Motorsports insiders think the Brickyard 400’s declining fortunes will hasten the Hulman-George family’s decision
on the future of the Indy Racing League, which the NASCAR race has helped subsidize.
IMS CEO Jeff Belskus, who replaced Tony George in June 2009, said the Brickyard 400 remains “very profitable.”
“It’s a strong event for us,” he said.
Few dispute that, but racing analysts now think the IRL’s losses exceed the Brickyard 400’s profit, and that
could be a major rub for the board that controls the Indianapolis Motor Speedway and IRL.
Belskus
Since the IRL’s inception in 1996, the board, which is four-fifths Hulman-George family members, has used Brickyard
400 profits to support the open-wheel series. But now the Brickyard’s raging revenue stream has slowed considerably.
A feud among board members over money following the 2009 Indianapolis 500 led to the departure of former IMS and IRL boss
Tony George. Now there’s speculation the diminished financial firepower of the Brickyard 400 could lead to other changes.
“The balance sheet is what led to Tony George’s ouster, so you know the balance sheet has [the board's] attention,”
said Zak Brown, president of Just Marketing International, a local firm that represents some of the biggest sponsors in motorsports.
“All the money goes in the same bank account, and they’re writing a lot of checks for IndyCar. You have to believe
they’ve set a firm amount on what they’re willing to spend on the open-wheel series.”
Most with knowledge of Speedway finances think that amount is directly related to what the Brickyard 400 generates in profit.
Belskus said the Brickyard 400 and IRL are “evaluated separately,” but, he added, “a healthy Indianapolis
Motor Speedway is good for the Indy Racing League.”
The Indianapolis 500’s hefty profit is a big component of the track’s health, but the Speedway’s flagship
race doesn’t throw off enough money to underwrite the IRL.
It’s not clear how the Brickyard’s diminished profit could affect the league and, by extension, the Indy 500.
“The problem is, now that Champ Car is gone, what’s the prospect for the Indianapolis 500 without the Indy Racing
League?” said Larry DeGaris, director of academic sports marketing programs at the University of Indianapolis, who has
conducted several studies for motorsports business enterprises. “It’s difficult to imagine they could just abandon
the [IRL]. But who knows?”
IRL CEO Randy Bernard, who took his post on March 1, is hopeful the open-wheel series can break even in 2011 and reach profitability
in 2012.
“I’d like to believe that, but it sounds optimistic,” said Tim Frost, president of Frost Motorsports,
a Chicago-based motorsports business consultancy. “I like what Randy is doing, but he has a steep hill to climb.”
George, before his ouster, said the series must be profitable by 2013 or there would be no 2013.
Though the tight-lipped Hulman-George clan has never divulged financial information, motorsports business experts have estimated
the IRL has lost more than $400 million since its inception in 1996.
NASCAR estimated attendance at this year’s Brickyard 400 at 140,000. That’s down from 270,000 in 2007.(AP photo)
Sources close to the IRL said the series lost $22 million in 2009 and is headed for another eight-figure loss this year.
IRL officials have cut $2 million in overhead in the last year, have raised $3 million in cash annually with a new title sponsorship
deal with Izod, and tallied $2 million in profits from the series’ popular Brazil race, said motorsports business experts.
That still leaves a $15 million hole to close.
Bernard is busy trying to find new markets and raise sanctioning fees to keep the series above water.
The Speedway board, meanwhile, is dedicated to continuing with all current enterprises, including the Brickyard 400 and IRL,
Belskus said.
And Belskus is bent on reversing the Brickyard 400 decline that has seen attendance spiral from 270,000 in 2007 to 140,000
this year. While the Speedway won’t spend more on marketing, he said, most ticket prices will be dropped $10 to $20
and features will be added to next year’s race weekend in an attempt to draw more fans.
“We’re going to invest money into enhancing the experience at the track for people,” Belskus said, “and
making this more of a destination.”
The local NASCAR race certainly isn’t the only one losing traction, but it’s leading the field in its rate of
decline. Fourteen of NASCAR’s first 19 races have seen attendance declines, with an average drop near 20 percent.
