IndyCar ponders overseas expansion to counter troubles at home

August 28, 2013
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IndyCar Series officials are seriously considering an off-season overseas mini-series of sorts at the same time one of the series’ most popular drivers—Tony Kanaan—complains about lack of sponsorship dollars, his declining pay and inability to secure a ride for next year.

So I’m left wondering how to square this.

Hulman & Co. CEO Mark Miles and his right-hand man, Derrick Walker, are trumpeting the idea of an off-season circuit in strategic global markets to boost the image of the series and the financial fortunes of its teams. Walker has no firm commitments with tracks, promoters or sponsors, but IndyCar officials said a “winter championship” could be launched as soon as early 2015.

Walker says the plan is a chance to showcase IndyCar’s brand of open-wheel racing to overseas markets, while very carefully stating that it is not an attempt to challenge Formula One.

Some sports marketers think the overseas portion of the schedule would be popular with sponsors looking to do business in far-flung locales, and that markets in Asia, Latin America and the Middle East would be willing to consider hosting a race.

Here’s the thing. Most, if not all, IndyCar teams will need some subsidy to make it happen. IndyCar officials are likely to seek that subsidy from race promoters. While that set-up isn’t atypical of international races, it’s not the healthiest position to be in, either.

IndyCar officials have indicated they’ll avoid F1 markets, presumably to steer clear of the ire of F1 czar Bernie Ecclestone. A war with F1 is something we can all agree that IndyCar cannot afford.

So, what countries and promoters would IndyCar find if it steers around F1? You might imagine that if F1 is not in a market, there’s a good reason.

Yes, some countries would like to host an F1 race but can’t afford it. And those same locales might lap up the cheaper IndyCar sanctioning fee. But it’s a risky proposition for a number of reasons. Randy Bernard learned that the hard way with his China fiasco of 2012, when a race in Qingdao was cancelled at the 11th hour.

A basic tenant of business is that when looking at a return on investment, you have to look at the amount (actual or potential) invested to determine the (actual or potential) return.

While strengthening IndyCar’s reach and audience—internationally or otherwise—is a worthy cause, it comes with a cost. You wouldn’t know that listening to Walker talk about how these overseas events will add to the teams’ and series’ bottom line.

“Right now we've got a lot of down time and there’s only so much testing you can do,” Walker told Racer.com. “Our teams need income and an international component could help provide some additional income that helps strengthen their financial position.”

The cost of this endeavor is about more than mere money—though that’s a big part of it. Miles and Walker have to be careful that they don’t divert time and energy from priorities. If a top priority is to go global, I suppose they could be on the right path with this initiative.

Beyond giving the teams—and their staffs—something to busy themselves with during the off-season, I’m not sure what the end game is.

It’s been no secret that IndyCar team owners often lay off a chunk of staff when the season is over. With Miles suggesting he will compress the North American (spring and summer) portion of the season, primarily to avoid butting heads with the NFL, there’s more concern about that than ever.

But that concern isn’t born of the series’ two most important constituencies—sponsors and fans. It is born out of a concern for IndyCar teams and their employees, a constituency the series has too often prioritized too highly.

 So it’s no surprise that some team owners support the proposal. But this can’t be merely a jobs creation issue for the series and its teams. Their central mission cannot be about creating jobs for people who love racing.

At some point, series officials have to be about growing the series—and more importantly making money, something they haven’t managed to do since the open-wheel series’ started in 1996.

As Miles and Walker deliberate over an overseas expansion, they have plenty to worry about on the home front. On Sunday, only 391,000 people watched the IndyCar race in Sonoma on television. It was a good race, full of intrigue on and off the track. Too bad not many people saw it.

Meanwhile, Tony Kanaan, the reigning Indianapolis 500 champion Tony Kanaan says no one will give him a job racing IndyCars in 2014 unless he brings a big-time sponsor with him.

“Right now I have not got one offer on the table that doesn’t require me bringing money,” Kanaan recently told Racer.com. “I’ve talked to Michael [Andretti], Bryan [Herta], Chip [Ganassi], Sam [Schmidt] and others and they all need money. And at this point in my career, I think that's a pretty sad situation.”

