Jim Michaelian got so many speeding tickets as a teenager that a judge threatened to throw him in jail if he didn’t sell his Chevrolet muscle car. But that need for speed made Michaelian a lifelong racing fan and led him to become one of the founders of the Toyota Grand Prix of Long Beach 38 years ago. Born in Monterey Park and raised in Alhambra, Michaelian did his first racing at the now-defunct Lion’s Drag Strip in Long Beach, but tried various jobs before settling into the racing industry. He was a conductor on the Southern Pacific Railroad, worked for an auto parts maker and even ran a small chain of bookstores, but said the work was “too sedentary.” Naturally, his next move was to sell the bookstores and invest in the grand prix. It was a risky bet at a time when there were no professional street-circuit races in the country. But over the last four decades, the chief executive of the Grand Prix Association of Long Beach has watched that bet pay off, as the race has become one of the largest outdoor parties in Southern California. Starting out as a venue for European Formula 1 cars, the race now features Indy cars and draws a crowd of some 200,000 over its three-day weekend. Michaelian, who is busy preparing for this year’s event, April 13-15, met with the Business Journal at his Long Beach office to talk about his passion for racing and all the times the grand prix almost crashed.
Question: When did you know you loved racing?
Answer: That’s been one of the passions I’ve always had, even as a young person. As a kid, I remember I would listen to the races on the radio – listen to those engines. My passion hasn’t quelled after all these years. As long as the fire still burns, I’m going to do everything I can to satiate it.
When you’re not planning the grand prix, I understand you’re also a racer.
I race sports cars in endurance races, 12- and 24-hour races. I try to race early in the year, which is the Daytona 24-hour in January, and then I’m out of commission until after the grand prix is over.
Any favorite tracks or races?
I think my first 24-hour race at Daytona in ’97 was particularly exciting. When you’re running these 24-hour races, it’s an integration of all the various aspects – the team, the car, your fellow drivers. You don’t do 24 hours by yourself. But you bring it all together in a very short time. Just to finish the race is an accomplishment. The first time I had the opportunity to do that was pretty special.
What kind of cars do you race?
Ferraris and Porsches. I drove a Porsche 911 GT3 Cup at Daytona. Some Ferrari 430s.
What kind of horsepower?
Those typically have in the neighborhood of 450 horses, but they’re lighter, stripped down.
Top speed?
At Daytona, in the 182 to 185 (mph) mark.
What does that feel like?
There’s a visceral feeling that you’re engaging in an activity where you’re really maximizing your motor skills. I think the real thrill comes just from trying to control a situation that verges on being out of control if you go beyond the limits of the car or the track – or the driver. And there’s also an aural feeling. The sound is as much a part of the attraction – to hear a car accelerating and achieving those kinds of speed.
How long have you been doing this?
I used to drive the pace cars at the grand prix, but I didn’t actually start my racing career until 1992. I was 49 years old.
That seems like a long wait.
Well, when I was a kid I used to go down to the Lion’s Drag Strip in Long Beach and race down there. That was my first sort of formal racing.
What were you driving?
My first car. I worked and saved all my money and I went and bought this 1960 Chevrolet Impala with a hot engine – a 335 horsepower engine, six carburetors. That was my first taste of going out and actually feeling the need for speed.
How’d you get the money?
I worked all the way through high school in an outdoor-sign company. My dad warned me, “Don’t spend all your money on a car.” It was a little over $3,000. I didn’t really have the means for formal racing, so I satiated my passion by racing on the streets every once in a while. Between maintenance and tickets, it was quite an experience.
How many tickets are we talking about?
I don’t know that I recall, but it finally got to the point where I went to the judge and he threatened to throw me in jail, basically. So I volunteered to sell the car. I sold it and got a Volkswagen, and drove that for the next few years to get my record straight.
Do you still drive too fast?
I still have somewhat of a history of that, but I think my racing activity has afforded me the opportunity to spend those energies in the proper environment.
So what happened in the 20-some years between selling your Impala and getting back into racing?
I was raising a family and working on the grand prix. By ’92, the grand prix organization was much more stabilized. We’d made some money and I finally got to the point where I said, “If I’m going to do it, I need to get on with it.” Now I’ve been racing for 20 years.
