What Would Mr. Hulman Do?

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On Friday night, I saw the blurb on Twitter – which is where I learn most of my IndyCar news these days. It simply said “IMS seeks state aid for up to $100 million in improvements”. It only took fifty-eight characters to erase more than a century of the leaders of IMS always being able to claim that they had never taken a dime of taxpayer’s money. It was just another long-standing tradition, gone in the blink of an eye.

As I read the article that was linked to the tweet, I envisioned Mr. Hulman spinning in his grave. That was my reaction on Friday night. As I read mixed reaction later that night, and then stewed about it overnight – I found myself doing something I rarely do. I waffled.

While it’s easy to say that Mr. Hulman never would have allowed this to happen, I’m not so sure. Tony Hulman was an astute businessman. When he was handed the responsibility of improving the sales of Clabber Girl at a young age, he inherited a product that had stagnated. He introduced new and aggressive ways of promoting the product – sales methods that ruffled the feathers of the old guard. Mr. Hulman recognized that times had changed and that his company had better change with the times or be prepared to get left behind. He saw it as the new way of doing business. Suffice it to say that his method succeeded.

In the ensuing years, Mr. Hulman purchased the Indianapolis Motor Speedway in the fall of 1945 for roughly $700,000. It was his policy that all profits from their one event, the Indianapolis 500, would go back into the track for maintenance, capital improvements, etc. It was never his intention to make the people of Indiana subsidize his property.

By the time Tony Hulman passed away in 1977, many changes had taken place at IMS under his direct guidance. Some were a product of forward thinking, such as the first pit wall anywhere that separated the pits from the actual racing surface; or the massive stands that were constructed around the track under his watch.

Other changes came as a result of changing times. By the end of the 1955 season, AAA had pulled out of sanctioning auto racing. As a result, Mr. Hulman founded USAC, creating a racing body that rose to prominence in the sixties and seventies and still exists today. He probably never envisioned founding a racing body when he bought the track ten years earlier, but he adjusted on the fly. That’s what successful business people do. They maintain a state of fluidity and make adjustments when necessary.

When Mr. Hulman passed away thirty-five years ago, it was a different sports landscape – not only in Indiana and the US, but the world. NASCAR was still mostly a southern sport that was rarely televised. The Indianapolis 500 was king so far as auto racing was concerned in this country. Baseball had just added two new teams in Toronto and Seattle, to go along with new expansion NFL franchises in Seattle and Tampa Bay. There was no ESPN or CNN. For the most part, we got our news, sports and entertainment from ABC, CBS and NBC.

By the time of Tony Hulman’s death, our nation had just witnessed its first boom in civic stadium construction. Hideous multi-function stadiums sprouted up across the landscape at taxpayer expense. Round clones appeared in Philadelphia (Veterans Stadium), Pittsburg (Three Rivers), Cincinnati (Riverfront), St. Louis (Busch), Atlanta (Atlanta-Fulton Co) to name just a few. It was believed that these doughnut shaped facilities with artificial surfaces would be the most efficient use of taxpayer dollars. What was considered futuristic in the early seventies looked downright dated and ugly by the nineties.

Sports were just starting to become big business. Million dollar contracts were not the norm, yet – but they were not unheard of. Joe Namath and Johnny Unitas were wrapping up their legendary careers in strange uniforms on the west coast. The Colts were still in Baltimore, while Bear Bryant and Reggie Jackson were still creating their own legacies. The times were much different then.

Today, the Indianapolis Motor Speedway is valued by some at over $1 billion. With the Indianapolis 500, the Brickyard 400 and Moto GP event in its portfolio, it is a cash cow for the Hulman-George family as well as the town of Speedway, the city of Indianapolis and the state of Indiana. The cottage industry of motor racing that exists in central Indiana is directly related to the Speedway. This facility has pumped a lot of money into the economy of the entire region for over a century, without taking a dime.

But in a struggling economy and changing culture, revenue is falling while expenses are skyrocketing. Motor racing is not held in awe by today’s twenty-somethings as it was a generation ago. We can moan and whine about the reasons why, but those are the facts. In today’s entertainment world, even the mighty NFL is struggling to maintain its grasp on today’s culture.

Keeping up with the changing culture is why new sports venues built to house premier franchises like the Dallas Cowboys and the New York Yankees are costing well over $1 billion to construct with all of the amenities demanded by today’s consumer. Items such as multiple High-Definition video boards, available Wi-Fi, gourmet and health-conscious concessions, climate controlled common areas, massive hospitality grounds, easy entrance and exit and ADA compliance; were all things we would have considered either frivolous or beyond our imagination twenty years ago. Now they are expected – or demanded.

