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EARLIER THIS YEAR, CART WAS forced to cancel the Rio 200 after the city of Rio de Janeiro breached its contract and missed its deadline for paying sanctioning fees to the series. The city also failed to provide Emerson Fittipaldi, the 1989 CART champion and current race co-promoter, with access to the racetrack which prevented him and his team from preparing for the race.

Losing out on a race in the huge Brazilian market is a big setback for CART both financially and otherwise. CART has been racing in Rio since 1996, and nearly one-third of CART's 31 drivers are Brazilian, including reigning champion Gil de Ferran. The cancellation of the race caused analysts of CART's stock to slash its first-quarter earnings by as much as 23%. Not only will CART not receive its $3-million sanction fee, but Fittipaldi's $1.8-million debt to the series could also be in doubt because the race will not take place. "This is a great embarrassment for all of Brazil," says Fittipaldi.

CART also received some more bad news when ISL Worldwide terminated the nine-year marketing contract that it signed in 1998. ISL claimed that CART breached an exclusivity clause of its contract, and says that it hasn't ruled out pursuing legal action. Immediately afterward, CART filed a complaint in a Michigan court seeking damages of $100 million and alleged fraudulent inducement, breach of contract, and failure to pay more than $6 million owed to CART. The loss of guaranteed revenues from ISL should further hurt the series' earnings.

However, CART, ESPN International, and Eurosport TV announced that a record number of CART races (18) will be aired on live television in Europe this season. Eurosport, which bought the overseas rights from ESPN, will broadcast all 21 CART races on its Sunday night "American Zone" time slot.

And after an absence of more than 10 years, CART will return to Denver for the 2002 Denver Grand Prix, which will take place on Labor Day weekend. The race will be held on a 1.68-mile track that will circle around the Pepsi Center arena and its parking lots. The race organizers, which include Dover Downs Entertainment and Pepsi Center owner Kroenke Sports, are seeking a seven-year contract with a five-year option.

While most racing fans would say that the sport is already in the entertainment business, CART is about to take an bold step forward into Hollywood. Jay Lucas has been named the series' vice president of sports entertainment and will run a new Los Angeles-based CART office. Lucas will focus on developing and expanding CARTs presence in the entertainment industry and integrating its drivers with other celebrities and entertainers. He will also manage CART's entertainment events, such as the CART Sneak Preview and the annual CART Awards Banquet. One of Lucas' first priorities will be to coordinate CART's promotion of "Driven," which stars Sylvester Stallone and focuses on open-wheel racing, and specifically, the FedEx Championship Series.

Most recently, Lucas served as the assistant general manager of the California Speedway. He has more than 20 years of sports and entertainment experience in the Los Angeles area, including stints with the Los Angeles Dodgers and Penske Motorsports. "Jay's extensive background in sports entertainment and his relationships with media throughout Los Angeles and Southern California make him a perfect choice for this newly created position," says CART president and CEO Joseph Heitzler. "Jay is responsible for developing a strategic entertainment marketing direction for CART, as well as managing that function for all of our racing series."

The Coca-Cola Co. will spend nearly $10 million this year in support of its third annual Coca-Cola Racing Family Reunion promotion. The promotion's grand prize is a lap around the track at Atlanta Motor Speedway with one of the Racing Family's drivers, who were Winston Cup's top six finishers last season. All Coke bottles involved in the promotion will also include a code that provides two free minutes of "Fan Scan," which allows fans to listen in on driver-pit crew communications during races. This spring, Coca-Cola will also market another set of special eight-ounce bottles that highlight individual NASCAR drivers. More than 75 million such bottles were sold last year.

International Truck and Engine Corp., which is a subsidiary of Navistar International, has signed a four-year sponsorship deal with NASCAR. Although approximately one-third of Winston Cup teams use International Truck and Engine to transport their cars from race to race, neither ITE nor any other commercial truck manufacturer has ever been an official NASCAR sponsor. Specific terms of the deal were not announced, but official NASCAR sponsorships generally start out at $1 million or more a year.

The company will also set up the "International Truck Challenge" at three tracks this year, similar to what Mayflower has done in the past. The Challenge will consist of a race course that professional tractor-trailer drivers will be able to navigate, and the fastest time will win a cash prize.

While auto racing has generally been at the cutting edge of sports marketing and innovation, the Texas Motor Speedway recently revealed a plan that would make it the nation's first track to offer club seating. Many tracks have had luxury suites for a number of years, but the Speedway's 3,200 club seats will be a first. TMS is converting 50 of its 200 suites into the Victory Lane Club section, and individual seats will sell for $895 and $995 for the track's series of seven races. TMS is essentially converting what was a supply of 50 vacant suites into as much as approximately $300,000 worth of annual revenues. The price of the club seats will include pit passes, preferred parking, a 10 percent discount on merchandise at the track, and private food and beverage service.

After five years of legal wrangling, the European Union and F1 settled their dispute over the series' broadcasting rights. The EU had claimed that the FIA, which is F1's regulating body [I think this is the right way of describing it], and companies of F1 CEO Bernie Ecclestone engaged in anti-competitive practices. Under the terms of the settlement, the FIA will not take a financial involvement in F1 or other motor sports, and the Formula One Administration will pay the FIA $360 million for perpetual broadcasting rights. The agreement also removes contract clauses that effectively penalized broadcasters for airing other forms of racing.

Longtime F1 patriarch Ecclestone has further had his grip on the series loosened, as a partnership of EM.TV and the KirchGroup has exercised its option to purchase an additional 25% of F1. The partnership now owns 75% of Formula One Holdings' SLEC, and this transaction was valued at nearly $1 billion. Not long after the purchase was announced, F1 carmakers threatened to cream an alternative racing series if F1 follows through on plans to broadcast exclusively on pay TV.