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.