Sports Business

Speedway waits to renew deal with Formula 1: New date puts Grand Prix up against World Cup soccer, IRL and NASCAR races

February 13, 2006

The long-term future of the U.S. Grand Prix at Indianapolis may hinge on a littleknown American driver and a soccer match several thousand miles away.

Indianapolis Motor Speedway officials said they will keep a close eye on attendance for the July 2 race before deciding whether to negotiate with Formula One brass for a new contract to bring the race back. This is the final year in a two-year contract extension F1 czar Bernie Ecclestone signed with IMS President Tony George.

The race, which has been held on IMS' 2.6-mile road course since 2000, hit a major pothole when all but six cars pulled out after the parade lap because their Michelin tires couldn't handle the highspeed turn on the Speedway's famed oval. The global audience left in disgust.

The Michelin blowout couldn't have happened at a worse time. Attendance at the event-which was estimated at 225,000 at the inaugural race-had been declining for several years before rebounding in 2004. Attendance seemed to stabilize at about 120,000 before last year.

"I hope the fans will forgive and forget," said racing legend and former F1 driver Mario Andretti. "It looked like F1 racing had gained some real stability with the event in Indianapolis before last year. Now they have an additional hurdle to get over, but I still think the event can succeed."

Michelin has agreed to pay for 20,000 tickets to be distributed to disgruntled fans from last year. Speedway officials are giving fans who paid to renew tickets from last year's race two additional free tickets. If the Michelin supply runs out, Speedway officials said, they'll supply the rest of the complimentary tickets themselves.

But with the World Cup Soccer qurterfinals and semifinals held the same weekend in Germany as the USGP, there's little guarantee the international contingent, which has composed 15 percent to 25 percent of the crowd in years past, will return.

"Soccer is huge in Europe and the World Cup is at the top for every soccer fan, so Bernie didn't do the Speedway any favors with this schedule," said Dennis McAlpine, president of Scarsdale, N.Y.-based McAlpine & Associates, an entertainment and sports business consultancy.

The USGP also must compete for American race fans with the Pepsi 400 NASCAR race-which draws 170,000 to Daytona Beach, Fla., plus a large television audience, and an Indy Racing League race held in Kansas City the same weekend.

"This is such a critical year in terms of gaining support for that event, and it looks like their back to a great extent is really up against a wall," McAlpine said.

The USGP was pushed back two weeks from its 2005 date to coincide with the Canadian Grand Prix, which is held the week before the race at Indianapolis this year.

Closely following the Canadian event lowers the cost for promoters of both races, who are responsible for paying teams' travel expenses. It also cuts down on logistical headaches for teams and potentially captures European fans already in North America for the Canadian event.

IMS President Joie Chitwood admits there are scheduling challenges for this year's event, but said renewal response thus far has been positive. Chitwood is optimistic the event will remain profitable for the Speedway.

"We not only have to contend with Formula One's scheduling constraints, but our own schedule as well," he said. "But the event continues to make sense for our business.

Chitwood said the Speedway will start marketing the event in the spring, but will not make major changes to the marketing campaign in light of the disastrous 2005 race.

"We're hoping to make 2005 part of the past and nothing more," he said.

One of the elements likely to be emphasized in the upcoming marketing campaign is Scott Speed, who was plucked out of the U.S. go-kart circuit and is competing in his first year in F1. Speed is the first American driver to attempt racing F1 since Michael Andretti in the early 1990s.

"There's a lot of national pride surrounding F1, and Scott Speed could really give Americans something to cheer about," said Derek Daly, a locally based motorsports analyst and broadcaster who also raced in F1 from 1979 to 1982. "Scott is very gifted and I think his development could really give this race and all of Formula One racing in the U.S. a big boost."

"What better story line could you ask for in many ways?" McAlpine said. "An American hero in the making against the best drivers from around the world."
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