Smart strategy or spinning wheels?

February 12, 2008
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While the lights for an Indy Racing League-Champ Car merger appear to be turning green, smoke is apparently pouring from Champ Car’s balance sheet. Two well placed sources confirmed Champ Car will likely file bankruptcy, possibly as early as today.

Champ Car President Steve Johnson told SpeedTV Monday evening that he has not been informed about bankruptcy proceedings by the series’ owners. But SpeedTV reported that employees at Champ Car’s Indianapolis headquarters were busy clearing out their desks Monday as the operation prepared to shut down.

IRL boss Tony George, meanwhile is returning from Japan today, with what league sources say is good news concerning the possible unification with Champ Car. George was in Japan to talk with officials of the Twin Ring Motegi track about moving their April 19 race to make room for a race currently on the Champ Car schedule April 20. The main prize for George’s IRL is the addition of three markets where Champ Car currently races; Long Beach, Calif.; Mexico City and Surfers Paradise, Australia.

If Champ Car is preparing to flame out, why is George so eager to unify? One theory is the positive press the long-awaited reunion would create. Tim Frost, a Chicago-based motorsports business consultant, said bad news from any open-wheel corner hurts everyone in the business. IRL officials would be eager to trump the bankruptcy of its open-wheel brethren with the creation of a bigger, better circuit.

Another theory is the unification will bring key markets to the IRL at least a year earlier than otherwise, and will also bring much needed competitors to George’s series, which could have as few as 16 cars when the series goes green in March.
Is the IRL’s strategy smart, or should George merely wait until Champ Car folds and pick up the pieces?
  • Perhaps a Champ Car bankruptcy was part of this unification agreement. If Champ Car teams just went to the IRL, Champ Car as an entity still exists and has contracts to race. With a bankruptcy, there is no binding entity and the IRL would be free to negotiate with tracks that make sense for this season and beyond. And just because they might overlook some good potential races this season doesn't mean all is lost. Surely at this late stage they can only absorb what makes sense with the current confirmed schedule. I say bring it on. One American open wheel series with the Indy 500 as it's focal point. That is the way it was meant to be if the last 12 years has taught anyone anything.
  • Lets see; champ car is failing and so is the IRL. The only reason that they are making money is due to the Brickyard every year. So I guess TG is relying on grade school math where two negatives equal a positive.
  • I agree with Mark on the point of the contracts. The only way Champ gets out of all of those conflicting dates and underperforming events is to visit good old Bankruptcy court. It is a no brainer as a first step to unifying the leagues in the near future.
  • Always someone like AK trying to fan the flames of disinformation. And just where does your information come from since George's balance sheet is a well kept secret. Most of the IRL venues are very successful. And the Indy 500 draws more than the Brickyard. Granted the Brickyard gates help fund the IRL, but that is what he intended it to do, smart guy.
  • Tony and his staff must see some advantage to doing this NOW. Clearly the markets gained, especially Long Beach, are critical. But I wouldn't be surprised to see the Champ Car boys make this deal crash and burn. They seem kind of bent on destruction. On a side note, I heard Champ Car hired a media/communications specialist away from Chip Ganassi's team, but when she showed up for her first day of work Monday, Champ Car higher ups told her she might want to see if she could go get her old job back. That demonstrates a pretty bleak outlook for CC I'd say.

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