The IndyCar Series race Saturday in Newton, Iowa, was a sellout, and the racing on the track was good. Now IndyCar officials need to figure out if races at small venues like Iowa Speedway pack enough of a financial punch to put the series in the black.
The track in Iowa only seats 30,000, but the fan showing at Saturday night’s race was a lot better than the 13,000 that showed up a week earlier to watch the IndyCar race in Milwaukee.
And IndyCar officials have to be smiling about Marco Andretti’s victory. Nothing against Will Power, Scott Dixon and Dario Franchitti, but series officials have to be excited about a little more competition at the top.
Besides, Andretti is everything the series needs; American, young, good-looking and articulate. Not to mention the weight his last name carries in not just racing circles, but larger sporting circles.
Financially speaking, though, the Iowa race wasn’t a huge win for IndyCar.
Series CEO Randy Bernard said if the race in Milwaukee the week before had sold out and had a title sponsor, the event still would only manage a very small profit. Since Milwaukee has about 8,000 more seats than Iowa, we can deduce that Iowa will never be a big moneymaker for the open-wheel series.
But it’s easy to see the 7/8ths of a mile bull ring at Iowa makes for good television. There are few better race venues to watch for passing and lead changes.
Still, from a financial standpoint, venues like Iowa may give Bernard one of his most troubling dilemmas.
There are a lot of issues Bernard must consider to make this series profitable. Chief among those may be which markets to stay in, which ones to abandon and which new markets to try to penetrate. It’s a small vs. large market challenge familiar to many sports, including NASCAR.
Sources close to the series said it lost $22 million in 2009 and close to $15 million in 2010. The markets the series races in will have everything to do with when and if the series turns a profit. And with the Hulman & Co. board of directors increasingly eager to stop the financial bleeding, Bernard could be looking to make a move.
The overnight TV rating for the Iowa race was up 35 percent from the same race a year earlier. Still, the .35 rating (400,000 households nationwide), must come up if the series is going to make a run at long-term profitability. The markets Bernard decides to pursue could have everything to do with those TV numbers.
The decisions for Bernard won’t be easy as long-time venues may have to be jettisoned for new ones that might be more lucrative. Those new markets are no doubt a gamble. We’re about to see what kind of gambler Bernard is.
It’s looking increasingly like Milwaukee is out. Races in markets such as Sao Paolo, Brazil; Long Beach, Calif.; and Edmonton, Canada, are definitely in since they turn a dependable profit.
Only time will tell on new markets such as Baltimore and Las Vegas.
None of these markets alone will make the series profitable. But a carefully built portfolio of races with action like fans in Iowa enjoyed Saturday should create a growing fan base, and over time build the type of TV audience the open-wheel series must have to start steering out of the red.