Why They Should Say No To Tony George

A few weeks ago, I was chastised by a few people for putting up a post about a rumor of Tony George trying to put together a group to buy the IZOD IndyCar Series from the board at IMS Corp. Some said this was nothing more than a rumor and that the only reason this story had legs was because bloggers like me kept writing about it. Although it is now confirmed that this is more than a rumor, I shall yield from the temptation to say “I told you so”. Instead, I’d rather look at the main reason why the board should tell Tony George to go away, once and for all.

Last Friday, it was announced that Tony George had resigned from the board of Hulman & Company, the parent company of the Indianapolis Motor Speedway (IMS) and INDYCAR, in order to avoid the perception of a conflict of interest as he pursues acquiring INDYCAR. After all, if he is on the board – how could he be the buyer and the seller? Robin Miller wrote an interesting analysis over the weekend regarding what may have actually transpired. You can read it here.

One of the presumed reasons for “The Split” in 1996 was for control of open-wheel racing. Although I sided with CART at the time, it made sense for IMS to have control of the series that ran at the Indianapolis 500. With CART being that series, IMS had no such control and were subjected to the whims of CART. If CART didn’t like something, all they had to do was announce they would skip the 500. Then, where were they? An empty racetrack in May was not an appealing thought to the Hulman-George family.

As President of IMS at that time, Tony George took a bold and proactive step. He pre-empted the possibility of CART dictating terms and staging any type of boycott, by forming the Indy Racing League. He opened the door to any CART teams or drivers that wanted to make the switch. With the exception of AJ Foyt and Dick Simon, who was in the process of selling his team to Andy Evans – no other CART owners made the jump to run the full season in the new league. The result was a cast of veteran drivers that could not find full-time CART rides and a group of young drivers that few had heard of. Some of these were excellent and talented drivers, while others had no business being in a race car.

We all know what happened. But as of February 2008, IMS has had complete control of open-wheel racing in North America. But then, in 2009, there was some Hulman-George family infighting. Tony George’s sisters had grown tired of watching their inheritance dwindle, as their brother continued to spend millions and millions in a sea of red ink to keep the IRL afloat.

Unlike some, I don’t hate Tony George. I hate what he did to open-wheel racing and the Indianapolis 500 – reducing it to just an afterthought on the US sports landscape. But I don’t question his passion for racing or the Indianapolis 500. He did what he thought was best for the sport. Whether it was or not will always be a major debate. You cannot deny his commitment to the facility that his grandfather purchased in the fall of 1945. He has poured money into IMS and has made it the premier showplace that it is today.

But what I will deny is Tony George’s proven ability as a businessman. He isn’t one. I know, I know – I’m not one either, so who am I to talk? Well, I’m not an NFL quarterback, but that doesn’t mean I can’t tell the difference between Peyton Manning and Vince Young. Tony George was born into wealth. I don’t hold that against him, like some do – but many times, those born into wealth think it is in their DNA to know how to make more money. It isn’t. There are those out there who have demonstrated a knack at buying distressed companies and turning them around. They have the shrewd ability to look at a balance sheet and quickly determine whether or not a company can be saved. They do it strictly with an eye for numbers, without any emotional attachment to get in the way. When has Tony George demonstrated this ability?

Although he comes across as stoic, aloof and devoid of any personality, don’t think for a moment that Tony George is unemotional. Quite the contrary – most of his business decisions regarding open-wheel racing have been driven by emotion, and that’s not a good thing. His latest move of trying to stage a coup is also driven by emotion. How else could you explain his irrational actions?

The problem for IMS with his attempt to acquire INDYCAR is that right now, IMS has complete and total control over the series that runs the Indianapolis 500. CEO Randy Bernard answers directly to the board of Hulman & Company, and has done a good job at what he was hired to do – grow the series and stop the financial bleeding. If they sell the series to Tony George, Randy Bernard is likely out. Tony George claims he no longer has any interest in running the series, but whoever he hires to do so would have to run things through George.

Then there is this…most of his group of financial backers are reportedly not team owners. They are said to be non-racing people. That means they are businesspeople with a lot of money and no emotional attachment to racing. To me, that translates to they are in this to eventually turn a profit. What happens when this group of non-racing people looking to turn a profit, grow tired of Tony George as he continues to lose money, just as he did before his sisters took the family checkbook away from him? Those that have no emotional equity in the Indianapolis 500 will have little patience with him. He had almost fifteen years to turn a profit and never came close. What has suddenly changed? Reportedly, Randy Bernard would have had INDYCAR at the break-even point this past year had the China race not fallen through. With the kind of money the series lost under the Tony George regime, that’s nothing short of remarkable.

