful debuts in 2001, if people remember that. We went to Homestead, Richmond, Kansas, Chicago, St Louis and Nashville for the first time in 2001 and had very successful debuts there adding the three tracks that I previously mentioned there. I think we're getting a number we're very comfortable with. I would think if there is any growth in the future it will be very moderate growth. 15 to 17 is a good number for us to stay at and focus on. We need to work very hard with our Promoters and if we can fill the grandstands 15 or 16 or 17 times a year we're going to be very successful.

MK:
Any other questions?

The Media:
I am the manufacturer of gearboxes, American, local. And I would like to know if there will be an opportunity for us to compete with - was it a monopoly? I think XTRAC is here right now and that we cannot be because of cost, so where we have an opportunity to be able to offer our products?

BB:
We have chosen a contract with XTRAC who has been our gearbox supplier for 2001 and 2002, and we have renewed an agreement with them for 2003, 2004 and 2005 as supplier for gear boxes for the new generation of cars.

The Media:
Thank you.

MK:
Other questions? Anyone else?

BB:
I will add on the gear box front, XTRAC is a very good partner for us and will introduce a gearbox for 2003, 2004 and 2005 and improve the drivetrain.

MK:
Further questions? Ken, Brian, do you have a closing statement or anything you would like to say before we say good by?

KU:
Sure. It is 72 degrees outside, it is a gorgeous sunny day. Hoping for another great Indy Racing League season, but I want to thank everyone in this room for everything they do for Indy Racing as a sport. We're going to have fun this year. It is going to be our most successful year yet, and I want to thank you for all of your support.

BB:
I can only echo Ken's sentiment as well. Appreciate your support here this weekend and looking forward to seeing you out there in the 2002 season. Thank you.