Will Roger Penske Buy The IRL?
For the past two to three weeks, I have heard and read a few random rumors and speculation that Roger Penske may buy the Indy Racing League from the Hulman-George family. The first time I heard it, I thought it was ridiculous. But after hearing the idea discussed some; it makes a little more sense…although I seriously doubt that it will ever happen.
But as we head into the long dark and cold off-season of IndyCar racing, it’s one of those subjects that’s fun to toss out there, play devil’s advocate and ponder the “what ifs” and “why nots”. The timing is perfect for someone to buy the struggling league. I agree with Curt Cavin in that the family would not be interested in selling the Indianapolis Motor Speedway. It is too entrenched into the family’s soul and heritage. Selling the IRL is another matter.
The Indy Racing League was strictly the brainchild of Tony George. Since he dropped the bombshell of the formation of a new open-wheel series in March of 1994, the origins of the creation have been debated for years, but it is safe to say it hinged on control and power. Tony George kept the league afloat with family money since its inception. With the economic meltdown of the past year and the almost certain shrinkage of the family’s portfolio, it is strongly believed that the family had seen enough of their fortune being thrown at a league that has yet to turn a profit. It is believed that this was the impetus of Tony George’s ouster shortly after this past year’s 93rd running of the Indianapolis 500.
The family still owns the track and the league. Although it is hard to conceive of them ever parting with their beloved Speedway; the IRL has apparently been nothing more than a sore subject with most of the family for the past fourteen years. They would probably like nothing better than to rid themselves of the perennial money pit. The trouble is…who would want it?
After all, this isn’t some under-capitalized venture that just needs a few tweaks to achieve profitability. No, as hard as it is for someone who loves open-wheel like myself to admit; the IRL has been operating under a heavily flawed business model for some time now. They have been functioning under the delusion that IndyCar racing is just experiencing a slump and it will all come back in due time. As much as I wish that had been the case, this last season has given me plenty of reason to think that every facet of this sport needs to be given a major overhaul in order to assure its short-term and long-term survival.
The other day, I chastised those who complained that the race at Homestead was boring. If you’ll notice, I never said anything about the season being exciting. It wasn’t. The fact that sixteen of the seventeen race winners came from only two teams is not what I call scintillating drama. The closest a season came to resembling the predictability of this season, was in CART in 1994. Of the sixteen races that season, twelve of the winners came from Marlboro Team Penske. They mounted a three-car effort, which consisted of Al Unser, Jr., Emerson Fittipaldi and Paul Tracy. The other four races were spread among three other teams. Michael Andretti won twice for Chip Ganassi, Scott Goodyear won for Kenny Bernstein and Jacques Villenueve won for Forsythe-Green. So at least three other teams got to visit victory lane besides that year’s juggernaut, but it still made for a boring season of racing.
But a lack of competitive balance on the track is just one of many major problems facing the IRL that need fixing – quickly. They face an eroding fan base that is quickly evaporating. What fans they had are finding other ways to spend their money and time. There is also a justified fear out there that once potential sponsors survive this recession and realize they have gotten by pretty well on a reduced budget, it’s likely that those dollars may never find their way back into a sports marketing budget. Averaging a .39 on a niche cable channel that fewer people are getting than just two months ago doesn’t help either.
Add to that a dwindling car count, the added costs for new chassis and engines supposedly for 2012 and a season-opening race in Brazil that doesn’t seem to be able to get off the ground. It all makes for a very nervous and tenuous future, to say the least.
The dilemma facing the Hulman-George family is that they would probably love to be shed of the Indy racing League, but they don’t want to pull the plug on it – not yet. The problem is; who would buy such a distressed property with so many areas in need of repair? If the IRL were a building, a developer would probably just knock it down and start over.
Short of that happening, there aren’t a whole lot of options. This is where Roger Penske’s name keeps surfacing. The Captain has a knack for turning almost everything he touches into gold. This isn’t by luck, however. Roger Penske will get involved with an endeavor ONLY if he thinks it has an excellent chance to thrive. This is why he ultimately walked away from the Saturn deal. After his deal with Nissan-Renault to build cars for the resulting new company fell through, his business model no longer seemed viable. He was not going to put himself in a position to lose money and be involved with a failed concept. Don’t forget what Danny Sullivan once said shortly after his dismissal from Team Penske; “When the music stops, Roger will always have a chair.”
Although it wasn’t exactly meant to be a compliment when Sullivan said it, it speaks volumes about the way Roger Penske conducts business and why he has been so successful. If he doesn’t think it will work, he’s not going to do it. This isn’t to say that Roger Penske won’t take a gamble or a risk. He has taken several risks in his business and racing career. Spearheading the move with Dan Gurney and Pat Patrick in the fall of 1978 to form CART was a very risky proposition. It worked for over twenty years, but when Penske determined that CART had run its course, he left the series he helped found and bolted for the IRL
He also took a chance when he decided to build his own chassis in CART. Many years, the gamble paid off and he had a superior car. Some years, such as the mid-eighties and late nineties, the gamble backfired with an inferior chassis. In both of those cases, Penske was smart enough to set his ego aside and purchase whichever chassis was superior – whether it was a March in the eighties or a Reynard at the end of the nineties. Roger Penske will always do what he has to do to put himself in the best possible position to succeed.
So the questions linger – will he and should he buy the IRL? He could certainly afford it. And if he did actually take the step to buy the league from the Hulman-George family, that would be a sign that he was reasonably confident that he would be able to fix most of the problems and actually turn a profit in the not so distant future.
There would also be the conflict of interest issue. Although it came up when Tony George founded Vision Racing in the league that he also owned, it quickly died down when everyone saw how bad Vision Racing actually was. When they flirted with being competitive at the beginning of 2008, it was because Larry Curry was trying to be a little too lax in his interpretation of the rulebook. He was summarily dismissed by George so as not even give a hint that they were not going to play by the rules. Consequently, Vision Racing was never competitive again until Kentucky in 2009, which was after Tony George resigned from the league.
Team Penske is always at or near the top in every season. Although his team has only won one championship (2006) since moving to the IRL, they have won four Indy 500’s since their move in 2002 and they are always in the mix for the championship going to the last race. Any sign of an unfair advantage within the league, would do more than raise a few eyebrows.
Ultimately, I just don’t see Roger Penske buying the Indy Racing League. He will be 73 before the start of the next IndyCar season. I think that he truly loves competing in the IndyCar Series as a car owner. I’m sure he wants to continue to try to win more Indy 500’s. I think that owning and running the IRL would take away from the joy he gets as a car owner – even if he thought he could make a go out of it.
But his love of competition aside, I don’t think Roger Penske would believe that buying the IRL would be a successful venture for him. If he bought the league and failed to save it from extinction, it would tarnish his golden legacy. Roger Penske has worked too hard to put a black mark next to his name at this point in his life. As Danny Sullivan said…Roger Penske will always have a chair.