Toronto race sponsorship in doubt?
Johnstone also said he was notified in mid-December that Steelback Breweries would not be back as the title sponsor for the race. But Johnstone said he is well on his way to landing a new title sponsor.
"It's going well. I'm very pleased at where we are at this point," he said. "We are well down the road with several candidates."
The deal with Steelback — which took top billing after Molson withdrew its support after a 22-year run — was estimated to be for $500,000 cash and a further $500,000 in promotional spending. Johnston admits it is a big commitment but he's confident it will be a done deal sooner rather than later.
The issue with Tracy is another matter all together and not one that Johnstone will have any input in fixing.
Although prior to assuming his role as CEO of the Toronto race, Johnstone was Tracy's Canadian agent, he said he won't be involved in any way with getting a new contract for the Scarborough native.
"I can't speak on anything regarding where negotiations are right now between Paul and Forsythia (Championship Racing)," Johnstone said. "I am not privy to those anymore."
But he did say that having Tracy in the race was vital to its success. It's huge," Johnstone said. "To have a local hero like Paul and as many Canadians as we can get in all of the series is good for business. But from an event standpoint to have Paul here in July is absolutely important."
Tracy signed a five-year deal with Forsythe in 2007 to keep him from jumping to NASCAR but with only one win in the past two seasons the team is now asking for a renegotiation of that contract for less money.
And those close to the 38-year-old Tracy say he is both hurt and angry. Angry enough, apparently, to put out feelers for a job in the rival Indy Racing League, although that could not be confirmed yesterday. Toronto Sun
12/19/07 This rumor is upgraded to 'fact' today. Sputtering Steelback Breweries has spun out of the Grand Prix of Toronto.
The Grand Prix Association of Toronto confirmed yesterday that insolvent Steelback won't be the title sponsor for next year's car race.
"Steelback will not be returning as our title sponsor," said association president Charlie Johnstone.
Wasanda Enterprises, which has financed money-losing Steelback Breweries and related beverage producer D'Angelo Brands Ltd. since 2002, gained court protection from creditors for the two companies last month.
Court protection under the federal Companies' Creditors Arrangement Act negated all contracts with the two companies including the four-year sponsorship deal for the Grand Prix, according to Johnstone.
"We had been optimistic about them continuing until we saw the extent of their debts in published reports," Johnstone said.
Steelback and D'Angelo Brands owe Wasanda more than $120 million in loans and interest. Court filings show Steelback's spending on marketing and promotion far outpaced its beer revenue.
The brewery, which is a small player in the Canadian market, secured title sponsorship of the marquee summer event on Toronto's western waterfront for an undisclosed sum last March, replacing long-time sponsor Molson Breweries.
Sponsorship gave Steelback naming rights, extensive promotional opportunities and exclusive control of beer sales at the event and other accompanying festivities.
Johnstone stressed that even without Steelback, the event will proceed July 4-6. About six parties have expressed interest in becoming the event's title sponsor since Steelback's troubles emerged, Johnstone said. "There's a lot of interest out there," he said, without naming any of the inquiring companies.
Johnstone said Steelback has no debts with the Grand Prix. A creditors' list in Ontario court shows claims from numerous other sport-related entities, including the Toronto Argonauts football club, the Ottawa 67's junior hockey team and the Steelback Arena in Sault Ste. Marie. Toronto Star
12/06/07 Two big companies are already kicking the tires of the Grand Prix of Toronto for title sponsorship rights because of the financial uncertainty engulfing Steelback Breweries, says the race's president.
Charlie Johnstone, president of the Grand Prix Association of Toronto, revealed yesterday the unidentified "blue chip" firms contacted race organizers and expressed interest soon after Steelback, this year's title sponsor, moved under court protection from creditors last month.
"We are actively pursuing those opportunities," Johnstone said in an interview.
Title sponsorship gave Steelback naming rights, extensive promotional opportunities and exclusive control of beer sales at the event and other accompanying festivities.
