AUGUST 5, 2002
Why Villeneuve could go to CART
Forsythe said that there is "a former CART champion who fits that description". It is possible that Forsythe could be talking about Gil de Ferran but it seems fairly clear that the reference is to Jacques Villeneuve.
Villeneuve's manager Craig Pollock has said that Jacques "has his contract in F1 and has no intention of doing anything else". But then he would say that. Any other response might open the way for BAR to get out of the Villeneuve deal, which appears to be the desire (whether stated or not). If nothing else Pollock's comments will help to push up the price that Villeneuve can demand from Players. Pollock said that to make such a move would "cost a fortune" and that Jacques would only be tempted to make the move if he would be earning more than he currently is at the moment. This is a lot of money as his current deal is believed to be worth $18m a year.
On the face of it Players is not going to come up with a deal like that but the BAT subsidiary (an interesting point) might be convinced to throw in a few extra dollars to help out BAR. At the same time CART could easily kick in money to help the deal happen. CART needs a big boost next year if it is to survive the current battle with the Indy Racing League. In order to attract more coverage (and thus the big sponsors) CART needs to create more interest. Hiring Villeneuve would do that and it is a more effective way of growing the sport than buying TV coverage, as CART has been doing this year.
The current CART stock price is just under $6. This values the company at something like $90m. The share price is not improving and those who have their money tied up in the series are worried. The one advantage they have is that, according to official filings, the company has around $100m in cash. It does not take a genius to work out that buying the company is effectively buying money and getting the assets for free. The problem is that the shares are now largely controlled by a small close-knit group who want CART to succeed. The company might have been delisted by now if that was the course of action planned but it seems that the aim is to build up the company instead.
If the share price goes back up to $17 range, where it was until recently, this would lift the value of the company to around $250m so there is some logic in the argument that CART would invest some of its cash pile to get Villeneuve back.