Copyright 2001, Roadracing World Publishing, Inc.
By John Ulrich
This is my personal opinion as a concerned 22-year AMA member, and as a candidate for the AMA Board of Trustees. I may be completely wrong, although I don’t think so.
They say history repeats itself. For AMA members, that’s not good news.
I’ve got a story to tell, a story about a group of guys on an AMA Board deciding to screw over a partner in a road racing deal that ended almost a decade later with AMA members picking up the tab for a $3 million lawsuit settlement and untold millions in legal fees.
It is a story about history repeating itself this month, with many of the same guys on an AMA Board doing close to the same thing, only this time in Supercross.
In both cases, it was all about money. As in, those bastards are getting money that should be going to us.
The first time around, the year was 1993, and a guy named Roger Edmondson was making serious money running AMA’s professional road racing program. Riders were making more money than ever before, with far more paid rides and sponsorship and contingency money available. Never mind that AMA didn’t make any money in road racing before Edmondson came along, and never mind that AMA was now making more money than it had ever imagined possible in road racing, an amount equal to what Edmondson was making. And never mind that the AMA-sanctioned amateur program that Edmondson owned, CCS, brought with it around 5000 AMA memberships a year, at $29 a pop. The AMA guys wanted all the money, including the money Edmondson was making.
So, according to evidence in the subsequent lawsuit, when the contract covering the road racing joint venture between Edmondson and AMA came up for renewal, the AMA Trustees dispatched one of their own—Carl Reynolds–to negotiate and stall while they developed a plan to take over the whole deal and eliminate Edmondson altogether. One minute Edmondson was working on a renewal deal and negotiating in good faith, and the next minute he was out. And when he charged ahead with his own road racing series and signed up racetracks and promoters, suddenly the AMA was there, forming a new for-profit subsidiary and telling the tracks and promoters that the AMA had the factory teams and would schedule AMA Nationals against Edmondson’s NASB races. Edmondson had nothing, and if the tracks and promoters were smart they’d renege on their contracts and sign back up with AMA.
The tracks and promoters did. Edmondson was ruined, and declared bankruptcy. And sued.
Years later, after suffering legal defeat after legal defeat—all spun into “victories” in AMA press releases—the AMA Trustees ended up paying Edmondson $3 million of members’ money to settle the suit, just last summer. The total cost of the debacle—including AMA legal fees and hundreds of thousands of dollars spent to shore up the now-money-losing AMA Pro Racing subsidiary, as well as lost AMA memberships from CCS riders and crew members–is unknown at this time. Many of the Trustees who brought this down upon the AMA–despite having failed miserably in their fiduciary duty to not squander members’ money by getting the association entangled in an unsavory mess, complete with a cover-up and a legal fight it couldn’t win–are now either still on the AMA Board of Trustees, or have moved over to the AMA Pro Racing Board of Directors. And the apparent source of their legal advice, Tim Owens, still has his job as the AMA’s lawyer.
One of those Directors, a lawyer named Cary Agajanian, manages Indy car driver Robby Gordon. A man named Michael Held, who, according to a November 5 AMA press release, “co-owned NASCAR and CART teams with driver Robby Gordon in 1999 and 2000,” is in charge of “Sponsorship Development; Event and Consumer Promotions’ Strategic Alliance Development’ Business to Business Opportunities” for a company called JamSports, described as being “a division of Chicago-based Jam Productions, the largest independent producer of live events in North America,” employing “more than 70 people who produce approximately 1000 events per year. The company’s annual revenue exceeds $100 million.” Another employee of JamSports is Kinnon Marshall, described by the same AMA press release as “the public relations and marketing director for Robby Gordon and Team Gordon.”
Fast Forward to November, 2001, less than six months after the big payoff in the Edmondson case, a case brought against the AMA by a bankrupt former partner, not by a company with 56,000 employees (300 dedicated to motorsports alone) and about $9 billion in annual revenue.
That company, called Clear Channel Entertainment, is making serious money running an AMA-sanctioned professional Supercross Series. Riders are making more money than ever before, with far more paid rides and sponsorship and contingency money available, and Clear Channel is putting up four times the points fund amount it is required to under the terms of its contract with AMA. Never mind that AMA didn’t make any money in Supercross before Clear Channel or its predecessor companies PACE Motorsports and SFX Motorsports came along, and never mind that AMA is now making more money than it had ever imagined possible in Supercross. The AMA Board wants all the money, including the money Clear Channel is making.