The Indianapolis Motor Speedway is one-hundred and four years old. I began going there when it was only fifty-six years old. In that time, I’ve seen a lot of changes – but so much of it still looks the same. That’s why it appeals to us hard-core fans. But in another twenty-five years, I’m probably going to be too old to go much (if I’m still around at seventy-nine). We find it quaint, but what about those coming up in the next twenty-five years?

My son is twenty-three. He has been to IMS more times than I can count since he was three. His last time there was for the 2005 race and I think it would suit him fine if he never went again, except possibly for the melee that is Carb Day. I look at IMS and see it as a shrine. He and his generation look at sports as a waste of time and consider IMS an antiquated facility that houses an outdated activity.

While I normally detest change and see IMS as almost perfect for my needs, I also want the facility to be there for the next hundred years. To meet that goal, it has to be a viable business entity for the next generations. They can’t wait until it’s too late, they probably needed to make the necessary changes a few years ago. The video boards are old, outdated, too small and too few of them. You can’t see them in the sun. they don’t utilize the 16:9 wide-screen format of HD technology and they are scattered too far apart. Granted, IMS is a vast area but you must meet the needs of today’s consumer.

Personally, I love the Tenderloin sandwiches at the track. The Track Dogs and burgers at IMS aren’t bad. But adding nachos to the fare is not really keeping up with today’s concession market. Go to any NFL game and you’ll find a large variety from chicken and pasta, to fresh sushi and fish tacos along with an offering from some of the best local restaurants in the area – as well as the standard junk food that I’m partial to.

More tunnels need to be constructed for better access in and out of the track. I’m not sure there is such a thing as too many restrooms. But all of these things cost money – lots of money.

Then there is the subject of lights at IMS. Personally, I’m against them for many reasons – but I can also understand not wanting to attend the NASCAR race on a sun-baked aluminum bleacher in July. As much as we open-wheel fans turn our collective noses up at the idea of stock cars running at IMS, just remember – the money the Brickyard generates is what keeps the IZOD IndyCar Series afloat. If that race goes away, so might our series. If running the Brickyard at night makes it possible for us to keep attending the Indianapolis 500 in the daytime each May – I can live with it.

I’m not a resident of the state of Indiana, so the use of state funds won’t affect me much except my hotel bill each May might be a little more. Politically, I’m not a fan of relying on tax dollars to solve a problem. I also don’t believe that just because all sports entities are getting subsidies, that makes it OK for IMS to get theirs. But I also realize that Mark Miles, Jeff Belskus, Doug Boles and the rest of the IMS brain trust are in a tough spot. There are major funds needed to get the ever-aging facility up to modern standards – standards that are needed to keep pace in the constantly changing entertainment market place. And when it’s all said and done, IMS is an entertainment venue.

So, if you were looking to me to take the stance of the old guard and lament the use of taxpayer dollars the way I would defend roadsters, Novi’s and turbochargers – you’re probably now very disappointed. I’m not thrilled about it, but I really see no other alterantive.

If IMS is to survive well after I’m gone, then this is money that needs to be spent now. We can argue the merits back and forth all day long, but the statement that Tony Hulman would never do this should not be part of the argument. Mr. Hulman was an astute businessman with an eye on the future. I think he would see it as the only means to get to the future in today’s business climate. Just as when he took over Clabber Girl, he knew how and when to adjust and would see this as the new way of doing business.

George Phillips

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26 Responses to “What Would Mr. Hulman Do?”

  1. I could not pick 1 of the 3 choices because I have never walked in (IMS et all Shoes) Great history lesson about IMS and a Great read too. One thing we can always count on…we always have more questions than answers…Thanks for your passion about Racing:)

  2. Steve Jarzombek Says:

    I’m an Indiana resident and a long-time fan, but this really frosts me. There are many other directly productive industries in Indiana that have suffered huge job losses due to mismanagement and failure to plan for the future…and there is not enough tax revenue to go around to save all of them.

    I used Curt Cavin’s figures for seating at IMS to estimate the gate revenue for the 500 (assuming a sellout of seats and suites, plus 25,000 general admissions) and the Brickyard 400 (assuming attendance of 130,000 at the same average ticket price as for the 500.) That comes to $35 million and an average ticket price of $85. Both of those are once-per-year events, and one is traditionally known as the Greatest Spectacle in Racing, isn’t it?

