Monday’s bombshell announcement that Roger Penske is buying the Indianapolis Motor Speedway and the IndyCar Series has been received warmly by the racing community, which is relieved to see the storied venue and America’s top open-wheel racing series slide into the hands of a billionaire businessman whose passion for the speedway is undeniable.
We agree that the Michigan-based tycoon is preferable to perhaps any other buyer—especially a private equity firm that might have viewed the speedway simply as an asset to exploit for maximum profit, even at the storied venue’s long-term expense. While that’s not how all private equity players operate, we’ve seen that movie before, most recently with Sun Capital Partners’ ownership of the now-defunct Marsh Supermarkets Inc.
It’s also a win to put IndyCar and the track in the hands of someone with massive financial might who appears willing to invest to maximize their potential. The Hulman-George family, stewards of speedway since 1945, “had taken this as far as we can,” as Tony George put it at Monday’s press conference.
Yet forgive us if we are not ready to pop the champagne cork over the Penske deal.
For starters, the loss of local ownership of the world-renowned Indianapolis Motor Speedway—the only thing many people across the globe, or even the country, can cite as a Hoosier treasure—is a terrible shame. We lose something as a community when our most important institutions are run by people based elsewhere, no matter how well-meaning they might be.
Then there is the reality that Roger Penske is 82 years old. He may seem larger than life, and his vitality is impressive, but he’s not always going to be around.
While it’s reassuring that Penske recognizes his mortality and has put a succession plan in place, there are no guarantees that future generations will share his gifts as a businessperson or his fascination with motorsports. After all, there are plenty of easier ways to make money.
Indeed, one of the disconcerting takeaways from this week is that the speedway—despite all the unforgettable moments of heartbreak and triumph it’s produced over the decades—is not all that valuable of a business.
The combined sale price for it and the financially struggling IndyCar Series was only about $300 million, sources familiar with the transaction told IBJ. Scores of far lower-profile Hoosier businesses have fetched more, from Appirio to Orbis Education.
That speaks to the fragility of the open-wheel racing business in the 21st century, decades after the rise of NASCAR, infighting in the sport and other challenges combined to sap its fan base.
We’re confident that IMS and the racing series will benefit from having Penske, a proven businessman known as “The Captain,” at the helm. But that alone isn’t enough to ensure a new era of prosperity for the iconic, 110-year-old venue.•
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