Friday, July 3, 2009

Tony George, the End of the World and Darth Vader

A year and a half ago me and the Mrs JP (She’s a JP too) took a trip out west to Yellowstone. On the way we stopped in the Back Hills for a couple days. One Day we went to Deadwood and did what you do in Deadwood – hit the casinos. Nothing could go wrong that day – I left up from every table I sat down at and at my final three card poker table drew a straight flush. It was time to move on. Luck had to end soon and Yellowstone was calling. Had a great time in the park though a snow storm hit the day we left closing off the southern and eastern exits from the park so instead of heading south through the Tetons we headed out north and back to the Black Hills and back to Deadwood. So much for my run of luck…I came home up - but not by much.

The past year and a half for the IndyCar series has been the exact same thing. Reunification, Graham Rahal winning his first race, Danica doing the same, a fan and event revival for the 500, Ryan Hunter Reay showed that Americans who have testicles but not a famous last name can win races too, Dario came back home, Izod brought us style and Helio almost caught Dixon for the championship at the end of the season. In 2009 another compelling 500 with Helio’s story book ending ended a great run of positives for league…

But now we are on the other side of that run. An economy heading south, good drivers and teams left on the outside looking in, a plan to make the racing easier on the ears has made it harder on the eyes at the ovals, a longer wait for new toys, a red and white parade, a venerable old track clings to life hoping to race another day, Danica to nascar rumors, the end of an era and an uncertain future.

Tony George was out because of money and the control of it. Money that remade the speedway, created new events and built a new open wheel series – the only one we have left. But the problem was where the money came from. Not from sponsors, not from series generated revenue but from family funds and the family said it had to end. The first instinctual reaction is to assume that the flow of funds to the IRL is in jeopardy and hence the series itself is also in Jeopardy. But that begs reason and common sense.

The 500 and IMS need the IRL, the IRL needs the 500. The two have fates that are tied to each other. For those of you who think or expect nascar to be a savior or vulture are either wrong or greatly underestimate the wickedness that will come if there is not an open wheel race at IMS the day before memorial day. The idea that nascar will simply take over the 500 is silly, they will desecrate the corpse of their rival and at best run a nationwide race as a warm up for the 600 in Charlotte, or simply run a second race at IMS on a date they choose. The month of May will be lost forever. For the 500 to exist the IRL must exist.

George began the IRL to preserve the traditions of the 500. He ruled with his heart and had his hand on the family checkbook. His Successor Jeff Belskus is an accountant and typically in companies, the CFO’s are the guys who rise to the top when hard decisions have to be made. And that is where we are, at a position in time where the gains of unification are withering away. Car counts are nearly what each series was singly before the merger, a bad economy is sucking sponsorship from the teams that race, the fan base has grown tired of old equipment. Changes must be made such that the IRL and 500 as a package are revenue positive with an upward growth trend.

The changes that must be made should leverage the 500 in order to better support and grow the rest of the series without continued support from the Hulman George fortune. The changes that need to be made strike right at the heart of tradition for the month of May, but if we want to have a 500 ten years from now, decisions must be made. Despite his well intentioned passion, TG, the tradition loving, visionary sentimentalist is not the guy to make those decisions. A cold, calculating accountant just might be.

The IMS and the 500 make a profit. If they made more profit then the IRL could be funded by the extra OI – not trustfunds. Opportunities abound to increase the bottom line at IMS and the 500, but all would be controversial…
**Yellow shirts cost money, and everyday they show up they must be paid. An effort has already been underway to cut the number of days where yellow shirts are dawned and the track is open but it has not shortened the calendar. The costs to run the 500 would decrease if the month was condensed into a two week time frame. Long Beach could run later as a high profile, big market, ABC warm up to the 500.
**Ticket prices for the race itself probably would rise incrementally to enhance revenue for the 500, $5 to $10 a seat. Carb day with a practice session, Lights Race, Pitstop competition, concert and thousands of intoxicated 20 something females wearing string bikinis is quite possibly the greatest value in racing entertainment anywhere - at $15 or at $25.
**If the IRL can’t find a series sponsor, the 500 easily could. It wouldn’t garner as much as a series sponsorship, but should easily command close to half.
**There is a hole in the IRL schedule on Labor day, the Road course has already been set up for MotoGP, Let’s go Racing – Qualify and run a Sportscar race on Saturday and then run the lights and the big cars on Sunday at the USGP (Take that Bernie!).
**Sponsorship inside the track – OR – virtual sponsorship digitally superimposed onto fixed areas of the track during the broadcast is cheap money.

Yes, I am the anti-christ sporting a Darth Vader costume killing pupies and ending the world you have become accustomed to it. BUT I really am more like you than your emotions will allow you to believe. I want the 500 to continue being the greatest race in the world. But for it to be that, something more than a marginal, week to week series needs to be featured. No one other than Tony ever showed up with the wads of cash necessary to make that happen.

With that said – I would not do all of these things unless one condition is met. The IRL, needs to get to purple ink first. If the IRL remains deep in the red then the cash infusion from these changes is merely life support for a dying patient. If these funds come to an IRL that is close to break even, then these funds are like start up capital from an investment company or capital from a successful IPO – fuel to prime the pump. Fuel to grow the TEAM program hopefully allowing teams to hire on merit not sponsorship, fuel to have newer equipment sooner rather than later, fuel to better promote the series to a larger audience, fuel to increase purses across the series, and on and on…

If the rumors of even more Apex Brasil involvement are true, then the purple ink may not be far away. IF so, then the time to strike is now…

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