MAY 7, 2003

CART's books

CART has just released its first quarters financial statements and they make fairly frightening reading.

There has been talk for some time about Bernie Ecclestone perhaps buying into CART as a means of expanding his business and helping to get Formula 1 more firmly established in the United States of America. The company has just released its first quarters financial statements and they make fairly frightening reading with revenues up from $5.6m in the same period last year to $6.2m but expenses in the same period rocketing from $7.6m last year to $20.6m this year. This is mainly due to the fact that CART is supplying financial support for the teams, which amounted to $11m in the first quarter. Teams are paid a maximum of $42,500 per car per event in addition to the prize fund. This was necessary to ensure that there were enough cars in the series. CART estimates that it will spend $33m on this in the course of the year. In addition it is committed to spending $16.1m on TV coverage. In the first quarter CART's TV advertising sales brought in only $189,000 in revenue.

There was one extraordinary item in the accounts, the purchase of the organization which runs the Miami GP, which cost $1.2m.

The result of all this was that CART made an operating loss in the first quarter of $14.4m. The good news is that CART still has $70m in the bank.