Get Your Popcorn Ready!
Fans of the NTT IndyCar Series have been expressing their discontent with several things about the series for a while now. Things seemed to bubble over last fall, when there was nothing but one bad news story after another with nothing positive inserted for balance. There was yet another delay with the hybrid engines, the video game that had been on the drawing board for a couple of years was suddenly scratched. Texas Motor Speedway was off of the schedule for the first time since 1996 and so on. IndyCar fans love to complain, even when there is nothing to complain about. They had their pick when deciding what to complain about last fall.
It seems that IndyCar fans are not the only ones complaining about the way the series is being run. IndyCar owners are getting vocal as well. It turns out that last month, a group of owners got together and aired out their concerns. Then a couple of weeks ago, the owners were on a Zoom call with Mark Miles and several others from Penske Entertainment – the owners of IMS and the series. It was apparently a very productive meeting where the owners felt like they were heard, and Miles seemed appreciative of what came out of the call.
Then last Friday morning, as teams were preparing for the first practice session of the season – Michael Andretti fired several shots at Penske Entertainment and Roger Penske specifically, in an interview with Nathan Brown of The Indianapolis Star. While the other owners were trying to be tactful in sharing their concerns, Andretti did not hold back. He accused Penske of nickel and diming the series, and was vehemently opposed to the proposed fees for a charter system. The $20 Million collected from the charter system would be invested in the series. Andretti said he was insulted by the idea.
Andretti went on to say that Penske owns the series and not the owners. He maintains that $20 Million would do nothing, and it would take five times that amount to make a dent in promoting the series. Andretti maintains that it is Penske who bought the series. He should be the one putting his own money into it, rather than taking more money from the owners to put into it. He went on to say that if Penske is not willing to invest eight or nine figures (meaning at least around $100 Million of his own money, he should sell the series.
Andretti was further quoted as saying “I think there’s a lot of people on the sidelines thinking, ‘This is a diamond in the rough if you do it right.’ But what you need is big money behind it to get it to that level, and if he’s not willing to do it, I think he should step aside and let someone else buy it.”
I have to admit, I was a little taken aback, when I read those words. It’s nothing for us fans to sit here and talk about how the series and the car owners need to spend money on this or that. You want a new chassis? The car owners should foot the bill. How about a new engine formula? The manufacturers should be able to cover that. That’s what we do. We gladly tell others how they should spend their own money, knowing that no one is going to take us seriously. But now we have an owner of one of the bigger teams in the series telling Roger Penske how he should spend his own money. I’m not quite sure how I think about that.
On one hand, Michael and the other owners aren’t wrong. Since 2020, I’ve had a lot of people I know that are either employed by the series or at least connected to the series tell me how things are different now. Roger Penske and his group are turning over every rock to figure out ways to cut expenses. When the series was still owned by the Hulman-George family, money was spent freely without much regard of how it would be recouped. Everyone just assumed there was a bottomless tank of Clabber Girl Baking Powder in Terre Haute that would cover everything.
Well, the Hulman-George family cashed out at the end of 2019. Roger Penske bought the Indianapolis Motor Speedway, along with the IndyCar Series. He tasked his group with running everything like a business, instead of a family hobby. I’ve not seen the books, but my guess is that while IMS was a cash cow – the series was bleeding red ink all over the floor.
Rich people didn’t get rich by throwing money away. Sometimes the wealthiest people I know are also the cheapest. I had a friend in college in the 70s, who dressed like a bum and drove an old beat-up Datsun. One night, his parents were tragically killed in a plane crash. He was an only child and inherited $40 Million overnight. You would assume that a college kid with control over that much money would suddenly go wild. Quite the contrary. If it was possible, he became even more miserly after his inheritance. We eventually lost touch with each other over the years, but if it is still running – I’ll be he’s still driving that old Datsun today. Rich people like to hold on to their money.
I’ve heard since Penske Entertainment took over, each department is expected to be accountable for all of the paperclips they use. While that is probably an exaggeration, I think it demonstrates the scrutiny that all IndyCar employees are feeling.
But running a sport sanctioning body is different than running commercial truck leasing, logistics companies, retail truck rentals or a portfolio of various auto dealerships – which make up the majority of the holdings of The Penske Corporation. It’s even different than running your own highly successful racing team. Practically all of Penske’s dealings to this point have been business-to-business (B2B); which requires a much different skill than marketing to the general public.
Roger Penske has a well-documented track record of successful B2B business dealings. He has leveraged those business relationships in building successful racing teams. More recently, he has converted many of his team sponsors into becoming series or IMS sponsors.
But marketing an admittedly struggling sports entity to the public requires a different skill than selling a corporation on becoming a partner or sponsor. The public is more fickle and unpredictable. And tastes change. What appeals to an 87 year-old Roger Penske or a 65 year-old me, has little bearing on what a 30 year-old seeks in entertainment.