Though Brickyard 400 attendance has been halved since its inception in 1994, it’s still one of the biggest races on
the NASCAR circuit, with its 140,000 attendance far outpacing NASCAR’s 2010 average of 99,853.
The Speedway reaps $7 million to $10 million in TV revenue from the race—second in NASCAR only to Daytona. That allows
most revenue from ticket sales, sponsorships, corporate hospitality and concession sales to fall to the bottom line.
Motorsports business experts estimate the profitability of the race for the IMS is still around $10 million to $13 million.
But less than five years ago, it was more than double that.
Ticket revenue has declined more than $10 million and the loss of All-State as title sponsor cost the IMS another $2 million
annually, motorsports business experts said. Factor in revenue declines in concessions, parking and other ancillary revenue
and the drop is approaching $20 million.
Recent comments made by NASCAR CEO Brian France, who said Kentucky Speedway’s desire for a race could affect Indianapolis’
future, certainly haven’t soothed IMS officials’ nerves. For now, NASCAR is dedicated to having a race here in
2011, but since the contract is year-to-year, the long-term prospects are uncertain.
NASCAR officials could be using Kentucky as a threat to leverage a better deal in Indianapolis, but Brown said IMS officials
should be concerned, nonetheless.
“Even if [NASCAR] decides to schedule Kentucky on another weekend, that would have a big impact on the Brickyard 400’s
profits,” Brown said. “I’m sure the race here gets a big draw from Kentucky, and NASCAR is risking oversaturating
the market."•
on Facebook & Twitter
Back to Top
IBJ Conversations
55 Comments
Add Comment
Poor ORP...maybe they should run NASCAR MODS and Midgets that night. Robbing Peter to pay Paul.
Yet, the buffoon who questions actual sources on information presented in Anthony's blog, most likely would question the Star's intent too, and the fact the lack of revenue from the 400 and the failing IRL series are indeed connected.
Anthony, you should quit this paying gig with the IBJ....WORDPRESS is giving out blogs to any twit or psychopath out there and that certainly could threaten your livelihood. All evidence points to the speedway desperate for influx of $$$...all due to the messed up IRL, all these 15 years.
It costs $$$ to run an IRL team and the speedway fronted many, many teams for over a dozen year $$$ to be there and at Indy.
So, some dumbass needs to take much of this hidden quiet money into consideration when trying to understand where $$$ all went. As soon as the exodus from CARt began (complete with THEIR sponsor $$$ etc, and the VISION started drying up ala Tony didn't have to hand out as much). Then you started to see american roots racers like tony Stewart etc. go away from the IRL cause they could make NASCAR $$$.
The IRL propped up the league for about 13 years before Bernie Madoff's faux pax exposed the Speedway emperor Tony as the failure that he always was.....the IRL was nothing but second rate series financed by the speedway and followed by place-fan FOOLS.
That's what chewed up HUNEDREDS OF MILLIONS OF SPEEDWAY MONEY. Then add in all the other expenses, renovations and bootlicker salaries and you have NEGATIVE $675 PLUS Millions spend on the crapwagon series you have today.
Assignment for Business Writers Who Continuously Portend Doom for IMS, IRL, etc.
Filed under: The Defender Blogs â?? defenderoftheirl @ 12:32 am
The Indiana Business Journal employs a Hoosier blogger named Anthony Schoettle who writes critical columns about Indy Car and the Indianapolis Motor Speedway with alarming frequency. The â??sky-is-fallingâ?? theme of his prose generally follows one path: The IMS/IRL is losing money and had better do something positive or something very bad will happen. Specific sources are rarely cited, but Anthony and others like him are always very defensive about being â??well sourced.â??
Most of the time writers such as Schoettle claim that Indy Car has LOST between $400 million and $600 million since Tony George launched it in 1996. I am no economist, but letâ??s think about the math for a moment. Through the end of last season the Indy Car Series ran 187 races over 14 seasons. If you average the speculation of obsessed pundits, cumulative losses of around $500 million might be considered normal. That is a HALF BILLION dollars.
