Champ Car Media Conference
Topics: Champ Car
March 7, 2006
ERIC MAUK: Good afternoon, thank you and welcome everyone today's call. We have a very exciting announcement as we head into the 2006 Bridgestone Presents The Champ Car World Series Powered by Ford. Today I am joined on the call by Mr. Carl Russo. The team owner of RuSPORT. We are also joined by Justin Wilson, a third-year driver in the Champ Car World Series. He will be undertaking his second year at RuSPORT. He finished third in the championship last year.
And we are also very pleased to be joined by Mr. John Edwardson who is the chairman and CEO of CDW. Right now it is my pleasure to turn things over to Carl Russo.
CARL RUSSO: Good morning, thanks for joining us; on the East Coast, just barely good afternoon. It's certainly my privilege to be here on this great day. From an announcement standpoint, I won't say much as the news has already hit the wire but just to say the following; that we are proud to have CDW as a partner on the #9 CDW race car driven by Justin Wilson coming forward in 2006.
As many of you know, the first race that we won as RuSPORT, the first race that Justin Wilson won in Champ Car, was the first race that CDW was our primary sponsor. So as far as I'm concerned, this was destined to be, but I won't make more comments than that. I'm going to introduce John Edwardson, who is the chairman and CEO of CDW.
JOHN EDWARDSON: Thank you very much. It is a pleasure to be with you or wherever you happen to be. So the first question is probably why is CDW interested, and clearly, we are interested because we think it will be good for CDW to participate in the Champ Car World Series.
We are a distributor and direct marketer of computer technology in the U.S. and Canada. Our revenues are about 6.3 billion a year in the last 12 months. What we do is a perfect fit for what Champ Car is all about. We sell technology. Clearly technology is very important in racing today. I was amazed by how much it is used and how much computers are used in every single facet of racing.
So we think it is a wonderful fit. It will be good for us as an entertainment venue for our customers and we could not have picked a better partner than RuSPORT to partner with and Justin Wilson as our driver. We do like to win. We have got been a winning company for many years and we are on the Fortune 100 best companies to work for in America. We've been given numerous recognitions about being a winner. So clearly what we're all about is helping the team win.
One of the great things is it won't just be the CDW logo on the car. We are having a CDW technology specialist help the RuSPORT team and help Justin with the adaptation of technology. So we'll be a little more involved maybe than other general sponsors would be.
With that, I do want to add that we have some partners, Hewlett Packard, HP has partnered; Plantronics, Edge Tech and Targus, will be joining us in the sponsorship. We are all looking forward to the summer racing season. I will be at a number of the races and we will have customers at every single event.
And with that, I want to introduce Justin Wilson. We are thrilled to have him as our driver. In fact, that was one of the key elements of doing this was first finding the right partner, and second the right partner with the right driver, and that's Justin, now your turn.
JUSTIN WILSON: Thank you very much. Obviously I'm very excited about the new season and having CDW on board with the team. It's already been mentioned that it's not just a sponsorship program; it's a partnership. And I think the information and the help that the technology that CDW can bring to the team will help us take the next step and hopefully we can go out there and win this year. The idea is to keep improving and try and be the strongest team out there and make the least mistakes on the track. With that, looking forward to the new season.
ERIC MAUK: Thank you very much, gentlemen. Congratulations, Mr. Edwardson, thank you and welcome to the Champ Car World Series. We look forward to a great year and many years down the road. As the announcement that many of you saw today read, this is a multi-year deal with RuSPORT, and real quick before we turn it over to the media, a question for Carl, this is your third year in the Champ Car World Series, last year, first team ever in Champ Car history to be a second-year team with both its drivers in the top five in the final-season standings, and now starting your third year, and to attract a high-profile sponsor such as CDW, tell us a little bit about what that means to your team.
CARL RUSSO: Well, obviously it means a number of things to the team. No. 1, as John echoed earlier about winning, I'll echo it back and say that CDW is the leader in their space. They are the No. 1 in their industry and we think that's important for a number of reasons, not the least of which is the brand names that it brings along with us as partners as you heard John mention. So that's No. 1.
