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IndyCar suit seeks millions from Brazilian promoter

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The IndyCar Series has filed a lawsuit against Radio e Televisao Bandeirantes Ltda., the promoter of an IndyCar race in Sao Paulo, Brazil, seeking to recover a seven-figure sanctioning fee that was due this summer.

The case was transferred Dec. 12 from Marion Superior Court to a federal court in Indianapolis.

Despite troubles with the promoter, IndyCar officials haven’t given up on returning the series to Brazil.

Mark Miles Miles

Though the lawsuit doesn’t reveal how much IndyCar is seeking and series officials are not commenting, a source familiar with the sanctioning agreement said IndyCar is seeking just under $10 million for the annual sanctioning fee.

The Sao Paulo race brings in about $2 million in annual profit for the IndyCar Series and would be a painful loss for the open-wheel circuit, which hasn’t yet turned a profit in its 18-year existence. A source with close ties to the series said the Sao Paulo race is the second-most-profitable event for the IndyCar Series, behind only the Indianapolis 500.

The race also is important because some of the series’ most popular drivers—including 2013 Indianapolis 500 champion Tony Kanaan and Helio Castroneves—are Brazilian, and “Brazil is a strong motorsports market and the series has several sponsors there,” said Zak Brown, president of Just Marketing International, a Zionsville-based motorsports marketing firm.

In 2009, IndyCar officials signed a deal with Radio e Televisao Bandeirantes to hold the race in Sao Paulo through 2014. That deal, the lawsuit says, was later extended through 2019.

While the race seemed to be a significant moneymaker for IndyCar, motorsports analyst Derek Daly doubts the race was making much money for the promoter.

“If this race was financially viable, in any way financially successful for the promoter, you wouldn’t have this lawsuit and it would still be going on,” Daly said.

According to the lawsuit, officials for Radio e Televisao Bandeirantes told IndyCar officials they could not hold the race due to planned road work and closures where the race had been held. IndyCar officials argued in the lawsuit that the promoter has a contractual obligation to find another suitable place to hold the race if the original course was unusable.

“You don’t just shut down a successful event due to some venue problems,” Daly said.

Radio e Televisao Bandeirantes officials did not return calls seeking comment.

When Hulman & Co. CEO Mark Miles unveiled IndyCar’s 2014 schedule in October, he said the street race in Sao Paulo might still return, but is not part of the schedule now. IndyCar officials this month told IBJ that Miles is still holding out hope the event can be held in 2015 if not in 2014.

In 2013, the Sao Paulo race was held the first weekend in May. That date isn’t possible this year since the series is holding its inaugural IndyCar road race at the Indianapolis Motor Speedway May 10.

rop-indycar-122313-15col.jpg The street race in Sao Paulo, Brazil, is one of the most profitable for the IndyCar Series, nettting about
$2 million a year. (AP photo)

The Brazilian promoter’s contractual duties included organizing and promoting events related to the race and securing the track where the race would be run. As part of the agreement, the promoter got the rights to “commercially exploit various aspects of the Brazilian race,” according to the lawsuit.

In exchange for that, the lawsuit claims, the promoter agreed to pay a series of sanctioning fees.

The lawsuit claims that, in early July 2013, the Brazilian race promoters were informed by Sao Paulo Mayor Fernando Haddad that part of the course run on city streets would be unavailable due to road construction. Haddad, the lawsuit claims, wrote in a letter that the race could still be held, but the course would need to be altered and/or relocated.

Radio e Televisao Bandeirantes officials instead, the lawsuit claims, traveled to Indianapolis and informed IndyCar officials that the race could not be held in 2014. Miles claims in the lawsuit that he reminded the promoters via a letter dated July 31 of their contractual obligations.

Miles suggested the promoter work with Sao Paulo officials to find an alternative street course.

Meanwhile, IndyCar officials claim in the lawsuit that two sanctioning-fee payments due Aug. 17 and Sept. 17 were never paid.

Though IndyCar in its lawsuit is asking for a jury trial, officials would likely prefer a settlement that allows for the race to continue.•

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  • Haapy New Year
    I went to no AOW races last year. I have wads of ca$h that I want spend on it all but I will not. Mark Miles stinks, IMS is a rotting pit and this blog stinks. The DW12 is a death trap and the The series is a sponsorless joke. Brazilian sponsors should keep their cash, IMS is a money pit.
  • Chris makes empty promise
    everyone knows those two tracks and all others are never coming back. Unless there's a Road America in Guangchang China
  • Hey Chief
    Wake up and smell the future baby. NFL football is tops in America and open wheel racing listened to an independent report about how to get better. The plan can work if guys like you participate and attend races. I went to Alabama, Indy, and Baltimore last year. How many races did you attend? When Road America and the Michigan 500 come back, I will add those to my road trips. Good times, tasty beers, and racing. I love America!
  • Stop the Haters
    Stop with the whining and hate. Give Mark Miles a chance to be successful. You sound like a France family member or ESPN trying to bring down the IndyCar party. Positive change is difficult, but it is happening. Jump on board and be a part of the future of IndyCar.
  • this guy is an idiot
    why don't you spend your time over at nascar you seem like you would fit in perfect oh by to way us indy car fans love to dw12
  • CREEPY!
    Those black eyebrows and white hair just give me the creeps! Can you say "grecian formula for eyebrows?"
  • Not profitable?
    Bwahahhahhahaha! 18 years of not being profitable, and they are locked into the worst TV contract PLUS most ugly and poorly designed maiming open wheel cars in HISTORY. Mark Miles is destroying the Indy race so the Boston Consulting Group can look like the $1.2Million was money well spent. MARK...quit already, will ya? Mario Andretti sez you are doofing up everything. Seriously man, you are in way over your head. This road course race is NOT going to replace the Brazil race...LOL, not $2Million that's for sure. Loss of Brazil and poor performing Indy road course race equals MUCHO more millions LOST!! This is a great direction Mark, keep heading this way. Bwahahhaha, Happy Holidays to all you Indy lubbers, sycopats, yes-men and paid propagandists. Deathblow 2014 is dawning and the new cladding is being glued onto the sides of the DW12 as we speak. That's a joke in it's own right....

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    1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

    2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

    3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

    4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

    5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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