Cycle News - Archive Issues - 2000's

The AMA Pro Racing/Clear Channel Divorce iiJfljJiiJ We're looking at the Northeast and Northwest as potential significant additions. We'll seek the advice of key stakeholders to help set our priorities and our schedule. @[J@ fX]{fj@DffiJ[ff) Scott Hollingsworth Does the AMA 0.5_ Supercross Championship have a title sponsor for the 2003 season? If not, do you anticipate Chief Executive Officer securing one? In 1994, the non-profit American Motorcyclist Association formed a for-profit branch called Paradama, which has since come to be known more commonly as AMA Pro Racing. The move was in response to the then-promoting group (comprising Mickey Thompson Entertainment Group, PACE Supersports and SRO Motorsport) announcing the formation of its own sanctioning body, called American/lntemational Racing (AIR). The two parties were subsequently able to arrive at an agreement, but by most accounts, animosity remained. The contract expires after the 2002 season, and AMA Pro Racing has now announced it will go with a new promoter at that time. What factors led up to AMA Pro Racing's decision to split with Clear Channel? The relationship between AMA Supercross and PACE/SFX/Clear Channel - which began 27 years ago, when PACE was one of what would become many AMA Supercross event promoters, and evolved into an exclusive partnership in 1997 - has advanced our sport, and we acknowledge their contributions. Unfortunately, with the expiration of our current contract approaching, the role they were proposing for us would have been incompatible with our mission and the long-term health of the sport. AMA Pro Racing is now focused on the future, not the past. And beginning with the 2003 AMA Supercross season, that future involves our partnership with JamSports [, Entertainment. as a functional, independent sanctioning body. The business model born of this partnership will best position the sport and its participants - for long-term growth. With regard to the current supercross series, what risks does AMA Pro Racing take, and what contributions does it make? Will this change starting in 2003? The risks are the same as those of any business venture, and aren't limited solely to financial risk. Of course, those risks often become more apparent in the context of change. We found it more productive to focus on the opportunities and there are extraordinary opportunities in our partnership with JamSports [, Entertainment. Our contribution involves the commitment of a significant number of personnel managing the sporting aspects of AMA Supercross, both in the field and in the office. More important, however, we commit our brand, its 75 years of history, and the legitimacy it brings to the sport. Oniy two motorcycle-racing brands have global recognition: FIM Championships and AMA Championships. In Supercross, the FIM Championship is virtually nonexistent, leaving the AMA brand as one of the sport's most valuable assets. The press release states that " .. ,AMA Supercross will maintain access to aU major venues, including those currently on the schedule," Is this true? In the coming weeks, we will give your readers an early peek at the venues and markets that we expect to be included on the 2003 AMA Supercross schedule. Stay tuned. Did AMA Pro Racing seriously consider Clear Channel as a promoter for 2003? Absolutely. For well over a year, in fact, we negotiated exclusively with PACE/SFX/Clear Channel. During that time, we made two proposals under which they would have continued to manage the promotion, marketing and television of the AMA U.S. Supercross Championship. It's almost always preferable to work with an incumbent - familiarity often breeds success. Only after it became clear that we needed to look for alternatives did we solicit other proposals. Are you counting on the continued involvement of the factory race teams in the AMA series? We believe the combination of venues, markets, television package, fair and independent rules for competition, business model for participants, and the strength of the AMA Supercross brand will eam their participation and the broader participation of privateers. It appears that JamSports has limited experience in the motorsports field. What was it about JamSports that convinced you to choose them over Clear Channel? The proposal submitted by JamSports [, Entertainment, the largest independent producer of live events in North America, stood out from those submitted by Clear Channel and two internationally known sports-marketing organizations. It was our shared vision, their experience promoting many types of events in stadiums and arenas throughout the country, and their professionalism and integrity, combined with a structure allowing AMA Pro Racing to maintain its role Obviously, it is too early to announce a final schedule, but is it safe to say that AMA Supercross will run during the same general calendar period? Yes. An important part of our mission is to maintain the health of the core sport of motocross. We will not alter the AMA Supercross schedule in any way that significantly and adversely impacts motocross. The press release mentions that the 2003 AMA season will feature "some major media markets not currently on the AMA Supercross schedule." Can you tell us what some of those regions will be? c:ITl!i!iJ ~[j)®DftUiJD@i]®f?