Kanaan even said he’s willing to take a pay cut to get a ride. But still no takers. So that begs the question: If no team is willing to sign the reigning Indianapolis 500 champion at a discount, where’s the money coming from to race internationally during winter?

More importantly, those invested in this sport must ask themselves how a handful of races in places like Qatar and along Asia’s Pacific Rim will strengthen television ratings, live attendance, merchandise sales and overall fan avidity in places like Indianapolis, Pocono and Sonoma.

And how will resources in the series’ front office be divided to focus on launching and growing an international mini-circuit and the North American schedule?  

Miles and Walker may have this all worked out. They may have a blueprint that connects the dots across the Atlantic to bolster this series once and for all. And sooner rather than later, we won’t ever have to hear about the plight of guys like Kanaan again.

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  • Racing in Peril....
    The ongoing Obama economic disaster is having it's predictable effect upon sponsorship in all racing series. The Cup series has seen difficulty drawing new sponsors, Indy Car continues to struggle, and the NHRA has taken a couple of body blows recently, as John Force has lost Ford and now Castrol, after 29 years of sponsorship, has announced it is quitting after next year. No racer in any series has been more successful than Force, and he works tirelessly to support his sponsors and the NHRA. It gets to the point of return upon investment, and the advertising and marketing budgets are being shredded as companies hunker down for the tough economic days ahead.
  • IndyCar Ponders
    I've been watching open-wheeled racing since before I could walk and the bottom line is there has always been Good drivers who couldn't get a ride and bad drivers who could. The sport that I grew up with changed in the early 70s and since then - no money no ride. That's just the way it is. You can blame the car owners and the drivers. But it is a business and businesses require money to operate. I like Tony and I think he should have a ride, but I don't get to decide who I get to watch and who I don't.
  • Opportunity or Repetitive Mistake?
    I see such an idea as being an opportunity to mine some cash to expand the reach of IndyCar and that is noble (not to mention the opportunity for F-1 wannabee team owners to twisty race on different continents), but there must be some ground rules. The most important one should deal specifically with the domestic schedule. It should ideally begin soon after the Super Bowl and end right before the NFL regular season. By rule, there should be a mandatory 50/50 balance between ovals and non-ovals, and at least one oval prior to Indy. IndyCar has it in their power to make it work and market the diversity effectively, but given the folks charged with the responsibility they may not have the will. Making the same mistakes multiple times and hoping for better results is fairly typical for those actually making decisions. History has shown the higher the percentage of non-ovals the greater the chance of failure. So if they pursue this strategy hard (which seems likely) they need to do it on either side of a domestic schedule and milk it. I like the idea of keeping teams active most of the year. The direction of the current domestic schedule (now 70% non-oval) is disturbing.
    • I totally agree!!!
      I totally agree about the majority of races for Indycar is currently road courses. I do believe that this is a big part of the problem they are having with attendance. People who pay money want to see the entire race, not just one corner of it!
    • Road Courses Not the problem
      Last time I looked the most successful and popular racing series in the world, F1, was 100% road courses. People love road courses. Except Indy, the ovals are poorly attended and dying. The problem is Tony George. He destroyed the sport when he split it. It went from being No. 1 to being almost dead. The No. 2 problem is their TV deal. It is horrible. No 3 problem is the the Hulman George family only care about the Indy 500. There is little promotion of the series by them. The fact that put the races on such a horrible TV channel with low ratings speaks volumes of how unimportant the series is to them.
    • Reality Check