Tony George has shown an inability to run a racing series profitably. When his financial backers realize that he can’t do it, he will be ousted and they will turn to one of their other non-racing cronies to clean up the mess. If they’re lucky, this new person may be almost as good as Randy Bernard, but guess what – now you have a series running the Indianapolis 500 that is run by a bunch of non-racing businesspeople with no stake in the future of the race. If they don’t see the financial benefit of running there each May, who’s to say they won’t pull the plug, just as CART was feared to do twenty years ago?

We bloggers have come under fire recently by fans and even other bloggers, for keeping this story alive and for thinking we can appeal to either Tony George or the board to stop this nonsense. I’m not naive enough to think I could influence anyone other than my dog to do anything, but I feel like this is a pertinent subject and to not discuss it is to bury the proverbial head in the sand.

And make no mistake – this nonsense needs to be stopped sooner than later. One prominent owner has already acknowledged a potential sponsorship deal falling through as a result of the perceived series instability due to this infighting. How long will it be before established series sponsors like IZOD, Apex-Brasil or Verizon have decided they’ve had enough and bolt?

Love him or loathe him, Tony George is one of the most polarizing individuals I know of. The word “polarizing” is usually not a good thing when there is something to be accomplished. This series needs to grow – with new fans, better attendance and improved TV ratings. The series doesn’t need this right now. In his press release, Tony George said “It goes without saying that I want to do what is best for this organization”. If that is true, then I would suggest that Tony George give up on this self-serving crusade and let the organization he started grow without him. That’s what would be best.

George Phillips


13 Responses to “Why They Should Say No To Tony George”

  1. Mike Silver Says:

    Great piece, George. You have summed up things beautifully. I hope for a quick resolution.

  2. It’s funny how the poll numbers for the “Yes” answer jumped dramatically over a five-minute period. The TG supporters wouldn’t stoop to stuffing the ballot box would they? Surely not

  3. I support Randy Bernard and his efforts to build Indycar. But I won’t immediately dismiss T. George until I know what he plans for Indycar. When–and if–he buys the series,I’ll wait until I see what direction he plans to take it before I decide if I’ll remain a fan and supporter.

    I enjoy American open-wheel racing and the 500, and would be reluctant to abandon a lifetime of interest in it. Indycar has virtually no fanbase as of now, so I’m not sure George’s purchase would really damage it all that much, despite the hue and cry from the diehards.

  4. George, this episode of the “Continuing Saga of Tony George’s Quest to Run IndyCar” is now over and I couldn’t be happier. Curt Cavin reported that Apex Brazil is “increasing” their involvement with the series and that tells me that they had to have a serious commitment from Randy AND the BOD to go forward with this. All good news.

    By the way, I think that we can pay no more attention to John Barnes ranting about this, too.

  5. Carburetor Says:

    Selling to Tony George would make no sense for the board to consider. I know the argument that with enough money anything is for sale and perhaps this may be so in this case, but it would seem to me (IMO) that with all of the emphasis that the Hulman’s place on tradition (they agonize over whether to substitute singers for an ailing Jim Nabors for pete’s sake…), selling the series to a group of investors that are not that interested or vested in racing would seem counterintuitive to sustaining the 500, because it would put the event at great risk. It seems to me that they value control (which they should), so ceding that control, even at great profit, would indicate they no longer are as committed to the 500 as the premier open-wheel race in the world–and this seems unlikely. If money concerns are a lingering issue, there are other strategies they could employ–such as bringing on limited partners for additional cash infusion, but without losing controlling interest. The key of course would be that the series must eventually be profitable as an investment–or make the 500 event even more lucrative.

    It is a shame that this type of distraction is occuring at this time since all efforts need to be on strengthening the series with fans, media coverage, sponsors, more competitive team-building, and manufacturers. Trying to appease some spoiled person’s attempts at being ‘king’ again must be really annoying to the board–it certainly is to this race fan.

  6. What “the board” can do with respect to a major divestiture is advise Mari, and little else. If she wants TG to own the series, that will happen at some point. As much as I respect the H-G’s for the way that the family has maintained IMS as a facility and the 500 as a tradition, it’s clear that there’s far too much infighting that will always hinder growth. The number of comments on twitter that effectively say “If I were Randy, I’d tell those crazies to go etc. etc.” suggests that I’m not alone in that opinion. I’d rather see IMS and Indycar transition gracefully to a new ownership group that would run the new organization as a real business. Anything less than that will fail in today’s economy.

  7. Don Cusick Says:

    Things have never been the same since the USAC/CART/IRL debacle. I have been an IndyCar fan since 1964 and vividly remember the excitement of many a month of May. (now two weekends in May unfortunately). I would love to see a return to it’s glory days, but like lots of things, they just aren’t developing legends like they used to.