No. 2, applying that technology to the team, it already started last year, actually. CDW started working with us from behind the scenes from a technical consulting standpoint. As you know in motorsports, especially in many Champ Car, where you're professing gobs of information and trying to make decisions realtime, they started helping us do a much better job of collating and moving that information around, and we expect that investment to continue. So on those pieces alone, it means an enormous amount.
But very clearly, to have a stable industry-leading sponsor to join Justin in our effort, means a whole lot for the forward-looking, not just stability of the team, but the performance basis that we're going to be based on. So I can't give you enough words to tell you how positive we are on this partnership.
ERIC MAUK: Congratulations again. We'll go ahead and turn things over to the media.
Q. You obviously put your toe in the water last year and then made this decision to really go after it. Can you tell us, you talked about the perfect fit and utilization of your other brands and components, but can you tell us what the key events or reasons were for you to really make this decision and push forward with this thing?
JOHN EDWARDSON: Clearly what happened in the Toronto market was significant. It was the first event in which we participated. Justin happened to be the winner that day. But the next week, we had a significant increase in the revenues of our Canadian subsidiary as a result of the publicity and reaction, the increased number of phone calls into the company. So that was exactly what we were looking for. What we want to do is more business.
We do believe that the customers of our company and the coworkers at our company will have a great deal of interest in racing. It has been one of the things that has been brought up to me numerous times by our co-workers, and they believe that their customers will be very interested in attending the races.
Q. I won't ask you why you chose to sponsor Justin and RuSPORT, definitely a fine driver and a fine gentleman and RuSPORT likewise. What I would like to ask you the question this way: Why as a Canadian-based firm, a Toronto-based firm, did you not elect to sponsor one of several Canadian can drivers, such as Andrew Ranger or Michael Valiente, Patrick Carpentier, all of whom are struggling to find sponsors so that they can race against a guy like Justin Wilson?
JOHN EDWARDSON: I think the answer is, you know, we are a U.S.-based company with a Canadian division that is doing very well in Canada. And I think the answer is Carl and Justin got to us first. They found us. (Laughter). They did a great job selling CDW. And we had not been out looking to do this at all. It really came to us and they approached us.
CARL RUSSO: Well, I must amplify, with all of those great names and those up-and-coming drivers as well as some significant and seasoned veterans of the series, I for one -- I do believe that inside of our team, we have the two best drivers in the paddock, and as they continue to learn, I think these are the two drivers that are going to take us to the front.
So that would be my answer, but I'm flattered by yours, John.
Q. The standard question that's been asked, to Justin and everybody, what's it going to take to really push and beat Newman Haas, and Sebastien Bourdais this year? What do you see in Justin and RuSPORT that is maybe a little bit different and stronger this year than last? Obviously your second year with the team, you're a little more comfortable with the team, etc., but again, bottom line is, what's it going to take to beat Sebastien this year?
JUSTIN WILSON: I think one of the key parts as you mentioned, is the continuity. It's my second year with RuSPORT, and all of the information, all of the things we learned last year, hopefully we can use that well this year and build from that and be stronger at every race. I think that the team have been working extremely hard all off-season and they have put a lot of effort in. It's now time to put the operation to the test. I think that is the key part, and obviously as we have said a number of times, CDW have also brought some technology to the team, and hopefully we can process all of the information quicker and easier.
CARL RUSSO: In my view, we have given Justin a car to win at every race, so I'm not sure what the issue actually is. (Laughter).
All kidding aside, I'll amplify on what Justin said. The cohesiveness of the team, the culture of the team continues to refine and become more purposeful. I'm very, very encouraged in what I've seen in the entire team and in the key leaders amongst the team, and specifically, how they have started to lead the team more and more. With that, to your answer, you've been around motorsports a long, long time --
Q. Gee, thanks.
CARL RUSSO: Well, you're welcome. Not as long as Gordon. But you've been around a long time and you know that these things happen by a million little details, and those details are executed by people who are inside a good culture and have good processes. I think Justin is going to get to the front more and more this year. I think the team is going to put a consistent car underneath him. We struggled at certain types of tracks, and other at types of tracks, we seemed to have a good combination. We'll have address some of those weaknesses and hopefully maintain the strengths. I'm looking for Justin and AJ to get to the front more and more, and if we do that, the championship is wide open.
