The announcement that it is exploring strategic alternatives - 'including a possible sale of CART' - finally confirms what everyone knew; CART's future is hanging by a thread.
It marks a remarkable collapse for CART which raised $100m less than ten years ago after it went public.
But it blames declining sponsorship, sanction fee and television right deals for leaving it facing a bleak future.
Said a CART statement: "The company's management strongly believes in the long range future of the company. However, in light of the near term financial challenges facing the company, the company has retained the investment banking firm of Bear Stearns & Company, Inc. to assist us in exploring strategic alternatives that may be available to CART, including a possible sale of the company.
"There cannot be any assurance that this process will result in any transaction or as to the terms and conditions of any transaction that may be proposed to or pursued by the company.
"We expect that remaining cash reserves, cash flow from operations and available bank borrowings will be sufficient for capital expenditures and other cash needs during 2004 but we also anticipate that by the end of the 2004 season our cash reserves will be fully depleted. Management is currently and will continue to seek alternate sources of financing to sustain the company through the 2005 season."
Just last month, CART CEO Chris Pook said he believed the decision to take the company public was its 'biggest mistake' and that the directors took 'their eye of the ball'. He effectively blamed the move for the crisis CART is now in.
For the full story and the reasons behind CART's dramatic move to alert the marketplace of its dilemma, see the features section of sportbusiness.com