      That is the only paper IndyCar should be cashing. The masses are not only disinterested in IndyCar, most do not even know it exists. The masquerade that IndyCar is a major league sport that cannot "butt heads" with the NFL is laughable. Note to all: What few fans this failing and falling sport has left will not tune out of a September or October race to watch the Colts and Texans play. They'll watch the IndyCar race. All two-hundred fifty thousand fans the sport has. AND, most importantly, the fans who enjoy watching the Colts, the tens of thousands, the Millions, who watch NFL football every week, will not tune in to watch a sport they don't even knwo exists, and if they did know it was around, well, they are going to be more interested in RG III than Sebastian Saveedra driving 90 miles per hour in a parking lot ok? It is all silly. IndyCar is a tiny, third-tier, niche sport with a small, very small, but loyal following. It is not enough to sustain even a regular USA season, let alone a year-round one is places like Qatar. Please. Miles does have one thing right: Spring and Summer. Eight to ten oval races. And acceptance that IndyCar racing is a part-time, semi-professional endeavor for 90 percent of the participants. Gone, long gone, are the big time days. Tom Bigelow drove a truck in the off-season. Maybe TK needs to get that Class A licesnse this Fall. And all the othrs need to find a non-racing vocation. Indy Car of the future is part-time work in the Summer, baby.
    • Two words.
      I have two words for this article and for the thinking behind it. Delusional and laughable. How the hell can anyone in their right mind think something that can't be sold here is going to go over big there? What a bunch of sad sacks running this mess.
    • They've Gotten Wind of This....
      Notable observations thus far: The obsessed Hulman-George critics who place that family at blame for every real or perceived problem the series has still have not mustered the ability to effectively use a mirror. More importantly, we live in a world that has fundamentally changed from almost any other year or era. It is no longer the last century, the past few decades or even last year. Pining for a favorite era of the past is quaint but unrealistic. If the whining is distilled to its essence we may all actually be on the same page. Race fans crave innovation, accessibility and something compelling. The number one thing IndyCar must cultivate is a sense for effective marketing. That has been clumsily attempted multiple times, but no home runs have been hit. As for IndyCar being 'major league,' it rarely has been save for a short time in the 50s and early 60s. It has always been a niche, particularly when compared to stick and ball. NASCAR is responsible for making 'racing' a big sport, and even their popularity is slipping. Even in the event IndyCar marketed itself brilliantly it would still be a niche domestically. F-1 may legitimately be considered top tier in many parts of the world, but has been an even smaller niche in the US than IndyCar. It is my hope Miles emphasizes what is great: The quality of the racing (most weeks), personalities and storylines. Let's enhance the niche first then grow from there. An overseas schedule may be OK, but the real challenges lie within our own borders.
    • Sounds desperate
      To avoid butting heads with the NFL we're going to butt heads with soccer while skirting around F1 into locales with questionable support for racing and no interest in IndyCar. Build on your strengths to tackle challenges and stop chasing imaginary dollars.
    • More laughable
      Disciple keep telling yourself the family has nothing to do with this mess. Anyone with a functioning brain and knowing the truth knows that the owners are ultimately responsible for what they own. What your saying is if I have an apartment house and it no longer meets code and is becoming unsightly I could blame the contractors I cheaply hired to maintain it. It doesn't work that way. The court will serve papers on the owners. Not the contractors, not the residents, not the landlord I hired. Please stop it. All you are doing is making stupid excuses. It those types of excuses and the hangers-on that tell the family what they want to hear that is the problem. Emperor's new clothes indeed, and here you are in a fairy tale. Plenty of naked backsides being shown and obviously no one wants to see it.
    • Solution
      The best bet would be to pull the plug. Now. There are enough Indy cars, old, DW's, and assorted other Indy-style cars, to run the 2014, 2015, and 2016 Indianapolis 500s as invitationals. That gets the old, rusting, grey mare to 100 stanzas. Game. Enough cash has been flushed and the H-G kids and grandkids and assorted hangers-on are not gonna live like their parenst and grandparents already. Why make it worse so they have to get jobs at Steak & Shake? Plus, those kids don't know how to work anyhow. Pull said plus after this season and just run the cars each May the next three years on the cheap. Nobody cares anymore anyhow.
    • A Real Change is Needed
