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T.E. McHale: Thank you very much. Good afternoon, everyone. Thanks for holding. Welcome to this special CART media teleconference. With us this afternoon is Mr. Joseph F. Heitzler, the new President and Chief Executive Officer of Championship Auto Racing Teams. Joe is the unanimous choice of the CART Board of Directors to fill the post vacated by the departure of Bob Rahal who had served as Interim President and CEO since mid-June. Joe brings an extensive background in television and marketing to his new position, having served most recently as President and Chief Operating Officer of National Mobile Television Productions, provider of mobile broadcasting facilities to more than 8,500 live sports and entertainment events. These included broadcasting of Auto racing, NFL, NBA, NHL and Major League Baseball. Joe enjoyed a 14-year stint as Chairman, CEO and Owner of his own production company, VTE Mobile Television Productions. He is also the founder and CEO of Sports Communications Incorporated, which represented 17 of the 33 sponsors of the 1984 Los Angeles Olympic games. He is former President and CEO at Forum Sports Entertainment, the broadcast entity for all Los Angeles lakers and Kings telecast. And a production executive at CBS Sports where he assisted in the production of USAC and Formula 1 broadcasts. Joe is 56-years old. He and his wife, Saundra, have three sons; James, Chad and Sean. Before we get started with callers, this is, more or less, Joe's first day on the job, while he impressed upon the entire staff this morning a desire to learn as much as he can as quickly as he can, it probably isn't realistic for him to give informed responses to Questions about horsepower reduction, future race venues and the like. Also, we have a large number of callers on the line, and since we do, we'd appreciate it if you could limit yourself to one Question and just a brief follow-up. Question: Are there any changes that you are going to plan to bring to CART?
Question: I think everybody is probably very interested and excited about the coming few months and the coming years. I guess I can just begin by saying my Question would be: What, in particular, motivated you to seek this job? It is a job that at least many of the sort of cynics within the sport have sort of suggested is sort of a job that is too tough or that no one really should want, but obviously you did. And what is it about CART and the job that attracted you?
No. 2, when I looked at the organizational skill chart of CART, I saw tremendous talent and that motivated me to continue as a candidate. And then the third one was I saw the tradition and experience of first the inside directors on the board who were looking for leadership. And then also, with the outside directors, I think when I onducted -- when I was invited back to one of the sessions of the Board as a candidate, I made mention that one of the attractiveness issues to me was the caliber of the outside directors and how they have been able to coordinate this search with the inside directors. When you take a look at the caliber of the inside directors and the caliber of the outside directors, for someone with my skill sets and at this particular juncture of my career, all of those seem to merge with the passion. Everyone seemed to be passionate about making CART change. And I think that would be the way that I would express myself on your Question. Question: You raised the issue of leadership. That's certainly a term that has been thrown around a lot particularly in the last year or so with CART needing more vigorous and more dynamic leadership than it has had. Yet at the same time I remember speaking to a team owner over the summer who was commenting on one of the other candidates. His comment was, in being very complimentary to this individual, and he finished it by saying that he has a great track record as an entrepreneur, but that wouldn't necessarily make him a good employee. I wonder how you balance that issue of the need for leadership with the fact that there are people, many people, in CART, who, in essence, view the president as a quote, unquote, "employee."
Question: I wanted to ask two quick Questions. One, are you moving to Detroit and are the offices going to stay there? And do you have any concerns about CART being a publicly held company? There has been some talk that maybe it would be better off if it was a privately held company?
My wife has done a real good job in the last 20 years of finding suitable residences. And we've had some friends move here to Detroit within the last five months, who are dear friends of ours, and I think that's going to help my wife acclimate here. I will make this further comment on the move: At no time during the course of my candidacy for this position was I concerned about where CART was located. As far as I'm concerned, if a fabulous team of people are in place and the only issue is we're growing out of room space, then we'll either purchase a piece of property, build our own building, maybe put a museum in there. And we'll have a dedicated building for ourselves. As far as I'm concerned, I might as well buy some season tickets for the Tigers. I am going to use T.E. Mchale to get them for us. And I am going to call David Glacier, the ticket marketing guy down there and get some seats. And I am assuming that I can get some seats for the Pistons, right? T.E. McHale: Oh, yeah.
Question: Where are you living right now? Where would the commute be from?
Question: Where would you be commuting from I guess?
Question: In your interviewing process, did you ask for any guarantees as far as freedom of what you could do in this position from the owners? Did you ask for a certain amount of freedom to kind of get the whole show back on track?
Question: Yes, please.
Question: Joe, as well as the issue of leadership, I think one of the things that many people have suggested over the years, in fact, is that CART has, perhaps, lacked a vision of itself as well as a business plan, and a real concept of what Champ Car Racing is all about as far as technology. Do you have any specific views on those issues, on the technological concept of what Champ Car Racing -- on the general vision of what Champ Car Racing is all about and where it's going and the basis of what your business plan would be at this stage, Joe? I realize it is a big issue.
