Should The Sisters Sell?

GeoThumbnail 
Ever since Tony George begrudgingly removed himself from all leadership posts within the Hulman Company, the ownership group of the Indianapolis Motor Speedway has been irreverently referred to as “The Sisters” – meaning the three sisters of Tony George; Josie George, Nancy George and Nancy George-Conforti. Of course, their mother Mari Hulman George still sits at the top.

Before the DeltaWing concept and Danica Patrick’s run in stock cars stole the headlines, most were discussing Tony George’s eight-month free-fall and how the sisters were going to run things. Jeff Belskus assumed Tony’s duties and he went out and hired Randy Bernard as CEO and to basically be the face of the Izod IndyCar Series. As the popularity of that hire was debated, I started hearing more than a few fans suggest that it was time that “The Sisters” sell the Speedway so that someone could run it better.

I’ll admit, when presented logically – their argument seems to have some merit. The premise is that Tony George is the only family member left, save for his mother, that gives a hoot about the Speedway and motorsports in general. The theory is that the sisters could care less about racing and had grown weary of watching brother Tony shell out over half a billion dollars of their inheritance to try and preserve something they have no interest in. The school of thought says that a corporation would run the Speedway like a business rather than a family heirloom and therefore make much better decisions.

Baloney!

I’ve never met any of the sisters. If any of the three were to walk in my front door, I would not have a clue who they were. And from what I hear, they don’t share their brother’s love of racing or their family’s property at 16th and Georgetown. But don’t dilute yourself into thinking that any fans of open-wheel racing or the race we love in May would be the least bit better off if the property were sold.

I’ve heard Curt Cavin estimate that the entire property and its subsidiary companies could fetch well over a billion dollars. That’s just to buy it before the first operating dollar is spent. Tony George used to be fond of saying that the Speedway wakes up every day and eats money. This is not just a bunch of asphalt surrounded by concrete and steel structures on a big plot of land on the west side of Indianapolis. With its licensed properties, IMS Productions, the radio network, the museum, the IRL and the physical maintenance of the facility – it’s a small economy within itself. But it is a self-serving entity and everything there is about preserving and promoting the racing that is exhibited at the Speedway.

At that price, there would be very few takers. The name I hear tossed about the most is ISC who is basically owned by the France family of NASCAR. I shudder at the thought of some business examples where a large corporation will buy its closest rival with the sole intention of shutting it down. Could that happen with the Speedway? Well, they wouldn’t shut it down but it is not in their best interest to have the Indianapolis 500 continue in its present state. Bruton Smith lives to keep NASCAR honest, but I don’t see where he could be an owner that would please any of us.

Perhaps an entertainment company like Disney could buy it, but then they might be forced to carry all of the races on their own network and actually promote them. Perhaps some mega-corporation that we’ve never heard of nor even know what they really do could buy it, but if it doesn’t meet their bottom-line expectations – what then?

As much as the sisters have been vilified over the last few months, I think the Speedway is still in the best hands possible. As little as they may want to admit it, the place is now part of their DNA. Their grandfather, Anton Hulman, Jr., bought the Speedway in the fall of 1945 at the urging of former driver Wilbur Shaw to save the famed oval from the wrecking ball after it fell into disrepair during World War II. Hulman vowed to pour all of the profits back into the facility and quickly turned around the fortunes of the aging facility. Tony George followed his grandfather’s philosophy and built the Speedway into the premier racing facility in the world.

It has been said that as long as Mari Hulman George is still alive, that the facility would never be sold. For the sake of the traditions we have all come to embrace every May, let’s hope that the hallowed Speedway will stay in the Hulman-George family for years to come. I just don’t think I’m ready to make my annual pilgrimage each May to watch the Apex Brasil 500.

George Phillips

About these ads

16 Responses to “Should The Sisters Sell?”

  1. George, while I share your concern about a new owner (especially ISC), I have significant doubts that the Hulman-George family understands what made the Indy 500 special, or more importantly, they have the slightest clue what fans would want, and what would bring people back. So from that perspective, they should sell before they further de-value their asset.