I’ve gotten into trouble recently, for criticizing IndyCar marketing – so I sort of have to tread lightly here. Marketing a series that is primarily followed by people approaching their fifties, is a tough sale. The twenty-somethings of today do not care about what was important to us when we were in our twenties. By “us”, I mean anyone older than 50. To be honest, I don’t know what Gen-Z cares about, but I don’t think it’s fast cars and football. When we heard an engine revving, it sent chills up our spine. When twenty-somethings of today hear an engine revving, they are triggered into wondering what kind of carbon-footprint it is leaving.
Some seem to think that Formula One has discovered the secret sauce, by enticing a new generation of fans through Drive to Survive on Netflix. That was more of a function of people sitting at home during COVID. Remember, that also launched Tiger King into pop-culture. That fad died as quickly as it was launched. I think the bloom is off the rose for F1 also. Most of the fans it generated quickly realized that actually attending a Formula One race is far beyond their means. What I’m hoping for is to grab some of those F1 fans and get them to realize that IndyCar provides better racing, and you can actually attend their races for a very affordable price. You can even attend their top-event – the Indianapolis 500, for a fraction of what a bad seat for a Formula One race would cost. How do we convey that to all those disillusioned new F1 fans?
The long and short of it is, I get the point that Michael Andretti was making, but I also see it from the side of Penske Entertainment. I get the idea that if you take IMS and the Indianapolis 500 out of the mix that the IndyCar Series would be on life support. For years, we always heard that the revenue generated by the Brickyard 400 is what propped up IndyCar. Penske Entertainment has to stop the bleeding of cash and get things on solid financial footing, before they can invest serious money into making it grow.
Chip Ganassi also made a point last week that people tend to forget. It was bad luck on Roger Penske’s part that he bought everything just a couple of months before the pandemic hit. He had to hold an Indianapolis 500 and a Brickyard weekend with no fans, yet IndyCar fielded a relatively successful 2020 season. More importantly, they returned in 2021 and the subsequent years since. If the track and the series were still in the hands of Hulman & Company, would we still have the series or the race as we know it? We will never know the answer to that, but I’m thinking the series would no longer be intact and the Indianapolis 500 would look a lot different. I just don’t think the Hulman-George family could have absorbed that kind of blow and keep things afloat. Never forget that.
When Michael suggested Penske sell the series, who would he want it sold to? Liberty Media? They are the same group that couldn’t get the F1 owners to let Michael Andretti into their club.
And do we really want IMS to be separated from the series? We saw the battles that went on in the late 70s, 80s and 90s between CART and IMS. I don’t think anyone wants to see a repeat of that.
Did Michael Andretti step out of line? Did he undo any good that may have come from the meeting of owners and Penske Entertainment? Other than Chip Ganassi and Roger Penske, do you think all of the other owners were secretly applauding Andretti for speaking up?
Some say this should have been kept behind closed doors. I’ve always been more in favor of transparency and letting the fans know what’s really going on. But you can’t put the toothpaste back into the tube. It’s out there now. The question is – will anything be done about it, or will Michael Andretti just be painted as a malcontent rogue, who doesn’t know his place?
This is going to be a fascinating story going forward. I really don’t know which side is right. I see both sides. But it’s going to be interesting to watch how this plays out. Get your popcorn ready!
George Phillips
Oilpressure 
March 13, 2024 at 10:53 am
Michael started driving Indy cars in a great era. He saw what the series was and it’s prestige. I think we have seen it slip since then for a number of reasons. We need Michael Andretti and Roger Penske to succeed in this. Michael made some great points. When Roger purchased IMS and the series everyone was overjoyed. I think many are awaiting that growth.
March 13, 2024 at 11:00 am
Seems like Michael has made a lot of very wealthy friends in the past few years with the Gainbridge/ Group 1001 folks. Perhaps that’s who he’s alluding to when he suggests there are people out there with the resources to invest in IndyCar.
If that’s true, maybe it would be nice if Penske sold off the series and a minority interest of the Speedway to these deep-pocketed interested parties.
But, as you mentioned, then the Speedway and the series would be owned by separate parties. What happens when the Penske family doesn’t see eye-to-eye with the series’ owners on some matter? How would that affect the 500? Would the Penskes then use the 500 as leverage against the series to get what they want? Could be a big mess.
March 13, 2024 at 12:27 pm
Michael should figure out how to get his cars to finish races before throwing too many stones. Roger saved the series in 2019, he’s not going to waste money despite what fans want.
March 13, 2024 at 12:51 pm
I think Michael raises some fair points, but his bull in a china shop approach to making them is likely to ruffle feathers even beyond Penske’s offices. I also think that Michael does not fully grasp the financial situation of the series and what may be necessary to keep it from running deep in the red. It is easy to throw good money after bad, and there has been a lot of that in the last 30 years in American open wheel racing.