      IndyCar needs to scrap the corporate control of racing which is now in the hands of a very few engine builders and car builders. They need to go back to the days gone by when you can race what you bring. This is how things were developed to help promote changes to the automobile industry. We need more oval races and American drivers whose names you can actually pronounce and relate to in some way. We need much better announcers for the T V and at the race track. Tom Carnige used to hang out with the drivers off of the track and he always made the dullest race seem exciting. Robin Miller is an example of a failure at announcing even in his limited roll in the pits. Sure we may see cars that run a little slower than today's but they will be driven not just guided around the track. If you want to bring fans back to the stands at Indy then tear out that asphalt,concrete and gravel in the first turn,plant grass and allow cars to park up close again in a reborn Snake-Pit. Many of the people who came to the track in the old days came to watch the people as much if not more than the cars. Get the police to calm down and let the young and old party a little, they don't need to be a swat team that arrest and beats the tar out of some drunks.
    • let 'em roll with this idea
      I am 100% behind the IRL on this international venture. They will fail like a car going down the road without lugnuts on. How funny will it be when the wheels start coming off and they can't realize it!!! Euros and Asians know cars and that joke of an open wheen car with that giant box on the frontend and the "scootering dog" rear end will be not highly sought after in foreign markets where taste and style is important. Mark Miles, this is a BRILLIANT idea. And let me say something about Tony Kanaan....he stinks and is washed up. He don't deserve a ride because the only race he won of importance was given to him by soft entry (ahhhem, Dario glided it into the wall softly). You know it, I know it, the world knows it. All 3.6 Indy 500 tv ratings worth of the world. So Tony, cry me a river. Tristian Vaultier is the future, Anthony told me so abck in May. AND, he's got ride buyer MONEY! Go ask your buddy and perennial F1 backmarker Rubens Barrichello for the $$$. He's loaded and can't get a ride. Bwahahhahaha, save our track!!! With International money....I hear downtown Beirut is looking for a race.
    • No Young Audience
      I'm guessing that most of us who post here about an IndyCar article are over 45 years old. Point being, the younger generations are not interested in racing. X Games, Fantasy Football, College football and basketball, UFC fighting (gawd..)and even soccer now hold the interest of the oh-so desirable 18-42yr sports fan demographic. A barely promoted, niche form of racing like IndyCar is nowhere on the radar of younger American sports fans today.
    • Grand Prix of NoMore
      Bwwwwaaahhhhaaaaaa!!!!! Hey, Disciple, two questions for ya': 1 - Are you going to attend the last Grand Prize of Bustmore this weekend? 2 - How is it the series expects to make a bunch of coin for the new IndyCar Jobs Program in the hot spots overseas, running the big uglies around at 90 mph, when they cannot even get it to work in an old US city? Bbbbwwwwaaahhhhaaaaaaa!!!! Oh, the humanity! And Mike Dull says they need more! Bbbbbwwwaaahaaaaa!!!! Snorenoma, contrived Bristol-liek and all, ven with the Captain acting all harvick-like for the cameras, couldn't pull out of the 300,000 watching the big uglies and their $50,000 primary sponsorships playing indoor go karts in the Sonoma sun. Bbbwwwaaaaahaaaa!!!! I didn't know suck could be so, well....suck suck...as in immense suck. Disciple? Your next!
    • I Believe I Will Pass
      I prefer engaging in intelligent conversation with adults. But thanks.
    • High 5 figures
      I seened the Angies List money going down the drain several blogs ago. Who will sponsor the great International IRL series in the Winter? Angies List? Bwahahhahhaha! Hartmoor Polio Water...?????? This is GREAT plan. High 5 figure sponsorships and POISON playing the main 3 ghetto stage behind the Pigoda with the $100MILLION from taxpayers will thrust this series to the #10th slot on the NBCSN channel dial. I'm lovin it!!!! Bwahahahhahahahahahhahahahahaha!
    • brilliant
      So it wasn't Tony George who destroyed open-wheel racing the U.S. It was Obama. That's why I love comments sections. I don't approve of a separate series. I don't care where they race, but it should all be one season. I can't imagine there'd be much interest in it outside of Japan, but they probably know more about that than me. I'd hope.
    • What would be the difference
      in an .1RL race in the US and one in Uzbekistan? Nothing, the TV ratings would be the same.
    • You reap what you sow
      too bad that so many egos and bad decisions in the 80/90's still strangle this series. The divided created by the CART/IRL split has never been completely repaired. Sponsors are protecting their cash and will not spend it until the series can deliver for the sponsors (people watching the races). Mark, I suggest you go back to the basics and invest in good racing. This will solve the long term issues and sponsors will reward you with cash.
    • Get on the bus folks