That would mean that the IRL LOST $35,714,286 every single season. At an average of 13.35 races for each season, that would also mean Indy Car would have to lose $2,675,227 every single race. Letâ??s run the numbers sans 14 Indianapolis 500s, because you would have to be a full-fledged imbecile to believe those are not all wildly profitable. In that instance each non-Indy race becomes a $2.9 million loser? Honestly, who is that gullible/stupid?
Here is my challenge for Anthony or any other writer with such IRL/IMS-critical proclivities: PROVE IT. Prove it with hard numbers from credible sources. Credible sources do not necessarily include spurned aspiring IRL CEOs who did not get the job. Those people generally suffer from what I call â??Troy Harrison Syndrome,â?? which results in vulgar, bitter behavior following failure to land a job in Indy Car they really wanted. Other writers who dislike Tony George do not count either. Jeff Belskus would be a credible source. Randy Bernard would be a credible source. Those responsible for fulfilling contracts might be good sources. Disgruntled employees running their yaps generally have credibility gaps.
Avoid â??now there is speculation,â?? â??sources close to the IRL,â?? â??motorsports business expertsâ?? and â??most with knowledge of Speedway finances.â?? Professional writers should know better.
As you set out to prove the Indy Car Series has LOST between $400 million and $600 million over the course of its life here is what you need to do:
Give us an accounting for the losses. What was the money spent for? Itemize the list. Then itemize revenue, including:
-Television rights
-Radio rights
-Advertising revenue
-Sanctioning fees
-Sponsorship revenue
-Stadium signage
-Ticket sales
-Corporate underwriting
-Concessions
-Merchandise
-Manufacturer subsidy
-Creative taxation
-Miscellaneous B-to-B deals
Measure itemized revenue against itemized expenses. Then prove to us how it is physically possible to lose $2.9 million dollars per race for every non-500 without making anyone fall over on the floor from laughter.
In the future, I would also appreciate at least an effort to view IMS or the IRL in the context of the bigger picture. The vast majority of sports and entertainment venues in the country are doing far worse than they were ten years ago. Choices and technology has increased dramatically. As a matter of fact the way in which people communicate with one another has fundamentally changed. The rest of the world has not fared much better than Indy Car. At least recognize the obvious as you hunt witches.
Lost in the incoherent ramblings is the mere fact that a real media insider would be able to refute Anthony's article with actual figures and not speculation, hot air and hyperbole.
Excuse me? cart, and later champcar, oversaw their own self immolation. Why? Because they boycotted the Speedway. The Speedway has been around for over 100 years. You either smartly choose to be a part of it, or stupidly choose to boycott it. Those who choose the former are rewarded; those who choose the latter consistently prove their abject stupidity. That, my friends, is as factual as it gets.
When will the cart contingent of youthful hate enthusiasts finally discover the maturity necessary to be actual fans?
It will get a lot of press but there will be fewer $ for all sports and some will go away.
Berwickguy, who cheered on for the better part of 13 years as the beloved speedway oversaw the destruction of open wheel racing now suggests everybody come together and sing kumbayah for the good of the rotting carcase that remains.
btw- what ever happened to VW/Audi, Hyundai? kia? chevy? I suspect none of them are coming to save the day? LOL.
Accept responsibility for the sports fate, acknowledge the failure of the IRL. Forge forward with a new marketing plan that sophisticates the sport and separates from the gomer-esque policies and practices of the IRL past.
Stop acting like the past never happened...it did, so embrace it...and utilize it for the future.
Seriously, the same pig with different lipstick isn't gonna cut itn 8 plus years.
FINALLY, never, ever alienate the fans of the sport. And never underestimate their interests and needs. This is what the IRL never understood and will forever be associated with.
Open-wheel has some issues, but the merger was a big step, now they just need to retain their key drivers OR even lure some back (Hornish maybe) and build on it.
