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Feb 22, 2001

Don't Read Too Much Into Loss Of Wrenchead.com Sponsorship Or Departure Of Becker, F-USA Insiders Say

Copyright 2001, Roadracing World Publishing, Inc.<BR><BR>Pressure is on to mind the bottom line for SFX Motor Sports and the Formula USA National Road Racing Series, but the company remains committed to motorcycle racing generally and road racing specifically despite the loss of road racing series sponsor Wrenchead.com, sources at the company said.<BR><BR>The same sources said that the news that SFX Motor Sports CEO Gary Becker is leaving his post to run PGA events promoted by SFX Sports should not be taken as a sign that SFX is losing interest in road racing.<BR><BR>Becker, who oversaw the rise of the AMA-sanctioned Supercross Series to new heights under SFX promotion, recently made comments to some members of the press indicating that he was dissatisfied with developments in the company's motor sports activities, which some interpreted as being related to the August 1, 2000 takeover of SFX by Clear Channel Communications and a related need to justify all spending, meet all revenue projections and maximize short-term revenue, despite Becker's pre-acquisition promise to invest whatever it would take--including throwing money at the Formula USA road racing and dirt track series--to establish Formula USA as a serious long-term player in motorcycle racing. Long-time PACE Motor Sports and SFX executive Jeff Lewis has been named Chairman of SFX Motor Sports Group, and SFX Motor Sports Group President Charlie Mancuso remains in charge of day-to-day operations.<BR><BR>Sources close to SFX who spoke on the condition of anonymity said that 2001 will be a regrouping year for SFX Motor Sports with a change of emphasis to incremental growth. Although there have been cutbacks, notably a 50 percent reduction in Unlimited Superbike purse and a cut in the points fund to $50,000, the company remains committed to the Formula USA Series, the sources said. But, the sources added, motorcycle racing is a relatively small part of the company's motorsports activities when compared to the large number of monster truck events put on by SFX. Becker spent less time on and paid less attention to the monster truck side of the business than he did on the more glamorous and exciting motorcycle racing part of the business, the sources said.<BR><BR>And in a February 20 phone call to Roadracing World, Becker said that his decision was "an internal, personal issue. It had nothing to do with the business. It had nothing to do with the direction SFX wants to take road racing. It was a personal decision of mine to change the things that are close to me in my life. It was a personal, internal decision related to control of the (overall) business and the direction it's headed in."<BR><BR>Becker went on to say that SFX's motorcycle business is such a small piece of the total to Clear Channel, which is a Fortune 50 company (indicating it is one of the top 50 companies, not just indicating one of the more common top 500 companies), that it is not being closely scrutinized. "The financial considerations of building this property (Formula USA) are not even being looked at," Becker said. "We have convinced them that this is worth investing in." Becker said that he had faced some disappointments in the first year that SFX Motor Sports owned Formula USA and CCS, saying "I won't say that the AMA is the problem in motorcycle racing, but the system is the problem. We're trying to build more riders by having more events. I was very disturbed to see AMA join forces with WERA when we have offered CCS to be part of AMA. They weren't interested. They just don't like us, they don't like our company, for whatever reason," adding that the AMA should recognize what SFX has done with the Supercross Series and should be seeking to grow motorcycle racing by working together with successful promoting companies like SFX Motor Sports and Speedvision Productions (which promotes the AMA Superbike Nationals at Laguna Seca and Road Atlanta). Becker went on to say "This business is going to grow and the revenue it generates is going to grow through the success of the events and through TV."<BR><BR>Becker did admit that starting up the Formula USA road racing and dirt track programs in 2000 "was very expensive. We assumed that throwing a lot of money at these projects would produce more ticket sales at the gate. Finding the right combination is really where we're trying to get to. We had a lot of problems with dirt track and a lot of problems with road racing last year. But we produced every event we said we'd produce and paid everybody their money. We're committed to this in the long term."<BR><BR>Gary Becker's brother, Brian, is Chairman and CEO of SFX, the parent company of SFX Motor Sports Group and SFX Sports. SFX itself is a subsidiary of Clear Channel Communications.