@W@D@ Scot Harden Vice President of Marketing & Communiations People tend to concentrate on the Big Four Japanese manufacturers, but KTM has steadily advanced to the point where the Austrian manufacturer is a player in supercross, winning rounds and hosting the halftime-entertainment mini races. Uke Yamaha, KTM does not have a member on the AMA Board of Trustees. We spoke with KTM vice president of marketing [, communications Scot Harden by telephone on Monday, November 12. When did you hear about the news? I got an advance call from John Farris, announcing that we would be receiving documents the next day - the press release regarding the matters. What was your reaction? Well, the initial reaction was, "Oh my goshl" It saddened me because I could look immediately forward to what all the possible ramifications were. Really, my gut kind of sank because I don't see any real good coming from it. What is your main concern? There are a lot of things, first of all, that I don't understand about it. I don't understand the rationale behind the AMA completely. I don't understand why the two sides 10 NOVEMBER 21,2001 • cue I e n e weren't able to [come to an agreement]. I wasn't privy to the negotiation process between the AMA and Clear Channel, and what the issues were there as far as their existing agreement, but it just seemed like, "Why couldn't these two parties work this out?" It's a great relationship. Supercross has gone off in a way that it's never gone to before. Clear Channel has done a tremendous job in promoting the series. We've worked hand-in-hand with them doing the KJMC [KTM Junior Mini Challenge) through this period, We've found over the course of the period that the guys have done most everything right. They've made a lot of right moves, they've invested back into the sport. Was it perfect? No, but I always found that we had clear lines of communication with the people involved. We could talk to people there and get things done. I hate to see that changed. I don't know, I think that's more of a neutral take, and I think this initiative is coming from other areas within the AMA Pro Racing organization. If it comes down to making a decision between two series, how will KTM form that decision? _ s Although the 2003 AMA Supercross season is over a year away, we do expect to announce a title sponsor well in advance. The press release states that "AMA Pro Racing has already found a high degree of success in attracting nonmotorcycle-industry sponsors such as Chevy Trucks, Mazda, Speed Stick, EA Sports, Progressive Insurance, and MBNA to its championships, .. " What role did AMA Pro Racing play in securing each? Over the past several years, we've built the corporate foundation of AMA Pro Racing by investing in skilled professional staff, including marketing expertise. In fact, John Farris, our Vice President of Commercial Development, came to AMA Pro Racing from Chevy Trucks, where he orchestrated the cooperative efforts that brought financial support from Chevy Trucks to individual race teams, the AMA Chevy Trucks U.S. Superbike Championship and the AloIA Chevy Trucks U.S. Motocross Championship. That said, our role varied slightly in each sponsor situation, too many to address in detail. AMA Pro Racing found many of our current sponsors, and some - like EA Sports in 1996 and, more recently, Speed Stick - found us through the power of the AMA brand. From that point, we played the fairly traditional role of designing, developing, and executing marketing programs in conjunction with our promoter partners. Could you shed more light on what your press release calls a "ground-breaking new television agreement" that is under development? How will your future television packages be better than the existing ones? Television will form the backbone of the business model we'll roll out to AMA Supercross teams and riders, including near-term plans to leverage television exposure to their benefit. From the fans' perspective, the television package under development should come as welcome news. We expect to announce the first element of that package soon. Supercross has grown significantly under the current arrangement. How will the new arrangement continue that growth trend while benefiting the various stakeholders and the fans? This conversation has dealt with the business aspects of AMA Supercross, but we never forget the 75-year history of AMA competition - at its heart, AMA Supercross is sport. In the very near future, fans around the country will have better access to "the greatest show on dirt," and the television plan we're assembling should grow television audiences significantly over time. Greater exposure, while maintaining the essence of sport, is a great foundation for growth. Our situation is complicated more so that the other manufacturers, although I'm sure everyone's position in this is really going to be complicated, to figure out what's going to happen. I think a lot more information has to be generated from the AMA's standpoint as far as the series itself: Where? When? But the ramifications are tremendous. What if the AMA runs the series over into outdoor season, if that's the only thing that they can do to get the venues they need at the time they need? There's other situations related to people coming up with AMA licenses and stuff. To my understanding, if you have an AMA Pro license, and if they're thrOWing an event at the same time as a competing organization, you have to ride theirs or it could compromise your status. How does that play out? To complicate it further, we just signed a two-year contract with Clear Channel to conduct the KTM Junior Mini Supercross Challenge through 2003. That's a huge investment from our standpoint for a program that we're real proud of. It's a program that we thought we were going to stop years ago, but the support for it is there. People want to see it; the public wants to see it; the Clear Channel people look at it as good, and they helped us to build that thing. We're with Clear Channel through 2003 on that. Could that playa role in what decision you make? We would look at it from the standpoint that, on the one hand, we want to be where we can have the most marketability for our product. You want to be where the ad base is ' the bang for the buck, as they say, in advertising. Where are you going to get your product promoted the best? It's just a bad deal all the way around.

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