You sure put a lot of faith into a couple of guys who were not even a blip on the racing radar screen a year ago.
They were ill-prepared to control the sport OR realize what it was going to take to gain control of it. Now, like a boat adrift on a vast stormy sea (without fuel or food), the IRL/IMS rudderless ship wanders aimlessly in search of a port...that they will not find with spec cars and spec engines.
I respectfully submit the FANS of the sport aren't the cause of the failure of IMS and the IRL....it's the fools that own it all. And that will continue ALWAYS to generate opinion and criticism...forever (as Defender so aptly would like to remind us).
Who would have thought that IF the place-fans would have boycotted the speedway in 1996 none of this would have ever happened. Keep shooting for the foot, extremities, head IRL...err, Speedway.
We all know all the bad, past mistakes. To crow about that continually is out of cowardice and foolish mockery. Nothing gets accomplished. In the meantime, there are those associated with the sport, that are smarter than the judgemental types who enjoy swooning over any negative they can find to palter about. We should all be on board to hope that reasonable decisions will be made going forward to enable the enterprises associated with the IMS and the IZOD Indy Car Series to succeed in the future.
If they don't, it will be a sad day for Indiana and certainly not something for the blatherskites to post about with their feckless buffoonery. Perhaps they should find another tree to lift their legs upon.
As for me, I'm sick and tired of them and the rallying cry they seem to find in your columns. Classless........
Get girls to race! Seriously, they can race on the weekends and then be models and spokesgirls during the week. Let one of them win once in a while, and then just sell the sexy driver angle. hot chicks and hot cars?! IT WILL SELL LIKE CRAZY!
-Bike races for the kids! This brings 'em in.
-Monster truck KING KONG action complete with NASCAR car crushing action on the front straight!
-MIDGETS and Silver Crown series races BEFORE the 500, maybe even in the sunlight.
-Free ECO re-usable bags for fans to stuff IMS merchandise into!
-$0.25 beer two hours before the 500, 400 and MotoGP. Worked great in Cleveland once.
-Put a giant fishin and swimmin pond where the golf course is (in infield). The promotes family entertainment during races and gets that Daytona feel going...maybe re-locate Lake Trash there.
-Bake sales and car washes, get the community involved in saving the speedway from IRL blight.
-Bring back the ORIGINAL STARZ of the IRl! There's nothing better than Cowboy Brad or Dr. Jack running Shriners go-carts at the speedway...this will be GOLD baby.
-Tony George or Mari George parachute into speedway (at start finish line) to utter the most famous words formerly that were inportant. Grand stuff there.
-Have ALL NASCAR stars show up for driver introductions at INDY 500. Then, fly them right back to Charlotte.
-Develop an Internet Browser worm or malware that sez "Your Computer is infected with a virus. Click this button to install Indy 500 Virus Protection". Then, the virus deploys all the bad IRL promotion and misleading literature every produced by the speedway, and repetitively displays it on your screen. Great for "target" IMS advertisements.
-Bring your dog and save $40 off tickets. Almost like FREE only you're paying for them.
-Have Motor Lodge ghost tours. Have Joey Chitwood lead tours. Will sell like hotcakes.
-Buy major network airtime to broadcast races.
There, that should help the speedway evolve right into the 20th century and help the speedway recoup the -$675 million invested in the IRL series they so desperately cling to for whatever.
We need not be looking for the IRL headstone just yet!!!
To come crashing down requires an achieved altitude which the League has never attained.
For too long, Tony ran things into the ground. He got used and abused by NASCAR, fired by Bernie, and duped by retired drivers (AJ Sammich Foyt and Lone Star JR to name a couple) and fleeced by car and team owners who cheated, lied and never paid back loans (hello Team Cheever!) or gave back cars over the course of 15 years at the helm. So, is Ropin Randy the guy? Reality: We don't know. Another reality is that the odds are against him right now, as he hasn't got a clue about racing (hello Brian Barnhart) and the real core fans have left for good. So, they are trying out the Mr. Potatoehead car as another in the long line of failed gimmicks and sideshows the IRL braintrust has lobbed out in hopes of salvaging their once massive reputation as THE RACE in the entire universe. Remember when Nigel left F1 as reigning world champ to come win Indy & the Vanderbilt Cup? Like there is a chance in hell that we'll ever see Hamilton, Webber, Alonso or Schui in a Dallara Dart at Indy.