You studied physics at UCLA. Does that have anything to do with racing?
I’m not a practicing physicist, nor would I claim to be. The explanation for that is I was finishing high school in what we called the Sputnik era. 1958 was when Sputnik first went out and there was a cry across this country to try and recover from that. So they were picking anybody who had a reasonably high IQ and doing fairly well in school to somehow win the battle with Russia. But after a year in the physics program, I said, “Somebody else can go win victory over the Russians.”
What did you want to study instead?
I went ahead and got my degree in physics, thinking it probably couldn’t hurt, but I had my mind set on going into the business world. I’ve always had sort of an entrepreneurial focus. I’m very much a hands-on person. I think there was an affinity toward an occupation that required you to get involved in the various aspects of the business.
Were you doing anything like that in college?
I worked my way through college, but in a different area of activity. I worked on the railroad. I was a crewman and then a conductor on the Southern Pacific Railroad.
You were a railroad man?
I had just started school and I needed the money. They afforded me the opportunity to work a night job. I worked down at the harbor moving cars around in the winter time, and then in the summer I rode the rails. I kept working there for a year after getting my M.B.A.
What then?
Then I worked for Borg-Warner for about a year and a half. They do turbocharged engines and a lot of electronics. But, eventually, they wanted me to go to their headquarters in Chicago. I was not excited about that, so I decided to stay in Southern California.
What did you do?
I hooked up with a friend of mine and we actually ran a small three-store chain of bookstores for about three years. Then there was an opportunity to sell it and make a little bit of money. I could see it was a little too sedentary. I was looking for something a little more active. But the money I made afforded me the opportunity to look at the grand prix.
How’d you get involved with the race?
I was living in Long Beach and I heard from some friends that this gentleman Chris Pook was looking to put on a motor race in Long Beach.
Why was that?
Well, Long Beach was looking for something that would give it some national and international exposure. They had brought in the Queen Mary in ’67, with the aspiration of this being something that would solidify Long Beach’s image and it hadn’t. The idea was to bring the Formula 1 circus to town and give Long Beach an opportunity to showcase the assets it had – which, granted, were a little rough around the edges.
How so?
This was still a Navy town back in the mid-’70s. In those days, there was nothing on Ocean Boulevard except for a couple bars, a couple ragtag old flop houses and X-rated theaters. One of them was where the Westin hotel is now, just east of Long Beach Boulevard, which happened to be the start and finish line. We covered up the (theater) marquee over race weekend.
How much did you invest?
I had a chunk invested. Without going into the details, Chris and I and some others, we were invested in making it work. If it didn’t, we were going to pay the price.
I assume the race didn’t make money right away?
We ran our first race in ’75. It was a test race (sanctioned by the Sports Car Club of America). The Formula 1 circus wouldn’t come until we’d tested the circuit. So we went out and raised $1 million, mostly from ourselves and our friends, to put on that first race, which was just enough to buy the (concrete) blocks, fencing and bridges for the circuit. We were $500,000 in the hole after the race.
Whoa. What happened?
We must have had 60,000 or 65,000 people there on Sunday. I remember I went down to the convention center box office and there was an old gentleman there named Stan who was calculating things. I walked in all enthusiastic and said, “Wow, Stan, there must have been at least 60,000 people here.” And he hit the total button on that old adding machine and cranked it and pulled the tape off and said, “Son, I don’t know how many people were out there but here are the number that paid.” I’ll never forget, it was 37,919. And my heart just sank.
How did that many people get in for free?
In many places around the track, we had gates up, but we didn’t have enough resources or the planning to put security guards at those areas. So a lot of people trampled the fence, went over the fence, jumped over the culvert.
Was the 1976 race any better?
We did all right, but we still lost money. So afterwards, we did something unusual: We did what you’d call an unofficial Chapter 11. Chris and I drew up a list of all our creditors and sat down with them. We offered them 35 cents on the dollar in cash and 20 cents in stock. Of 143 creditors, 141 of them took it, but we had very little cash left. So 1977 was a super cash-flow challenge.
More so than the previous year?