    Well then…the average single game ticket at Lucas Oil Stadium for a Colts game is a bit over $86 now. Even if the Colts don’t make the playoffs, there are 10 home games every year, and 624,000 seats available…and as far as I know, it’s generally a packed house at those prices.

    IMHO, the problem is clear–IMS has for years failed to charge enough for tickets to provide adequate funding for the future. And if it was deemed a bad idea to raise ticket prices as the net would drop due to decreased attendance, that means the product wasn’t good enough…end of story.

    The other thing that gripes me is the final statement in the IMS press release: “IMS officials indicated that the Motorsports Investment District as proposed would not financially impact the local school funding formula because it would not be funded through property tax collections.”

    That’s more than just disingenuous, it’s a total load of horse hockey. Several years ago, the method by which Indiana public school operating expenses were funded went through a significant overhaul. Previously, operating expenses were funded by a combination of state aid from general revenues and local property taxes, with property taxes in most cases bearing the majority of the burden. The situation was remedied by increasing the state sales tax and capping property taxes, such that state tax revenues fund all of the operating expense; local property taxes cover only capital improvements and transportation. Property taxes have nothing to do with the school funding formula anywhere in the state of Indiana now:

    http://ceep.indiana.edu/projects/PDF/PB_V7N2_Summer_2009_EPB.pdf

    Telling an outright lie to justify this scheme is abhorrent.

    • I don’t really care about your kids or your taxes.

      I’m an Illinois resident who sees YOUR tax dollars being spent on billboards on the Southeast side of Chicagoland to steal OUR businesses to YOUR state.

      Would it have killed you to cut some textbooks and teachers, and raised some property taxes to keep the Formula 1 race?!!

      • As much as you think an F1 race is important, to cut even ONE teacher so that it can be run is asinine.

        • I didn’t say a Formula 1 race was important.

          I said the children of Indiana are not important.

          • So, you say that na F1 race is important than the children? You have your head up your ass.

          • Perhaps what you meant to say was that “the children of Indiana are not important TO YOU” Of course they are important. Pretty harsh JB. As long as Illinois residents elect politicans like that governor with the funny hair you might want to think twice before blaming your problems on Indiana.

      • Steve Jarzombek Says:

        All I can say is that I’m not one of the Illinois taxpayers who has repeatedly elected criminals to the governorship and state legislature who have refused to fix your state’s abysmal finances for decades. What I am, however, is an Indiana resident who worked in Ilinois until recently, and thus was forced to pay higher state income taxes to your state.

        • Agreed.

          We’ll redo a few elections, the 2004 US Senate Election would be a great place to start.

          You’ll end school lunches, high school sports, and sell school buses to send a big fat taxpayer funded $25-million/yr check to Bernie.

          • Either you are sarcastic or you are an utterly ignorant person because Bernie and his circus isn’t worth imparing the education of anyone. Now, if you don’t like that then don’t come back to Indiana, you won’t be missed.

          • You guys are the ones being sarcastic here. We all know Indiana children need only two skills:

            1) Cleaning my hotel room for nine nights in May. [Plus two more if Formula 1 came back.]

            2) Making correct change for two tenderloins from a $20 bill.

          • Forgive me JB. I thought you were someone else who is that dumb, not a troll. Good one.

  3. “IMS BRAIN TRUST ” … :o) ………… Surely you jest !

  4. As a former and long time Indiana state taxpayer I am all for it as long as the state infrastucture and education is taken care of.

  5. H.B. Donnelly Says:

    The grandstand improvements that are supposedly happening are down to the woeful lack of ADA compliance about the facility. ADA is a government-mandated program, so at the least, those improvements should be subsidized.

    As for video screens, I work in TV, so of course I’m interested in those. The screens in public-subsidized Lucas Oil Stadium and Bankers Life Fieldhouse (not to mention planned screens at the Indiana State Fairgrounds and IUPUI track/soccer field) are brilliant and state-of-the-art, so why not have the city’s oldest, biggest sports venue be treated to the same?

    In any case, it will be fun to see some improvements in the name of the raceday experience. I’m fully behind Doug Boles and his crew!

  6. NOT saying this describes George, because I don’t know, but given the Tweeting around the last presidential election, I wonder how many super-red, Gov’t Spends Way Too Damn Much Money! types will suddenly turn purple … “well, it depends …” George, respectfully, you’ve already said that you’d be a fan of IndyCar pretty much no matter what they do so your conclusions here aren’t unexpected.

    • I thought the Blues, “oppose corporate welfare” types were against giving money to corporations as well. I thought the Reds and Blues had that in common. I guess not.