Q. Justin, when you came to the United States, did you imagine that after two years, you would be on top of the championship car with the top team and a chance to win the title, because you will win the title, right?
CARL RUSSO: Exactly right.
JUSTIN WILSON: Well, I don't know how to answer that. Obviously I'm very pleased to be a part of RuSPORT and to have the opportunity of trying to win the title. I feel really at home here with the team, and I think the whole team gels very nicely together. It's that that gives us the opportunity to go out there and go out there and try and win races. It's a good scenario and I'm very pleased and privileged to be part of it.
Q. Now a follow-up for Mr. Russo. Carl, how do you consider the staff situation of the Champ Car at the beginning of the 2006 championship?
CARL RUSSO: From my perspective, are you asking about the series, or the competition that we're going to face?
Q. The competition, yes, yes.
CARL RUSSO: You know, I think you've seen the series has formidable competition, and it's the series that has enough equivalence where teams that you might not suspect would do well have done well.
I think you're going to see Forsythe be very strong. I think you're going to see Newman Haas be very strong. I think you're going to see PKV be very strong. I think you're going to see Team Australia be very strong. I think everybody is going to step it up.
Having said that, you know, we've all been working with the same cars for a long period of time. We're learning more about the racetracks. I think the competition at the front is going to be closer than it's ever been. I think it's going to be one of those seasons where qualifying is going to be determined by hundredths of a second, not tenths of a second. I think track position, pit strategy, all of those pieces are going to come to bear, and every little piece of the equation is going to make the difference between not only winning and losing, but being on a podium or not and being in the championship hunt. We're certainly going to try.
And to your question earlier to Justin, I'll echo one piece. As all of you aware, Justin, when he came to the States, he was coming out of Formula I. He had quite literally outgrown Formula I. He could no longer fit in a Formula I car, so they simply had to get rid of him; that's my view.
In my opinion as I've gotten to know Justin and the talent that he has, there's no question whether it was this team or another, that he would be at the front. So all credit to Justin for what he's been able to achieve. That's my view.
Q. Let's go back to that day last summer in July in Toronto where you pulled off the win and the emotion of finally cracking the middle position on the podium, and your mom or dad or relatives were there to celebrate with you, talk about that; and how anxious you are to get back and try to make it two in a row in Toronto?
JUSTIN WILSON: Yeah, it was a great time last year. We came close a couple of races beforehand and to actually pull it off in Toronto was a great feeling. I was kind of wondering what was going to happen to stop me getting that can first win in those last few laps when I was circling around behind the safety car. It was a great time, and I'm looking forward to getting back to Toronto and trying to repeat that. It's going to be quite a challenge, as Carl mentioned already. As each year goes by with the same car, more and more people work out how to make this car quick. So it's going to be a closer, tighter field and it will be a challenge for the driver to come out on top and it will be a great feeling for whoever does that.
Q. Carl, the Canadian contributions to this team are certainly well-documented from team president, Jeremy Daly, (ph) on down. Is Jeremy back with the squad this year, maybe talk about the Canadian contribution to getting this team to where it is?
CARL RUSSO: The Canadians come in a number of forms. We have a number of Canadians on the team. Obviously Jeremy being the president, he is one. And Jeremy is currently in another room eating all of the cookies. (Laughing). Something about the Visa thing, I'm not sure.
But another large Canadian contributor that we talked to earlier was actually the Canadian contribution from CDW Canada, which was why Toronto happened and is I think a very rapidly growing segment of CDW's business. So that to me is arguably as big a contributor as all of the associates of CDW in Canada, I don't even know the number. What's the number?
JOHN EDWARDSON: About a hundred. It was important at the approach, actually, went through CDW Canada as the first available sponsors and then came back to CDW headquarters in the U.S.. we are here because we were first approached about the Canadian race in Toronto and when you win your first time out, it kinds of makes you want to come back for more.
CARL RUSSO: In Canada, by the way, some others, as you're probably aware, Justin's race engineer, Todd Malloy (ph), is Canadian; our shock technician, the wondrous Alex Nishi (ph) is also Canadian. There's probably some others that I'm forgetting. But there's a significant contribution in RuSPORT from Canadians. By the way, there's a significant contribution on virtually every Champ Car team from Canadians.