That said, I do think Penske’s group struggles to grasp the showmanship necessary to succeed in sports entertainment, especially when you aren’t an organization that is entrenched in the consciousness of most sports fans (much less a sport that has been in an identity crisis for at least 50 years).
March 13, 2024 at 1:09 pm
I have owned a business since 1974, and another since 2003, and I know a business owner has to continually invest in growing the business for it to grow. Cost management matters, but that focus does not grow a business.
I think the Hulman family decided to stop putting money into an enterprise that had peaked and did not have a long term future, and they knew a person who had lots of money and history of success in that enterprise, and who would want to keep the enterprise alive to preserve his history of success in that enterprise.
What became the INDYCAR series started with the growth of the automobile and the interest of many to compete with these new machines.
More has changed in the last 110 years of human life than changed from the emergence of humans to the beginning of the 20th century. This season’s opening race was a good example of some of that change. Auto racing used to be about who could travel a certain distance faster than other competitors. Now the focus is much more on how far one can go using only a specific amount of fuel. That reflects how most people look at operating their personal vehicles.
I still remember in the late 1980s walking North with then Director of Photography Ron McQueeny in a very crowded IMS pit lane, looking at the massive practice or qualifying crowd in the stands. We were talking about the increasing danger of the crowd in the pits as more and more “tourists” were allowed to join credentialed media there, and I gestured to the huge facility that is IMS and said that some day none of it will exist. Ron was surprised, but did agree that the day would come when life would be so different that I might be right.
That time is now about 35 years closer than it was then. I covered my first 500 in 1972. I am not aware of anyone other than A.J. Foyt and Penske who had a direct connection to IMS and the 500 that year who still have an active direct connection to management, competition, or media coverage. In another 10 to 15 years we will all be under dirt.
Hopefully, life on Earth will continue for humans, but I doubt racing obsolete variations of ground transportation will be a focus for many of them.
I will continue to follow INDYCAR this season with great interest, but I doubt that I will want to invest so much of my remaining time in following the series beyond September.
March 13, 2024 at 9:31 pm
“This season’s opening race was a good example of some of that change. Auto racing used to be about who could travel a certain distance faster than other competitors. Now the focus is much more on how far one can go using only a specific amount of fuel.”
I would contest this point, at least in regards to this season’s opening race. The fuel saving we saw in this past Sunday’s Indycar race, uninteresting as it was, was done entirely for the purpose of traveling a certain distance faster than other competitors… because we had fuel tank sizes and a race distance that encouraged saving fuel in order to ensure fewer and faster pit stops. And this is not a new idea, either, you could ask Dave Evans about saving fuel in 1931 (even juicier, you could ask him about gaurenteed starting spots in the 500… yikes!).
March 13, 2024 at 2:16 pm
I really don’t like Penske and his ownership. I hope he will sell soon (I don’t think he will) He wants to run it like a Hitler and no one can say anything negative. The paddock fears saying anything bad about his ownership. That is no way to run a business.
I hate that his race team is successful. No love here for Penske.
March 13, 2024 at 5:06 pm
https://en.wikipedia.org/wiki/Godwin%27s_law
March 14, 2024 at 12:11 pm
Penske Entertainment are proving to be an authoritarian, thin skinned, unimpressive owner of the series.
INDYCAR is a quality racing series which requires better stewardship. Penske must have cut out any financial fat by now. It is time to invest and promote.
March 15, 2024 at 10:56 am
Chip’s right about the past, Michael’s right about the future.
COVID would have necessitated a complete restructuring of IMS if Penske didn’t buy it that probably would have gutted the series. Penske took an absolute financial bath with grace. That does buy quite a few years in my book as well.
That said, the one glaring COVID error in retrospect (again, very easy to say in hindsight) was not running the 500 in a bubble in May of 2020 and being the only sporting event happening in the country and running it in August when everything else was starting up.
I point this out because it shows Michael’s line of thinking: The series is like a shark, it can’t stay still. CART took the lesson of all getting those wrapped in a bow CanAm dates, then would only make changes to the schedule that were “guarantees,” which meant they were either super safe to the point of no real return (New Hampshire) or were a complete flim flam operation that paid the series in full, then generally went broke paying the guarantee or when the government $ ran out, leaving no long term value.
Baseball can be run like that, but they don’t have a competitor. F1 is still strong, in 2016 Montreal was selling Groupons, and even in 2024 every ticket is still 2x or more at resale. And apparently they’re moving on Chicago.
I don’t fault Roger for not moving the last few years, but Michael is very smart and I think made a good move sending up the flare over the weekend: Roger has to move now.