Question: Sure.
The technological issues, I think, was one of the major reasons, and you'll have to talk to some of the Board members on this, but I believe it was the major reason why I may have been particularly appealing to them. And once again, I'm not the kind of individual that talks about myself a lot, so I hope this is the last Question that involves talking about me. I hope you can understand that. I want to focus on CART. The technological is probably one of the reasons why the Board felt that perhaps a selection of my talents would help CART in this leadership area. The technology issue relative to creating recommitted, dedicated fans in the juxta position of appealing to yet known fans is going to be a technologically driven issue. For instance, one of the first meetings I'll be having with several people here is with a company called Sport Vision. In the profession that I'm leaving in coming to CART, I am leaving behind a relationship that was just instituted where National Mobile Television, Sport Vision and NASCAR will be going out on a joint venture that are going to bring these new technologies to auto racing. I think that my insistence that we have to move in those areas, once again, to cause the dedicated fan to become more dedicated and to cause the unknown fan to become dedicated. There are some technologies that are going to allow us to put point of view cameras in the cars, and the viewer will be able to choose the camera that he would like. We may even have up to three cameras. Now an issue here on weight becomes a concern, it's not a concern. The POV cameras probably only weigh six to eight ounces. I don't want to minimize six to eight ounces because someone like Roger Penske or Mr. Ganassi may feel that that is a substantial amount weight. This technology will allow us to take this one full racing product called CART and make it more appealing to our fans. The third area was I think you asked what the basis of a business plan would be? Question: Right.
That leads me to my last point. I asked several of the Board members, they called me to congratulate me on this wonderful opportunity on why they choose me. Four of the ones I talked to felt that one of my skill sets were consensus building without an attitude. And I am going to asterisk that in my life here: Without an attitude. So, I think that's how I would answer the basis for a business plan. It will be unique in that we have to -- you probably wanted me to be more specific -- on a business plan, I think we have to focus on what got us to where we are and what's going to be necessary to take us where we need to go, but we cannot lose sight of the fact that we have to enhance the core product of CART. We can't go anywhere in the future unless the core product is sound and stable. Question: My follow-up, Joe, is that both Bobby Rahal and Chris Pook have told me that there is some possibility and some interest in you're potentially hiring Chris Pook as a consultant to discuss specifically racing issues. Is there any comments that you could make on that on that stage of the game, on the likelihood, Joe?
Question: Yes, of course.
Question: I can here you now, yes.
As to the specific of whether he would be hired as a consultant or not, I hadn't even had the time today to go down to the track promotion department and speak with them and here what they have to say. And one of the issues we are going to deal with here at CART is the level of empowerment at all levels of management. So I will be asking the same Question, Gordon. Question: Very good, Joe. Great. I appreciate your responses. Very interesting. Obviously, you've got some great qualifications. And Bobby Rahal said to me that you he was impressed with the level of your motivation and that you really wanted this job and that was the reason why many of the team owners put this believe in you. Best of luck.
Question: I just want to ask, with your extensive background in television and production, can you maybe make some comments that made by some fellow people on Wall Street that it will be difficult in negotiating your new television contract given the slippage of ratings in the last year. Just with your experience and background what you know coming into the job could you frame maybe where you think things are with the opportunity that the company has?
Question: Could you along the same lines comment, I guess, on the importance of the new venues internationally and some of those venues domestically in relation to helping in those negotiations?
Question: That would be fine. Tom and most of the Board's men have it. A. Thank you for your trust in us with those funds that you invest. And I will ensure you that the Board's concern is the TV area and that is properly placed in the revenue stream here at CART. Question: First of all, two Questions, Joe. One is sort of personal. I know you said you didn't want to answer any more of those, but you mentioned your passion for racing and your involvement on the TV side as a rookie with CBS, but I was wondering when you became interested in racing. Question: And second, there has been considerable talk about the future of the Detroit Grand Prix. And being here, I was curious if you had any conversations about that race yet and what might happen to it after 2001?
Subsequently, my work life involved providing all the facilities and the production services for auto racing and that brings us to the present. The second part of your Question, relative to the Detroit Grand Prix, I am going to have to indulge you here and tell you I'm not up to date on that issue. But I will be, because it is a very important aspect of our business, and I expect to be up to date on that within the next week to ten days. Question: I think it's -- do I presume that the primary issue that you are looking at here is sorting out the television rights of the future?
Question: What do you see as the main strength and weaknesses of CART at the moment?
Question: Good.
Question: Thank you. Question: Joe, did I here you say that you -- it is an advantage that you are not in negotiations with any television concerns at this time? And if so, when did you see getting into the stage where you can negotiate?
Question: Okay. Sorry.