Regardless if Steelback pulls out, Johnstone said, it will not jeopardize the marquee summer event on Toronto's western waterfront.
Wasanda Enterprises, which has financed money-losing Steelback Breweries and related beverage producer D'Angelo Brands Ltd. since 2002, gained court protection from creditors for the two companies under the federal Companies' Creditors Arrangement Act. Wheels.ca
11/21/07 The restructuring of insolvent Steelback Breweries is raising questions on whether the company can meet some of its sponsorship commitments, but an organizer for a major car race here says there won't be any change at his event.
Charlie Johnstone, president of the Grand Prix Association of Toronto, said yesterday Steelback's new management has assured the venerable July race that "it's business as usual" in maintaining the company's title sponsorship.
Johnstone said he is set to meet next month with the Sherman family whose Wasanda Enterprises controls Steelback and D'Angelo Brands, a related insolvent beverage company.
"I don't have any reason to expect that they won't go ahead with the sponsorship," Johnstone said, adding that the Shermans "love the event."
Earlier this year, Steelback trumpeted a new four-year contract for naming and so-called pouring rights for the auto race, which was known as the Molson Indy for many years.
However, Wasanda gained court protection for Steelback and D'Angelo from creditors last week so it can restructure operations. The companies have piled up more than $120 million in debt and interest to Wasanda in the past five years.
Jonathon Sherman, Steelback's chief executive officer, said the brewing company has cut staff and marketing costs and stopped production of four of its lowest selling brands. The company brews 11 different beers at its small brewery in Tiverton. But Sherman said those efforts are not enough and the two companies "must be substantially restructured."
Johnstone said Steelback has not missed any payments for the Grand Prix and it would be premature to contact other companies to become title sponsors.
However, one sports industry source said Steelback has defaulted on other marketing commitments.
"They stopped payment on all cheques and are not returning calls," the source said.
If Steelback does back out of its auto racing agreement, Johnstone and others will have a tough time finding a replacement, sponsorship consultants say.
"It's going to be pretty tough to go back out and sell a naming-rights title now," said Bob Stellick, a Toronto sports marketer. "It's not a good day for any of those guys."
11/05/07 This rumor is downgraded to 'false. “We have a solid three years remaining on our contract with Steelback and expect to be working with the same management team moving forward. In fact, I’m meeting with the new President and his CFO later this week. It’s business as usual in Toronto, and we’re looking forward to the 2008 Steelback Grand Prix of Toronto." Charlie Johnstone, President & CEO, Grand Prix Association of Toronto
11/04/07 A good article on Frank D'Angelo. He's quite a character.
11/02/07 Frank D'Angelo is due to go to court for a rape charge this fall. Barry Sherman has been funding the game for the past two years. Without Sherman there would be no Toronto Grand Prix sponsorship.
11/02/07 Frank D'Angelo, the man behind Toronto race sponsor Steelback, has sold his majority stake in his Steelback Brewery as well as D'Angelo Brands, the juice-cum-power drink company that brought us DUH! (the can on my desk says it's 710 ml of highly sugared pomegranate cream soda) and Cheetah (a "power surge" energy drink promoted by the sprinting cheetah himself, Ben Johnson).
Yet D'Angelo insists he has never been happier in his life. "I'm moving up to chairman," he says. "I've decided to slow down."
This line is made problematic by the fact that D'Angelo is "excited to announce" that Jonathon Sherman, the 24-year-old son of Apotex Inc.'s Barry Sherman, is moving into the CEO's office. Given what would appear to be an absence of deep knowledge in either beer or apple juice, it's fair to wonder what it is that young Mr. Sherman, a graduate of Columbia University (it says so in the press release), can bring to the job.
"He's been working on and off with the company for the past year and a half," says D'Angelo, who adds that Jonathon "worked a bit at Apotex," the generic drug manufacturer that Barry Sherman built into a colossus.