The blame lays squarely at the feet of Tony. you make all the excuses up you want, but F1 and NASCAR will survive while this thing goes tits up in the next 2 years. There is nothing relevant in the racing technology of IRL, there are no personalities worth following, and the TV coverage is non-existant. How much longer will these teams operate without Tonybucks and sweet side deals (hello Penske) is anyone's guess. Relaity: The future has monumental challenges, and I just can't see how they save this thing.
So, thanks again Tony for all that you did with the creation of the IRL. The waste of your family's fortunes, the destruction of American Open Wheel Racing as a sport, and the tragic degradation of our City's finest and most coveted treasure - the Indy 500.
That's the reality Defender.
This weekend I watched parts of several MLB games, the US Open Tennis deal, the Hungarian Grand Prix and NASCAR at Pocono. What did all of them have in common? Scads of empty seats. Does that also portend chicken little-type doom for open wheel?
Here is my main question is this: Or what?
Whenever Anthony Schoettle blogs or writes about IMS or open wheel racing, the theme is always the same. They always seem to have some perceived gap to make up as compared to some point in the past. What happens if they don't make up such a gap?
What is the worst thing that could possibly happen to IMS or the IRL? Both are far more likely to succeed than fail, so why is this obsession rehashed every week or so? That is just stupid.
My prediction about a litany of stupidity in responses to my original points is certainly coming true.
I suggest if the twit name Defender has some information to counter mR. sCHOTTLE'S brilliant analysis in this article, perhaps the bulbous wonder could post up some DIRECT media insider information. Inquiring minds want to know.
Defender assumes that anyone not speaking on the record doesn't have a clue. Sorry, but that can't be true, especially when it comes to IMS and the IRL. There have been too many leaks over the years with accurate info (tony being forced out for example) to say only on the record statements are the gospel.
That figure seems very small for a series title sponsor! Is that number truly correct?
If so, the IRL is in more trouble than I had thought. As for me, I've given up on this series; the races are unwatchable. Is there any hope for a new OW series? Or perhaps a revival of Formula 5000?
When is the last time you read a newspaper?
What a bogus misrepresentation. Everybody knows the camshafts are free.
To Mr. Howard: You are quite astute at dissecting articles to try to find a shred of fact buried inside. I gave up that wasteful pursuit after reading your blog. Twice.
Conversely, Mr. Brown's quotes are not so easily dismissed. Maybe you glossed over those.
But if you're headed out for the grate race at Mid Ohier, do make sure and stop by. We can set a spell under my enjun pullin' tree, and you can sample some of my home brew 20W/150. You'll be puking out numbers all over the place, gairunteed.
that.
IMS staff is very small...less than a hundred?
You have a better chance of seeing Jesus Christ qualifying for the next Indy 500 than you do of seeing IMS close down. But what the hell, I guess you can have your dreams
What is the tax liability? I can't find it on the site provided...anyone?
'Motorsports insiders' = People unconnected with IMS.
'Now there is speculation' = People unconnected with IMS.
'Most with knowledge of Speedway finances' = People unconnected with IMS.
'Motorsports business experts' = People unconnected with IMS.
'Sources close to the IRL' = People unconnected with IMS.
On the other hand, Jeff Belsksus, who IS connected to IMS, says the Brickyard 400 is very profitable, and that it is evaluated separately from the IRL. The 500 drew nearly twice the crowd the BY 400 did. I also couldn't help but notice the line about the 'tight-lipped Hulman-Clan' who 'never divulge financial information.'