  7. Okay with using govt money to improve the track, but think it would be prudent to improve the neighborhood and access roads leading in and out of the track at the same time, especially with the certainty of racing at night.

  8. As I am not a current Indiana resident, I don’t feel qualified to comment. Steve Jarmzombek provided an interesting perspective from a Indiana resident. I will just follow the issue in the Indianapolis Star.

    Here in Wisconsin, the Green Bay Packers have twice sold stock to fans to raise money for stadium improvements. The shares are not worth much more than something to display on your wall, but fans are more than happy to buy them and a lot of money has been raised that way without having to ask for a taxpayer handout.

    Aside from that, I would like to ask this of George: How do you find the time for a family and job in real life and still find the time to do these well researched, detailed commentaries? I certainly appreciate the time and effort you put into this site.

  9. What I don’t think people are realizing yet is that the days of government subsidizing sports or anything else is beginning to come to an end. We are in a period of government spending comparable to a super nova when it flashes at the end of the life of the star and then goes out forever. The government is worse than flat broke.

    The George’s would be smart to do all they can to run the business without government help. That way when the government money stops, their business will still be viable.

    At IMS, just like in MLB in my opinion, history is everything. What will attract people to IMS today and tomorrow are the same things that attracted us. What attracted me to IMS was the history, that even Ty Cobb drove cars here. The fact that they did not gouge you on food prices, and that you could bring in your own food and beverages. That a new track record could happen any year. That I went there with my buddies when I was a teenager and can still go back with them, and take my kids there, and its much as it was. The change is not in the facility, but in the cars, as we see them try to go faster and safer year after year. That was the positive change. The technology. The skill of new drivers as they came on the scene. To the extent that IMS has gone away from these things has hurt them.

    If IMS does things to make itself more popular, well how does that seem to be working? For Indy car racing or anything else? For all the talk that change is good, change sure seems to be killing a lot of things. Maybe its some consistency we all want to find in a world that changes so much that it makes your head spin.

    Joe Garagiola used to say about the post season in baseball “What got you there will get you out of there”. There is a lot of truth in that saying. Generations may change, but what attracted a kid to the race in 1920, 1950 and 1980 is not much different. Why keep trying to reinvent the wheel? Sports will change in popularity over time. There is no reason to change what has always been good, and will be popular again if you don’t change it for $$$$$.

  10. Ben Twickerbill Says:

    Poor planning/management and a 50 year old business model, add to that what TG did to the series which was and continues to bleed money like the Titanic taking on water for 20 years, then throw a nice long economic downturn into the equation. It is a prescription for disaster. Now the fossils over at 16th and George think its the tax payers problem… I love AOW, but I sure hope they have a plan B in place… Can you say, American Express Motor Speedway ..?

  11. You better give IMS what to wants. It might up and move to Baltimore.

  12. I have enjoyed the reading, just do not agree with everything said.1960 was my 1st race as a 5 year old kid. What got my interest was sitting in Turn 1, in the infield before it became the “Snakepit”. Coming with my mom and dad in those early forming years, seeing a blur go by with the different engine sounds, it was oh so sweet as a kid. Fast forward to 1974 and I purchased my 1st grandstand seats in the NWVista. Now sit high in Turn 3, NEVIsta since 1977, with my sons and their wives/girlfriends and friends of the family. This is what INDY is about. Family & Tradition. I normally hate change, but at times, it is for the better. Mark Miles is no dummy. His track record is pretty good. I am all for, whatever needs to be done to keep this great historic piece of Indiana in pristine shape.

    This great shrine has done so much for this nation, city and state. As we all age, we slow down. Why not sprinkle the “Fountain of Youth” and spruce the old girl up to accomodate new fans. The Speedway has always been fan friendly. Try going to a few other tracks and see what you spend. My only trip to Daytona in 1999 cost me, face value, $500.00 total for tickets, for the “Busch” race on Saturday and the 500 on Sunday for the same 2 seats. And I might add, no comparison to race day thrills. INDY blows daytona away. This topic is controversial, but I am for protecting the old girl. She sure has given me many a thrill in 52 straight years. I’ll keep coming back as long as I can.

  13. I love the speedway and hate to see it as anything less than the greatest in the world; but if buying tickets, merchandise, and products that are a sponsor of IMS/Indycar isn’t enough….

  14. What’s up i am kavin, its my first occasion to commenting anyplace, when i read this piece of writing i thought i could also make comment due to this good piece of writing.

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