Michael Andretti's potential purchase of the Grand Prix of Toronto is in jeopardy unless municipal, provincial and federal governments can come up with a $2-million aid package to make event viable again, numerous sources have told Sun Media.
Andretti-Green Racing's first right of refusal agreement to buy the race from its former Champ Car World Series owners expires tomorrow.
The race was put on hold this year after Indy Racing League owner Tony George negotiated a unification with Champ Car bosses, but seven-time Toronto winner Andretti has said he has assurances the race could be back on track in 2009 under new ownership.
Andretti, with partners Kim Green and Dennis Savoree, has spent six weeks examining the books of the Exhibition Place race that has been front and centre in Toronto's summer sports picture for more than two decades.
"When AGR did their due diligence they discovered that the race was running a deficit of about $2 million a year," a source close to the group said. "AGR has told Toronto officials that they would want that deficit covered before agreeing to take over the event."
A spokesman for AGR yesterday wouldn't comment on the talks.
The race is said to inject more than $50 million into the local economy, so the politicians charged with coming to grips with AGR's demands are paying close attention.
'A HUGE HIT'
"It would be a huge hit (for the city) to lose the race at a time when the economy is already shaky," another source close to the talks said.
GPT boss Charlie Johnstone said speculation that AGR was seeking a $2-million bailout simply was wrong.
"While it's true that the race has not been a money-maker for some time, our partners see it as a viable business entity, especially with open-wheel racing now being united," Johnstone said yesterday.
Johnstone said governments at all three levels have been involved with the race almost from its inception.
"We are trying to develop partnerships with all of the above to show them that we have a business model that works," he said. "Yes, there are certainly challenges to be faced in promoting an event like Toronto, but AGR is the kind of company that appears ready to take on those challenges.
"I believe -- as do many experts -- that Toronto can be a profitable race."
As for the outcome of negotiations, Johnstone said: "I am cautiously optimistic."
Bob Singleton, a former executive of Molson Sports and Entertainment that ran the event successfully from 1985 to 2004, said yesterday the big expenditures when he was involved stemmed from policing costs and traffic management.
"I agree the province's tourism people should kick in to support the race, because of what it brings to the whole GTA," Singleton said. "But I think it will be a difficult sell to get the city to ante up much more than in the past."
Mayor David Miller and deputy mayor Joe Pantalone are on record as being supporters of the event but that backing could be tested if race organizers come looking for a handout.
There don't seem to be any other bidders waiting in the wings and the current owners of record -- Kevin Kalkhoven and Gerry Forsythe -- are said to be estranged after Kalkhoven orchestrated the deal with George.