Anthony, if you ever choose to write something that is even marginally credible, here are some respectful suggestions:
Give us a detailed accounting of how, precisely, the IRL could possibly lose, much less spend, $400 million over its life. That is nearly $28.6 million every YEAR or almost 2 million per race! I am being serious...are you out of your mind? Are you that gullible, or has the quaint but seriously flawed 'everything was great in 1995 until Tony destroyed it' hater mentality clouded your ability to reason with objectivity?
You refer to the $400 million as a LOSS. How about an accounting for what has been earned? Your consistent haphazard tossing about of numbers for people not connected with IMS tramples credibility. I am genuinely surprised an entity as normally credible as IBJ allows this type of gossip to pass as legitmate.
Since you are so well connected to people who provide you with their stabs at IMS numbers, how about a thorough accounting of ALL aspects of IMS in a year. Ticket sales, TV revenue, sponsorship, advertising, concessions, merchandise, suites, corporate underwriting, etc. Then measure that revenue against expenses, which should also be laid out.
Do not allow your prose to be clouded by the fact that revenue was bigger a few years back. Virtually no legacy sports or entertainment business entity has maintained levels of ten years ago. Why do you position IMS as being more susceptible to such challenges than anything else?
Do you not believe IMS is better positioned than other entities to weather economic downturn? If you do not, you really do not understand IMS.
And now, a prediction. The litany of hater stupidity that is certain to follow my observations in this comment section will assault those of us who have functioning brains.
Tony screwed up everything for one simple goal: To be relevant in the world of racing. To be "just like the Frances" to be "bigger than NASCAR and F1". Those are actual quotes.
so what happened? One single moron ruined the national treasure in Indiana. Everyhting comes down to this embarrassment of a human being. His short-sightedness, his lack of clear thinking, his maniacal ego have ruined it for us. F1 is gone, NASCAr on its way out the door, and the sanctioning fee for Moto GP is just 500k. Retail sales at the track are so bad that they are seriously contemplating the banning of outside food and drink. TV ratings for all of the events are sliding into the bottom of the TV barrell.
Belskus and Ropin Randy sure have their work cut out for them, but the longer this thing takes on water the less likely it appears it can survive. The IMS has a history of lying and secrets and back room deals. 500k seats? LOL Try 250k for a SELLOUT which has not happened in a long time.
Subpar management has the blame. Give us something we can sink our teeth into and we might bite. The mr. Potatoehead Car is not the answer.
I have been reading your columns for a while now,and your commentary...whether I agree with it or not...is often lacking in factual substantiation.
This article is a fine piece of journalism. The direct quotes you provided from Mr. Brown and Mr. Belskus form a solid foundation for your conclusions. Readers deserve factual content, and this one thanks you for it.
There are still some dots on the matrix that are not well connected, but overall this reads as a very good analysis of some very telling news.
Count my vote as an A-
Andy Bernstein
So, at the end of the day the Speedway BLEEDS money, and the biggest vacuum is the IRL. Get it? Remember, FAST FISH FRIDAY's at the speedway, courtesy of MCL's!
" Iâ??ve said it before, but it bears repeating: If the Indianapolis Motor Speedway sneezes, central Indiana could catch a cold."
Again, the state of Indiana will protect the Speedway forever if needed. It won't happen the George family has that security blanket.
How much sponsorship money comes into IMS each May? I know I quoted tickets sales only below, but how much sponsor $$$ comes in on top of the 30,000,000 ticket and tv?
I want NASCAR to leave. One race a year would cut expenses and hurt the competition. Nascar is ailing and we should do anything we can to hasten the fall.
Anthony - you forgetting one thing. The George family has never asked the state of Indiana for one thing period. So, if you think that there comes a time of need and the George family would reach out for help that the state wouldn't be there??? your sadly mistaken. The Indy 500 and Indy Car Series is not going anywhere. Like a splinter under your finger nail :)
Rid yourselves of your albatrosses....I estimate $675 million and NEVER made a profit from,,,,,,,hmmmm, let me see.....IRL! It's like quicksand, get out while you can.
better yet, just quit and go home. IMS is toast.