A message from the President of RSO - November 29, 2004Ray Felice // President Rallysport Ontario // Ontario Regional Director, CARS
I apologize for not informing the membership of RSO before this but I had to wait until all parties involved published their official statements and that only just happened a few days ago.
I have been fielding calls and emails over the past week on the topic of the CARS / RDG termination. All asking what happened? What was my position on it? What are we left with?
So I thought it would be best to post an official response from me directly to the members of Rallysport Ontario to help clarify.
In the 5-year contract there was a clause that allowed either party to terminate the contract after the first year, if notice was given by October 31, 2004.
On Oct. 18/04 the president of CARS asked for and received from RDG an extension to the termination clause date to Nov. 08/04.
On Nov. 08/04 RDG asked for an extension of the termination date to Friday Nov. 12/04.
The President of CARS agreed to this extension as RDG said they were still working out further details of the next few years but were confident a positive answer would come.
On Thurs. Nov 11/04 the president of CARS attempted to contact all the board members. The President was able to reach three of the board members that evening but not myself. I spoke with him on the morning of Fri. Nov. 12/04.
It was on the morning of Friday Nov. 12/04 that the president said he wanted to discuss with RDG three changes that he felt needed to be added in to protect not only CARS but also RDG. He explained the three to me. These can be found on the CARS web site under
News tab in the information bulletin dated, Nov. 18, 2004. I gave my responses on each one verbally on the phone.
-The clause about failing to honour commitments was a protection clause and I did not see a problem discussing it with RDG and get their feelings on it, as it would also protect them in case the series could not put on all the events.
-The clause about RDG consulting with the President on “all matters relating to sponsor negotiations and media campaigns” was in my opinion a bit strong. I said they could inform us, but once they got closer to an agreement or final proposal. Not for every phone call or cold call as this would be a wasteful use of time.
-The third point was that the President wanted to “renegotiate the financial relationship between the parties.” CARS knew at the start of the year we would possibly lose money in 2004 as we had set the budget before having any sponsor agreement in place. When I was told this I mentioned that I did not feel RDG was in a position to do this as they themselves were likely losing money. As some new companies do, it takes a couple years to break out of the red and into the black. It was a five-year plan and contract and I believe that RDG invested a lot of their own funds to keep the plan going with hopes of getting a return on their investment in the later part of the contract. The CARS president even said to me that he did not see how RDG was making money. If this is so, I asked how we could ask for more funds to help out the CARS financial situation. We discussed a possible redistribution of some funds. I also suggested we look at “other ways of generating income for CARS as RSO had to this year when the membership fee structure changed.”
At 8:30pm that evening the CARS office sent out an email to the four board members that were available (one was away and not able to be contacted). In that email it was also stated that it was realized that “if we terminate the agreement, we could be without the funds to televise the CRC for next year and we would risk losing other sponsors as well as Subaru from the sport.” I responded immediately reminding of my thoughts and adding to them and strongly opposing the termination of the contract with RDG. The reasons I stated were that I was certain that if we did we would run a very high risk of losing Subaru completely as they would possibly look upon CARS as being short sighted. I could not have put it more clearly. Why we would not ask for another extension is beyond me.
At 11:14pm that evening the CARS office sent out an emailed letter to terminate the contract explaining, “CARS would like to continue its relationship with RDG in 2005 and beyond. However, there are three changes that CARS requires in the CARS-RDG Marketing and Broadcast Rights Agreement.” The letter finished stating that CARS would withdraw its option to terminate the agreement if a mutually acceptable agreement was reached between CARS and RDG. RDG, after consulting with its partners and sponsors, decided to accept the termination as they were not prepared to make the required changes requested by CARS.
I am truly sorry to see Subaru leave the Canadian Rally Championship. Their support over the years to not only the series but to other competitors was tremendous and will truly be missed. Their team was always helpful to others in need and the management, drivers and co-drivers were all first class.
We now must look forward to 2005 and put on the best championship we possibly can.
CARS is actively seeking a new marketing company to assist in securing new sponsorship for the 2005 championship. We are also working on contingency programs to further assist the competitors.
Ray Felice
President Rallysport Ontario,
Ontario Regional Director, CARS
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