Question: How do you see this progressing then? A. First of all, once again, I am going to say this is my first day here, but obviously this is a Question that was asked of me by the Board. And we're going to embark upon a campaign here with the capable assistance of SFX will be retained as a consulting firm to us. We have an individual there by the name of Michael Trager, who is someone I respect in this industry and have known previous to my engagement by CART, and he and I will be meeting within the next week to ten days and we will be reviewing all the areas necessary to continue with our negotiations. Question: One other thing, looking at your resume' here, World Team Tennis, '78 and '79, and then on to Forum Sports; was that a Murphy-Davidson time with World Team Tennis?
Question: The were gone?
Question: I imagine you going from that to Jack Kent Cooke would be quite an experience. Did you, in fact, work for him?
Question: Uh-huh.
Question: Yes.
I knew Mr. Cooke from a different situation. When I had left Forum Sports Entertainment I then started Sports Communications, Inc., Which represented Olympic sponsors and during the course of that engagement, I purchased a company which Mr. Cooke still owned called VTE. And in that particular case, I can speak to the point that I became very familiar with his business acumen and his passion for the financial aspects of every deal that he was involved in. Question: Passion is the word you use?
Joseph Heitzler: Did you know Mr. Cooke? Question: Yes, and he came from Toronto originally.
Question: Amongst other things. But that was a start, wasn't it?
Question: CART's television ratings have declined significantly in four of the last five years. And they fell by 30 percent last season. You've indicated that effectual technology and the broadcast will help you regain lost viewers and attract new ones. What kind of timeframe do you envision for this process? And also, am I drawing the correct inference from your statements earlier that you agree with CART's expressed desire to produce its own broadcast?
As it relates to agrees to produce, over the last 15 years I've been part of providing all of the facilities and services for some 25 or 30,000 telecasts. And I am most aware of a decline in sports ratings in general, not just in CART. So I would not like to single CART out, that they have a unique problem. This is a problem that we have as an aggregate in the sports business. I think we can witness the utter surprise of NBC on its most recent Olympic ratings. Also we can point to -- I am part of a Monday morning conference call where the first order of business was ratings for the weekend. So we're very much concerned. We're not overly concerned because we know as an industry. We all have to identify this unique opportunity, albeit it's encased in a problematic environment at the moment. As it relates to producing, I go back to that experience for the last 15 years and I've seen where the environment of production and the quality of production has been jeopardized to some degree because of the amount of the rights fees that are being vaunted about in the world that we live in today, in sports rights fees. I believe that if we can work with our strategic partner, the broadcaster, the track promoters, if we have to go from ten cameras that is budgeted by the network and we have to go to 15 because this will enhance the quality of the broadcast and challenge the dedicated viewer and attract the new viewer, then as a team leader and President and CEO in this firm, I would encourage us to invest in our own product and we would supplement that budget with additional cameras, tape machine and replay capabilities. Question: You mentioned earlier viewers having a choice of POV cameras that sound like Bernie Vision that is available in a total of three countries in Europe. Is that where you are headed with that? I am not understanding where you are headed with that?
Question: Joe, welcome, congrats and good luck.
Question: I am just wondering how you feel your extensive experience in the broadcast industry is going to be an asset to you as you step into the new role and who you might look to for any advice or guidance as you move ahead?
Question: Yeah, I'm just curious how your vast resume' of experience in the broadcast, how it's going to be an asset to you as you take the helm of a racing and entertainment organization and who you might look to for advice or guidance as you press ahead?
Question: I am wondering if at any time you established any kind of a dialogue in your dealings in the past with Tony George at the Indianapolis Speedway, and if so, what are your views on that as we move ahead?
Question: Could you talk a little bit about your marketing background that is mentioned in the press release. Obviously your television production background is quite extensive. Could you talk a little bit about your marketing background?
Also at CBS we have a marketing issue about marketing the brand called CBS Sports, and I was involved in that. And I think the one you may be most focused on was the most financially rewarding and highest rated Olympic Games, the 1984 Olympic Games. Myself and my firm represented 17 of the 33 Olympic sponsors for a period of about three and a half years, which is an intense marketing environment. I guess the other marketing experience comes from being able to -- my wife will be very happy that we are moving so I can move all these monitors out of my studio at home -- you know 14, 15 years of watching on average 12 to 16 sports programs a day and how people market there products and how they present there products I feel does rather uniquely to add to my ability to help with the CART situation. Question: You've got about 90 days before the first race of the 2001 series. Bobby Rahal has left things in, I am assuming, pretty good shape, you've got a schedule and things seem to be going pretty well at that point. It doesn't give you an awful lot of time to put your mark on the 2001 series and to basically let people know that you're the new man in charge. What do you see as your immediate priorities before the first green flag drops?
Question: What sort of changes do you anticipate that CART may have working with it's promoters. I know that not only are TV ratings important, but having people in the grandstands is also a continuing issue.
T.E. McHale: With that, we are going to wrap it up for the day as we've been at it for almost an hour. We would like to thank Joe Heitzler for the time he gave us. We had a great turnout today. And we appreciate all of your interest in Championship Auto Racing Teams. Good afternoon to everyone
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