So, when the contract covering the Supercross deal between Clear Channel and AMA came up for renewal, the AMA Pro Racing Directors dispatched one of their own—P.J. Harvey–to negotiate and stall while they developed a plan to eliminate Clear Channel altogether. One minute Clear Channel executives were working on a deal in good faith, and the next minute the company was out. And when they charged ahead with their own Supercross series, with long-term contracts already signed with stadiums, suddenly the AMA and its new promoter, JamSports, were there, telling facility managers that the AMA and JamSports have the factory teams and that Clear Channel has nothing, and if the facilities were smart they’d renege on their Clear Channel contracts and sign up with AMA’s new exclusive Supercross “partner,” JamSports.
Specifically, in a letter dated November 5, addressed “Dear Facility Manager,” and sent to stadiums that currently have exclusive, long-term motorsports event promotion contracts with Clear Channel, AMA Pro Racing CEO Scott Hollingsworth wrote, “This letter is to notify you that AMA Pro Racing, sanctioning body for the AMA EA Sports Supercross Series, has entered into an agreement with JamSports, a division of Chicago-based Jam Productions, for the exclusive promotion of AMA Supercross events for the 2003-2009 seasons….Our various championships enjoy support from major manufacturers including Honda, Yamaha, Suzuki, Kawasaki, KTM, Husqvarna, Ducati, Harley-Davidson, Buell and others. The stars of motorcycle sport are made by winning AMA Championships–we look forward to making more history at your facility.”
Looking at Hollingsworth’s letter and the AMA press release on the subject, apparently Clear Channel Entertainment’s existing exclusive contracts to put on Supercross races at major facilities around the country will not be any trouble at all, because, as the release states, “JamSports’ experience in managing large tours in stadiums throughout the U.S. and internationally ensures AMA Supercross will maintain access to all major venues, including those currently on the schedule.”
There are a few things not covered in the AMA press release, one being how it is that AMA Pro Racing can now take credit (“AMA Pro Racing has already found a high degree of success in attracting non-motorcycle-industry sponsors such as…Speed Stick, EA Sports” ) for signing sponsors that were in fact found and signed by Clear Channel Entertainment. Another is what motorsports events—and specifically what Supercross or motorcycle events of any type—JamSports has ever produced.
Also not covered is any indication of exactly what JamSports brings to the table to make up for the 1200 radio stations owned by Clear Channel and used to promote Supercross races nationwide. Nor is there any indication of how JamSports will replace the expertise of a company that produces 26,000 live events per year–350 of those being motorsports events–including 15 Supercross events, 45 Arenacross events, 60 CCS road races, 6 F-USA road racing Nationals, 10 F-USA dirt track Nationals, the British Grand Prix at Donington Park, two rounds of the British Superbike Series at Donington Park and the five-round British Supercross Series.
More than that, what does JamSports bring to the table to offset the motorcycle racing expertise of CCE’s Vice President of Motorcycle Operations, former AMA Grand National Champion Mike Kidd; former professional racers Vice President of Operations Roy Janson, Director of Supercross Todd Jendro, Assistant Director of Supercross Joel Grover, Director of Formula USA Road Racing Bill Syfan, CCS Program Manager Kevin Elliott, National Road Race Series Program Manager Kenny Abbott and countless others? How does turning AMA Supercross over to JamSports’ bunch of car guys and dilettante hobbyists constitute a good thing? Only a fellow dilettante, AMA Pro Racing’s Hollingsworth, could seriously praise JamSports due to “the quality of executive firepower they were prepared to commit to the future of the sport” they don’t understand.
The AMA press release has no mention of the damage this new split in Supercross could do to the sport long term, a la the harm done to open-wheel car racing by the CART vs. IRL situation.
And most of all, the AMA press release doesn’t reveal what this latest brilliant grab for the money—down much the same path taken in the Edmondson case–will ultimately cost AMA members when the lawsuits start flying.
Because make no mistake, there’s a lawsuit slung like a 500-pound laser-guided bomb underneath the wing of a jet ready to launch off the deck of a Clear Channel aircraft carrier steaming in Lake Michigan. The jet’s target is a little scow anchored in the Chicago River and flying the banner of AMA Pro Racing.
There are a couple of names painted on the side of the lawsuit: JamSports and AMA.
And there will be collateral damage when the lawsuit hits, potentially costing AMA members additional millions of dollars in legal fees, jury awards or settlements.
All that’s left is to figure out is how much the bill will be, and when AMA members will have to pay it.
And how long until history repeats itself again.