Yes, because now even the people we’d done these deals with wanted to get paid in advance. We were basically taking every dime that came in before the race and spending it as quickly as possible. I remember literally going down to the box office and saying, “How much have we sold today?” “We’ve sold $8,000.” “OK, give me the $8,000.” Then I’d run down to the bank and you’d look to see who was in the bank because people were waiting to get paid.
Like who?
The insurance guy, ambulances, crash truck drivers. It got to be Friday night before the race, at 6 o’clock when the bank closed, and finally there was just enough money to pay the people who had to be paid for the weekend to stay.
How did that year pan out?
1977 turned out to be the pivotal year in our history. Mario Andretti won the race after a thrilling battle with Niki Lauda and Jody Scheckter. It was one of the best Formula 1 finishes around. That helped propel us.
Eventually, you left Formula 1 and started running Indy car races. What happened?
After 1983, our contract with Formula 1 was up for renewal and they came back with a proposal that said they wanted $2.5 million in 1984 for sanctioning. We’d been paying in the $1 million-plus range, but now it nearly doubled. There’s no way I could see how we could make a profit.
For those who don’t know racing, what’s the difference between Formula 1 and Indy cars
Everyone loves Formula 1. It’s got that international flair, you’ve got the Ferrari guys out there cooking pasta. It’s got all that cache to it. Indy cars (are) the same ones that ran the Indianapolis 500. It was more of a domestic series, but it still had some big names. When we switched, Mario Andretti had just started driving Indy cars.
How did that play with the fans?
Andretti came out and won that year, and his son won a couple times in the first four years. It convinced people that if you come to the Long Beach event, you weren’t just coming to an auto race. You were coming to a festival
How is that?
Well, 65 percent of the people who come are not hardcore racing fans. When you go to a race at a permanent facility, you go and you sit in the seat and watch the race. You have to be a kind of dedicated person. But we put a race in your backyard, and it attracts a lot of nonhardcore race fans. It’s a three-day festival that happens to feature first-line racing competition.
So when you’re not racing or planning races, what are you up to?
I travel quite a bit, because of my work assignments. We’ve done projects all around the country.
Projects like?
We do consulting work with many venues. Once we established that running street races in America was a viable proposition, we began to get calls from cities asking, “How do you do it?” So we formed a consulting company. We’ve organized street races in Las Vegas, Dallas, Sears Point up in Northern California.
Do you do any traveling outside of work?
My wife and I just got back last year from going to China. We went to China for 10 days and then went to Singapore for the Singapore Grand Prix.
Do you travel much for your own racing?
The last few years I’ve tried to go outside of the U.S. and race. I’d raced in Dubai, I’ve raced at the Nurburgring in Germany. That’s a challenging track: 15 miles, more than 100 turns. At this stage in my life, I want to try to do as many of the older, more traditional tracks as I can.
Ever had any injuries?
Not substantial ones, thank goodness.
How do you keep it up?
I run, and I use an elliptical machine at my house a couple days a week. Then I lift the other days. I try to keep that routine year round. It has a direct bearing on racing. In endurance racing, you’re staying in the car for extended periods of time. With the heat, you sweat a lot. It demands you stay in fairly good condition, especially because in most cases I’m competing with drivers who are 30 to 40 years younger than I am.
How long do you plan to keep racing?
I’m going to try to keep on doing it for as long as I can and as long as the various sanctioning bodies will allow me to.
What about the grand prix? Do you have any plans to retire?
I enjoy what I do. And as long as I’m physically capable of doing it and the owners are satisfied, I’ll continue on.
Jim Michaelian
Title: Chief Executive
Company: Grand Prix Association of Long Beach LLC
Born: Monterey Park; 1943.
Education: Bachelor’s in physics and M.B.A. from UCLA
Career turning point: Investing in and going to work for the Grand Prix Association of Long Beach in 1974.
Most influential people: Chris Pook, the original promoter of the Long Beach race.
Personal: Lives in Seal Beach with wife, Mary, of 46 years. Two adult sons, Mike and Bob.
Activities: Racing sports cars, traveling with his wife, watching tennis and working out to stay in shape for racing.