Q. With the new car coming on board next year, this being a multiple-year deal as I understand it, with a new car coming on board next year and everybody having to learn new setups and all that, will the technology partnership of this deal help your team?
CARL RUSSO: I think there's a couple of things that help the team. Earlier we spoke about the culture of the team and trying to build a learning organization. I think that sets the tone for any time you get a new chassis like that; it's really about your learning rate. But I think you bring up a very astute question, because frankly, we're going to be ripping through a ton of information trying to sort that out. And so there's no question that CDW's expertise is going to help us there. And John, maybe you want to amplify on that.
JOHN EDWARDSON: Sure. One of the things that we do for companies all over America is help them make determinations about what type of equipment they need, how much of it they need, based on what it's going to be used for. So we will have CDW computer field engineers be active, they have already been active, they will get more active, and will clearly have the best technology in the world available. We sell billions of it every year in the U.S. and in Canada, and so we have a big inventory to draw from. When RuSPORT needs something, it will be there the next day.
Q. This is a great announcement today for Justin, anything on the horizon for your other car, sponsorship for A.J.'s car?
CARL RUSSO: Oh, that short guy. The answer is, as we've always stated, when there is news, we'll report it, so there's nothing to report today. But obviously our activities on the team on both on-track activities and off-track activities and our marketing partnership continue without any abatement.
Q. I noticed in the press release that you showed a picture of the car with the CDW logos on it. Are the partnership logos going to appear on that car, as well, Mr. Edwardson?
JOHN EDWARDSON: And the answer is they do, or they will, and they are already on the car. And so as the main sponsor, we get a little more visibility than the others, but HP, Plantronics, Edge Tech and Targus are all on the car.
CARL RUSSO: And just so you know, that picture that was sent out was it actually a computer-generated drawing. As we do the photos from today, you'll get a chance to see the placement as accordingly.
JOHN EDWARDSON: The visibility is very important to our joint sponsors.
Q. I think maybe this is a question for Carl, and that is that since you've been in the series, do you find that it's getting any easier to find sponsorship? Do you think the climate is changing? And I would say from what I perceive, maybe your team has gone the hardest after it and you've been doing the most effort, that's visible, to me, anyway, some may be doing it behind the scenes; maybe could you address that. And the other thing I want clarified is CDW, is this coming from the U.S. as well as Canada?
CARL RUSSO: So maybe John can answer that last question first.
JOHN EDWARDSON: The pockets in the U.S. are a little bigger in the U.S. operation than the Canadian operation, so this is being funded principally from the U.S.
CARL RUSSO: But it involves CDW worldwide.
JOHN EDWARDSON: It involves CDW Canada. And at our two Canadian races, I believe, we will be very visible, three races in Canada this year. And I know I will be at the Toronto race, and maybe one of the other ones.
CARL RUSSO: To your question, on the sponsorship climate and what's happening in that environment, CDW, as you know, prides itself on delivering technology first to its customers. It's what has enabled it, I think one of the key areas, that has enabled CDW to grow at the rate they have grown. John paid us a heck of a compliment when he said we got to them first. So maybe that's the right mesh. Look, you have to be aggressive on the racetrack to win. We believe you have to be aggressive off the racetrack to win, and that aggressive certainly starts in the approach to CDW, but it's not going to stop there. We're going to continue to be aggressive in our pursuit to help CDW win off the racetrack as well.
So your question about the climate, I think the climate mimics the health of Champ Car, and as it continues to grow, that climate improves. So I believe you're going to see a continued success in this environment. I think it speaks to Champ Car's business model where you have very high technology racing where the costs are controlled that puts it in a reach of a broad set of sponsors that can reach a technology-savvy audience. So I think that is going to improve and I can only speak for what we see at RuSPORT, not what the other teams are seeing in the brood sense.
ERIC MAUK: Thank you, that will bring an end to the Champ Car media teleconference today. Again, congratulations to everyone concerned with this announcement today, another very positive announcement as we head to the 2006 season opener which takes place on the streets of Long Beach, the Toyota Grand Prix of Long Beach, which will take place April 7-9.
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