  8. Chris Lukens Says:

    I’ll start by saying that I supported the IRL from day one, but I am also a huge fan of Randy Bernard for what he has accomplished in the last few years. So, I don’t know what is going to happen, but I can tell you what I hope really does happen. I hope all of the people that have threatened ( about umpteen million times now ) to leave and never come back if anybody from the original IRL is put into a position with any authority; I hope they actually DO LEAVE …. and they take their framed pictures of Dan Gurney and their leather bound copies of the White Paper with them.
    And for those that say this would kill Indycar, open your eyes, Indycar is killing itself now. At least we would have a consolidated fan base from which to grow the series. Without all of the constant bickering and backstabbing I think the series would start to gain fans, venues, and sponsors again.

    What has been left unsaid in all of the reporting on this is that there is civil war going on inside Indycar, just like the early ‘90’s, and for basically the same reasons. We won that war once, it appears that we need to win it again.

    How many major league sports are built around a single defining event. Soccer has the World Cup. Football has the Superbowl. Baseball has the World Series. And, of course, racing has the Indianapolis 500.
    How popular do you think the SuperBowl would be if over half of the games leading up to it were Australian Rules Football and over 75% of the competitors were from Australian Rules teams.
    How popular do you think the World Series would be if over half of the games leading up to it were Cricket matches and over 75% of the competitors were Cricket players.
    Do you think those events would have TV ratings between 3 & 4 ( instead of what they get now)?
    Do you think the games leading up to the big events would have TV ratings between .1 & .5?
    Do you see a parallel?

    European Football ( more precisely Futbal ) and American Football are both called football, but they are fundamentally different.
    Oval racing and road racing are both called racing, but they are fundamentally different. The cars are different, the tracks are vastly different, the way they are raced are different, and the drivers mindset is different, i.e., “I don’t care about sector times, I just want to be in front of that other guy”, or ”I don’t care about fastest lap, I just want to lead the last lap”, etc.

    When a road racer won the 1996 Disney 200, I suspected the fix was in. He used Daddy’s money to buy the best equipment in the pits. I kept hoping it was an aberration. It wasn’t. He showed the way for the second tier road racers to do to the IRL what the top level road racers had done to CART. Outspend everybody else ( using OPM ), until every one else was driven out of the sport. These guys had destroyed F-5000, the USRRC, Can-Am, Trans-Am and had nowhere else to race. They looked around and saw the Indy 500 and their eyes lit up with dollar signs. They thought they had found a bottomless pit of dollars to fund their equipment purchases. Reread the White Paper, it was pretty much an attack on the Indy 500s checkbook. This has led us directly to where we are today. Because we are now running out of OPM, we have cars that are too expensive, sanction fees that are too expensive, drivers that are to expensive ( unless they use OPM to bring a check ) and a dwindling fan base.

    I am a long time race fan. The first race I saw that I actually knew what was going on was at the now long gone New Bremen to watch a USAC sprint car race. I was hooked. Two years later I went to the 1962 Indy 500. My greatest fear is that Indycars are just going to wither away. I’ve prayed to God that it doesn’t happen, I know He has more important things to worry about, but I did.

    This reply is way too long and has wandered too far afield from Georges original post, so I am going stop writing.

    • billytheskink Says:

      This is one of the strangest references to Buzz Calkins that I have read.

      • Chris Lukens Says:

        Are you trying to say that Buzz’s background was not SCCA Formula V / Formula Ford or that the team was not financed by his father’s grocery store chain? I had the pleasure of meeting Buzz a few times when I had friends who competed against him in SCCA. He was truly a nice guy. I was actually very happy for him when he had success in the IRL, but that doesn’t change the story. Is there anything else in my reply that you take issue with?

        • billytheskink Says:

          I intended for my statement to be taken at face value, nothing more. Buzz Calkins as an allegory for what ails Indycar was not something I ever expected to read.

  9. Anton was a young cat when he got the keys to the castle. Now he’s an old dog. You can’t teach old dogs new tricks. Oh, and now he won’t have mommy’s checkbook. Bad idea!

  10. billytheskink Says:

    Tony George may have become a wiser businessman, he may intend to own but not the lead the sport, he may have a great plan making money on Indycar. While I don’t think any of these things are likely, they are certainly possible.

    But none of that matters, because Tony George is badly damaged goods. His return to the sport would, more than anything else, simply make already irritated owners and long-time fans angrier.

    I don’t know if Tony George’s bid for Indycar is based on a solid business plan or an interest in getting a toy back. Despite my expectations, I really don’t know that he isn’t capable of running this sport better than it currently is run.
    What I do know, though, is that I do not want to see him involved in owning and operation Indycar ever again. When you’re first chance is a decade-plus of pain and anguish, you shouldn’t expect anyone to want to give you a second.

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