    The sisters are so mad at Tony because IMSC is in the financial hole right now. All that construction TG has done over the years? It hasn’t been paid for with IMS profits, it’s been paid for with loans.

    Those loans have come due, and with the Brickyard and MotoGP down from a revenue perspective, they can’t be paid back with current revenues according to the bank’s own auditing. Among other things, I suspect this led to an awkward Christmas at the Hulman-George household.

    Not that the sisters are blameless in all this. I mean, they (and the rest of the board) signed off on the revenue forecasts that projected a return to pre-split crowds once the merger happened. That seems insane to any fan of the sport. How could the family be so completely out-of-touch with the pulse of the sport? Do they not understand they’ve angered pretty much all of the fan base between the split and the IndyCar Series becoming CART? I don’t think the sisters do, so the only hope (if you want the track to stay in family hands) is that the next generation A) has a clue and b) is able to get into leadership before it’s too late.

  2. Donald McElvain Says:

    The one man who needs and could buy the Speedway is Roger Penske.

  3. Mike Miller Says:

    The Speedway is not for sale and it can’t be sold based on the deed.

    • The Indianapolis Star once had a deed that said it couldn’t be sold except if the alternative was folding. After like 8 record quarters of profit, the family board got together and decided things were so terrible that they had to sell.

      I would be very surprised if the IMS deed was written in a way that would make a sale impossible, especially if the parties who owned IMS were in agreement that they wanted to sell. Who would contest in that case?

  4. The “Apex Brasil 500″ has a snazzy little ring to it. Well, compared to the “THERE IS NO INDY 500 THIS YEAR,” I mean.

  5. tim nothhelfer Says:

    I think the fatal blow in any sale of the speedway would be servicing the DEBT.
    If the speedway eats money every morning for maintenance, paying the interest on the debt would be crushing.

  6. Bankrupcy and restructuring “the debt” is always an option, can’t see the Clabber Girls doing that.
    Maybe a Rodeo in the future, bull-riding and all!
    Can’t wait for electric bulls at the Indy Rodeo!

  7. The speedway would absolutely not be better off if they sold.

    The Indycar series / IRL is dead. It is floundering on life support provided by the 500 and the series is a massive anchor holding the Indy 500 down.

    There aren’t enough fans to support a series, but there are more than enough fans to support the 500. If you remove the financial drain that the series puts on the family, servicing the debt is no longer an issue.

    Furthermore, while the series cannot support multiple chassis and engine providers, the 500 could. If they only had to build equipment that would last for the month of May and perhaps one other race in Long Beach the cost of running would drop tremendously while sponsorship interest would not change because most sponsors are primarily only interested in Indy anyway. Even further, many Nascar drivers and OWNERS would be highly interested in participating in Indy if it did not require running a full season in order to gain the experience and technical knowledge necessary to be competitive.

    If they let the series die today and opened the 2011 Indy as a fairly wide open spec race they would see an immediate change for the better in almost every way. From there a new series could ORGANICALLY develop just as it did in the past.

  8. Sorry Scott… I must have missed the five years in a row of the Indy 500 having 10,000 fans in the stands on race day. I know IMS doesn’t release official crowd numbers (on ANY of their events) but the 500 seems to have a full crowd on race day. :idea:

    The Brickyard 400, USGP, & the Moto GP events can not say that.

    Also, if these NASCAR owners want to participate in the Indy 500 now or in the future… they are NOT required to run the full Indycar season There are quite a few part-time & Indy Only teams curently in the series :idea:

    • AZZO,

      I must have missed where I said that Indy stands are empty. In fact, my point was that Indy is a phenomenal draw (both in attendance and television ratings) despite the fact that few other IRL races do well in either category.

      My point is that the 500 is the only thing keeping the series afloat. Most of the sponsors are in it for Indy but the owners have to spread that money through 16 other races. The Hulman family has to take their massive revenue from race day and blow it on running the other 16 events. If they dumped the series the business of running the Indy 500 would suddenly be booming from a financial perspective.

