On Carburetion Day, the focus should be on the race track and the teams that make the Indianapolis 500 special.
But it’s also a good time to reflect on the bold moves made by a small handful of people over the last three years that are making this May a truly special month for the Indianapolis Motor Speedway. Those moves have led to revenue increases during a time when many track operators are praying that decreases don’t hit double-digits.
It’d be easy to say the ouster of Tony George as Indianapolis Motor Speedway CEO is what precipitated the current rise in the track’s fortunes.
It’s true that George’s departure is a part of this story. But it’s not the biggest part.
It’s also true that this story is about the rise of George’s former chief financial officer, Jeff Belskus, who has led to a financial resurgence of the storied facility.
But getting to this point began way before Belskus was hired, and took a lot of courage by the board that oversees the track.
This story is about a family-run business and its principals realizing the salad days of open-wheel racing and the Indianapolis 500 had long since passed them by. It’s about the way the Hulman-George clan realized their business must evolve or die.
Sure, the Indy 500 has always been profitable and still attracts more than 300,000 ticket-buying fans a year. But there’s also no denying that in recent years—really, since the open-wheel civil war of 1996—that attendance and TV ratings have been down. And with that, hospitality and sponsorship revenue also atrophied.
As you’ve probably realized by now, this post isn’t about the death of open-wheel either. It’s about a family recognizing they need help to keep it alive and thriving. It’s also about the realization that without a healthy Indianapolis Motor Speedway and Indianapolis 500, the death of IndyCar racing—in fact all North American open-wheel racing—is likely imminent.
This is a post about how Hulman-George family members realized they must broaden their thinking. And to do that, they had to take several mammoth steps to break with tradition. To break that tradition and take the sport forward, the Hulman-George family realized it had to loosen the tight grip the family’s inner circle had on the high-profile family-owned business.
It’s true that the revolution started by making a change at the top. It was a painful, yet necessary step to take this business forward. Feelings were hurt, and I imagine, relationships among those in the Hulman-George family were damaged. But the business of the Speedway—and its sister company, the IndyCar Series—have been raised.
And this is also a story about healing.
Tony George is no longer head of the operation. But he is on the board. This is a board that has in recent years decided to significantly expand itself beyond familial borders.
Shortly after George was replaced by Belskus in 2009, several board members were added to the mix, notably LDI Chairman Andre B. Lacy and former Anthem Chief Financial Officer Michael L. Smith. Before that move, the board was largely run by Mari Hulman George, her three daughters, and son, Tony.
Indiana Pacers President Jim Morris and Central Indiana Corporate Partnership CEO Mark Miles, who chaired the 2012 Super Bowl Host Committee and is former CEO of the ATP Tour, were added this year, as was Belskus.
When I asked Lacy why he had been added to the board overseeing the Speedway, he deadpanned: “Everybody needs a boss.”
It was clear, the inner circle had been broadened by a new thinking—and a new level of checks and balances.
At first, Belskus seemed awkward in public and uncomfortable with the media. Quickly it became apparent he was serious about following the new board’s primary objectives: Cut expenses and raise revenue.
By 2010, it became clear that Tony George was just the first sacred cow to be sacrificed on this business-bolstering pilgrimage. Belskus worked hard to make the staff leaner and the bottom line beefier.
Many in the Hulman-George family remain in key positions. Jared and Kyle Krisiloff hold director level positions, and Tony George Jr. is heading up Indy Lights, IndyCar’s primary feeder series.
Belskus makes no apologies for the revolution he took part in.
“Our traditions are important and we want to continue them, but sometimes we can’t,” Belskus told IBJ earlier this month.
Board members, to their credit, have not micro-managed. They gave Belskus broad directives, but they left it up to him on how to achieve those. He wasn’t bashful about sacrificing some of the Speedway’s longstanding traditions.
Tony George, who was the first soldier in this revolution to fall, deserves part of the credit for the change in direction. He resigned from the board shortly after he was fired as CEO. But he returned in 2011. And though there was much speculation about what he might try to do as a board member, it doesn’t seem as if he’s tried to interfere with Belskus or the new direction he’s taken the track.
And Belskus has made some dramatic changes.
Last year, Belskus hung corporate signage along pit lane. This year, he made the bold move to sell wall space in turns three and four to Fuzzy’s Ultra Premium Vodka and Shell Oil Co. It was the first time such ads were hung at the Brickyard.
Also this year, NTB, a national car service and retail outlet, will have signage in the grass at turn one and signage will be hung on the back of existing video boards. Also firsts at the vaunted Speedway.
IMS’ opening up of areas previously off-limits to advertisers has created a swell of interest among marketers. In addition to Fuzzy’s, Speedway officials signed new deals this year with Continental Tire, Nissan, Visit Florida, First National Bank of Omaha, 5-Hour Energy, Farmers Insurance, Nationwide and Banana Boat.
Belskus told IBJ he expects a strong double-digit increase in sponsorship sales this May at the track and a possible 10-percent plus increase in total revenue for this year’s Indianapolis 500 over last year.
IMS Chief Sales and Marketing Officer Mike Redlick said “there’s been a change in philosophy” at the track. At the heart of the change, said Speedway executives, is creating an event that is more friendly toward the track’s corporate partners.
It seems like such a simple idea. But it’s taken a dramatic shift in thinking and a risky break with tradition to get here. So far, Belskus—or anyone else I’ve talked to—hasn’t heard any backlash over the changes.
“People understand that sponsorships and advertising are a part of racing and sports,” he said. “Lucas Oil Stadium and [Bankers Life] Fieldhouse are full of corporate signs. As long as we don’t block anyone’s view or disturb the experience, I don’t expect many complaints.”
Belskus is promising to make more dramatic changes in the months and years to come.
This is a story about change. It’s a story about growth. It’s a story that three years ago I would have sworn somewhere along the line would have an ugly outcome. I thought it might even end up in court.
While the IMS and IndyCar Series, and the people that run these enterprises, still have challenges before them, things are largely turning up.
And with the green flag in sight, the leaders of this 103-year old facility are yelling “go, go go!”