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Wednesday, October 20, 1999



Hawaiian Super Prix

Super Prix got
off to a slow start

Most major sponsors put
together budgets well in advance
of the actual events

By Rod Ohira
Star-Bulletin

Tapa

The Hawaiian Super Prix may have been doomed from the start by one thing: Indy envy.

Championship Auto Racing Teams Inc. announced the cancellation yesterday of the $10 million Hawaii event scheduled for Nov. 11-13 due to the race promoter's inability to meet its financial obligations.

In practical terms, experts blamed two factors.

First, February was too late to find a title sponsor for a November event billing itself as the richest motor race ever, they say.


Refunds

Tickets Plus will mail out refunds to customers who purchased Hawaiian Super Prix tickets. Anyone who does not receive a refund within 10 days should call Ticket Plus at 526-4400 or 1-888-355-4411.


Second, promoters miscalculated the role of pay-per-view television.

Forrest Bond, a Los Angeles-based racing expert, said CART was desperate for a marquee race when it scheduled the Hawaiian Super Prix.

"It's all about Indy envy," Bond said, referring to the split between CART and Indy Racing Team. "CART has been searching for a marquee event. They staged the U.S. 500 at the same time as the Indy 500 and lost. It was a disaster.

"Ten million dollars is a big-deal event. What they didn't stop to think about was the sponsors were already budgeted.

"There was a tremendous amount of negativism, but all they could see was the brass ring."

Yesterday's cancellation came as no surprise to those who have been following the event since it was announced in February.

"Most CART events are announced 12 months in advance to give promoters time to have a marketing plan in place," said Steve Mayer, financial editor of National Speed Sport News. "February is too late for an event.

"Most marketing budgets (for title sponsors) are planned in August of the preceding calender year."


By Ken Ige, Star-Bulletin
A car at Super Prix headquarters at King
Street and Kapiolani Boulevard.



The Hawaiian Super Prix would have had a better chance to find a title sponsor had the event been staged in November 2000 rather than this year, said Mayer.

"Another basic problem is the pay-per-view premise was incorrect," he added.

Richard Rutherford, who was replaced as the event's chief operating officer in August, had initially pitched the concept of pay-per-view revenues from Showtime Entertainment Television to cover the $10 million purse and other costs.

In an Oct. 13 Racefax.com article, Bond reported that Rutherford's concept contained two fatal flaws.

"First, Rutherford has assumed, without any known market research, that more people -- 1.8 million -- would pay $20 to watch the HSP than watch CART's regular-season races for free," wrote Bond.

"In 1998, CART races were watched by an average of 1.1 million people, and using the more relevant cable audience, the average was a mere 606,222.

"Further, Rutherford only cited gross income, i.e., the $20 fee. Assuming the 1.8 million audience which he projected, that would equate to $36 million, but what Rutherford never said -- and perhaps never bothered to find out -- was that Showtime Entertainment Television and the individual cable/satellite broadcasters would take two-thirds off the top, and possibly more.

"Even assuming 1.8 million viewers, HSP was looking at no more than $11,800,000. And that was far less than the combined cost of the CART sanction fee, the prize money, the FedEx charges to ship the cars and equipment to Hawaii, the airfare of team members and their hotel accommodations."

In a telephone interview yesterday, Bond said of Rutherford, "He either knew better or should have known better.

'You've got to have lead time
to pull off something this big.
'

Mike Oakland
OWNER, HAWAII MOTOR SPORTS CENTER

Tapa

"I spent 10 minutes on the telephone with other people and knew the audience figures were flawed. How are you going to get people to pay for something they can watch for free?

"I think (David) Grayson, took Rutherford's word. But somebody's going to take a big hit here because a lot of money changed hands."

Grayson is president of Hawaiian Super Prix and, along with Bob Kachler, a principal investor.

Attempts to reach Rutherford for comment were unsuccessful.

The event, which was to be held at Kalaeloa, recently signed a cable television deal but not pay per view.

Both Mayer and Bond praised the work of Phil Heard, chief operating officer and general manager of Hawaiian Super Prix, and his local staff of 14 employees, who were laid off yesterday.

"I think Heard was kept in the dark," Mayer said. "As the operations guy, it was imperative that he keep moving forward and he did as long as there was money in the checkbook."

At a news conference yesterday, Heard said:

"This is an unfortunate situation beyond the control of our hard-working HSP staff, who was doing an excellent job. Many of our staff, supporters and sponsors put their reputations on the line for the Super Prix and I'm very sorry this had to happen."

Mike Oakland, who has been involved in local motor sports as a participant and promoter for 40 years, said HSP's local staff deserves an "A" for effort.

"The people that were here worked hard and mechanically. They did a hell of a job," said Oakland, owner of Hawaii Motor Sports Center, which operates Hawaii Raceway Park.

"But as a promoter, I know you've got to have lead time to pull off something this big, and without a title sponsor it's extremely difficult. If they'd have said it was going to be held in November 2000, I'd tell you they'd have a hell of a shot."

Gov. Ben Cayetano issued a statement through Jackie Kido, his director of communications.

"The governor was disappointed but not surprised," Kido said. "A $30 million undertaking is no small feat, and he said though the idea was a worthy one, a significant amount more planning would have been necessary to pull it off."

Mayer said a check of financial records showed that Hawaiian Super Prix had spent $4.6 million as of Sept. 9.

"That was prior to delivery of the unassembled grandstand, which costs $2.7 million," Mayer added.



Hawaiian Super Prix



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