      Look, unless you support this drek they'll probably wanna race in your town. Export it now and we as AOW fans can be relieved for 6 months that the burning bag of dung is on someone else's doorstep. This international thing is a colossal opportunity to show the world just how bad America is. They can't count on the YEN anymore and Japan already tossed the IRL out TWICE. QingDao China prefers rotting seaweed than to having the IRl Indycar lumps there. Australia told Tony George to pound sand. Canada hates Indycar and Mike Andretti is responsible. Barry Green took the money in 2002 to shut up, maybe they can race where ever he's docked. So, get on the bus friends and save our track! This international deal is a deal far ahead of it's time. Just like the NBCSN deal. Bwahahhahahhahahaha! (I'm going out to get me some more Hartmoor Polio Water right now. Like vapor in a bottle).
    • Bring back the Hawaii SuperPrix
      The thinking is so bad over at the Izodless IndyCrap Series they didn't even think about reviving the Hawaii SuperPrix concept and thus, at least keep the silly off-season jobs program in place right here in teh States. The Pro Bowl is a goner after next year, so there was a chance to replace it. I know, I know....the series needs to let the fans do the thinking but when did the Angies' List Presents the Izodless IndyCrap Series brought to you by Idiots ever consult the fans? Bbbwwwaaahhaaaaaaaaa!!!!!
    • Why?
      Why is the series called "IndyCar?" It's not on television in Indianapolis, at all and there is virtually no exposure here with the exception of the race which is a shell of its former self. How about being more generic Cable TV Championship Racing League or some such thing. It sure looks like IndyCar is doomed. Too bad it used to be great, but things change.
    • So Many Questions...
      Hmmmm. That's odd. I watched the 500 in Indy in prime time right after attending the big race. I would be curious to find out what 'former self' consists of. Also, when will the 'doom' part actually occur? Thanks!
      • Apex
        Buh bye Brazil. Do Gomers realize that Brazil is in South America and not Indianer?
      • Brazil POOOF
        HaY, Indyman. Another prediction comes true. HaY, BMC...how'd TURBO do? Listen up MARK MILES....mothball this waste of a series until you guys and come up with some good ideas. I'll even give you a free one...LOSE the ugly wings, rear bumpers, hideous sidepods and those disgusting airboxes. I hear Baltimore was SMASHING sucksess. Bwahahhahhahaha, I could run that series WAY better than you and I can do it from the comfort of this blog. That's just how bad you guys are at it. Indycar is a laughable joke...the clowncar series. That's how the world perceives you. Hahhahaha, all of your own doing.
      • HAy CHief I red on hear
        the .1RL was grate for business Brasil promoter pulling out http://www.grandepremio.com.br/indy/noticias/sem-dinheiro-da-tv-bandeirantes-etapa-brasileira-da-indy-disputada-no-anhembi-de-2014-deve-ser-cancelada The spending restraint that the Grupo Bandeirantes has done in recent months is not restricted only to the Morumbi station walls. Amid layoffs and closure of areas, the direction of the Band already advised to whom he has no money to carry out the SP Indy 300 from 2014, which was scheduled for the first week of May. The Grand Prix found that the TV already gives the event as cancelled. Future of Baltimore IndyCar race remains uncertain http://racing.ap.org/article/future-baltimore-indycar-race-remains-uncertain
      • Brazilians found out Like Izod HAs
        money spent on the .1RL is wasted money
      • Indy road race
        Now we know why the Indycar floated the trial balloon of the early May Indy road race. Now we know why an international series is important. The IRL is running out of domestic markets to taint. Mark Miles, your product STINKS, when you guys gonna figure it out? Hahaha, you all fired Angstadt and kept Barnhart...the inept pattern of bad business decisions continues. How many track has the series been tossed out of now? 30+ and growing. Next year have triple headers, no one will notice...Bwahahahadoctor!
      • Hey Hooter
        didn't you say there were hunedreds of thousands at the speedway on opening day Mark Miles clarifies IMS road course stance - Racer.com “We only had a few thousand people on [Indianapolis 500] opening day this year and we keep doing the same things and it's not working.”
      • What happened?
        Few thousands....why? What happened? All the proprietors of the speedway had to do was open the gates and cut the lawn. Ya mean they messed that up too?

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      1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

      2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

      3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

      4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

      5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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