      If Indy sponsorship only had to cover 3 weeks of running in May there wouldn’t be any need for ridiculous cost controls that took away the spirit and the intrigue of the event.

      As far as Nascar owners go… of course they don’t have to run the whole season. The only problem is that unless you do you simply cannot compete against the teams that do because you can’t overcome the experience gap. The difference between fielding a competitive car and a backmarker is a big deal to them.

      Tiger Woods would never have participated in a long drive competition despite the fact that he is a far better golfer than the long drivers. He just don’t have the specific skill and experience required to win such an event. Not only would he not want to look bad when he was beaten by the regulars… the fact that they beat him would damage his overall image and hurt his endorsements (not that he hasn’t done that to himself).

      Nascar guys love the fact that open wheel stars are embarrassed by driving in nascar. Make no mistake that the owners know that they would look just as silly after a one off attempt at Indy versus the big guns.

      If you eliminate the series…. things change in a big way.

      • Scott,

        I think some of the poorer crowds at the non-500 races is partially down to dreadful promotion and poor / indecisive management of the series. Hopefully this is something Randy Bernard can help rework; otherwise the series may continue to struggle.
        I am adamant that the series will not fix itself overnight – despite what many think. It will take time…

  9. Randy Bernard will know what to do but more and more it looks as if Scott is right. (If there are 10k fans where are they all during this “silly season?”) There are just a handful of “bloggers” who are wondering, like George, what to expect in the future for this series.

    (“The Sisters” deference has a negative tone BTW) and really as of late, it seems that they are very in touch with “their reality.” The Team Owners have a tougher job now and the transferring all of the negativity to “the sisters.”… well that is just kind of offensive in this economic melt-down.

    Have to say that Scott makes sence, but when the economy turns around in ten years, maybe the race will be different. The original Formula-one style with real engineering and real auto brands is still appealing. (The pinewood-derby model for cub-scouts is probably the straw that broke the camel’s back for “the sisters.” Engineering innovation on the back of one or two highly skilled individuals is not an easy task…The “bad news” was really evident when Roger Penske walked away from Saturn…George is ROFL, but a new race car could have been viable then, with his manufacturer and under his leadership. People aren’t giving Roger this negative tone because he is a smart guy and I’m sure that “the sisters” watch every business move he makes. No negativity there…just smart.
    The last few years have been tough on “the sisters” as the finanial world has shrunk in half, so give them some credit for trying to “manage.”

  10. Also the Disney-thing aleady failed for them. Death on the raetrack was not so appealing and Disney is in the family-friendly, business.

  11. Walt Disney World Speedway is a racing facility located on the grounds of the Walt Disney World resort near Orlando, Fl.

    It was built in 1995 by IMS Events, Inc., a subsidiary of the Indianapolis Motor Speedway Corporation, and was designed primarily as a venue for the Indy 200 at Walt Disney World, an Indy Racing League event. They actually had races there and it was too dangerous but that was before the safe barrier…Now you can do the Indy experience there but doubt that Disney would buy the brickyard when they already had the Mickyard. When Sam Shmodt ws paralyzed they stopped racing and have made a “family friendly” racing experience.
    No one died on that track, but Disney is already doing the Indy-Petty race experience

  12. On November 1, 1927, Rickenbacker bought the Indianapolis Motor Speedway, which he operated for nearly a decade and a half, overseeing many improvements to the facility. – Wikapedia
    It is possible that someone named George (Forsythe, Tony) that has the passion, could buy the speeday. It is possible that some else could buy the speedway. It is possible that the fans (fanatics) could rally and help guide the future. I don’t know that the sisters will let us down or that someone with passion has the clout (Peter Windsor) or the money or both (Roger Pensky) could put a deal together. This is a question that makes us reflect on the very thing the speedway lives off of; tradition…

  13. Bristol Motor Speedway eats money every day, too.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 102 other followers

%d bloggers like this: