"Any time that I can be out at the Indianapolis Motor Speedway, you're going to see a smile on my face." - Dan Wheldon
"It's crazy how the Indianapolis Motor Speedway can make you so emotional. I went from the highest of highs to the lowest of lows in less than 24 hours." - Alex Tagliani
The question that has to be addressed by out of the box thinking is:
How do we develop the next generation of American/Canadian superstars while also giving them a vehicle (not Indy Lights) to have a fanbase and hype when they arrive in IndyCar?
That's where you make your gains.
RB has to come up with a plan that is viable. He cannot dream something up that owners cannot afford. You can easily say take away the TEAM money have them race for purses, but forget that these "greedy" owners have to do things like make payroll and pay insurance premiums among other expenses. They are not in the racing business for charity. If nothing else, bare minimum, they should be able to break even at the end of the year. They are spending money so you can be entertained. Without them you have no series.I do however believe that once that fire is put out, the team owners will again complain about something and so on. RB has to stick some sort of plan and ride it out, for better or worse, IMO.
The Ayn Rand of Indycar
No one had to badge the Offy.
Well, let's see....outside the box.
-Publicity.....release a video of Helio and Dario having a bloody punch out, with both loudly threatening to run each other off the road at the next event.
-Innovation....allow the Delta to run as an option next year. If someone tries it, the results will be an exposure bonanza.
-Finance....hey Tony, come on over here good buddy...oh, and bring your checkbook.
-Patriotism....American drivers get an extra 200 rpm. That'll show those pesky furriners.
-Control...give ownership of the series to Dallara. Now let's see you ingrates complain!
-Give up...aah, just bring whatever the h*ll cars your want to the next race. We don't give a d*mm.
So much fun, but I'm tired now....back into the box.
Just because the team owners don't like RB's plan that doesn't make it viable? It is obvious RB has in the past conceded to the team owners (i.e., delaying aero kits until 2013). He stuck his neck out there and now 2013 rolls around and team owners are again trying to get the aero kits delayed again.
Are you saying if Indycar went back to purse paying races instead of the TEAM money, teams wouldn't race? How did teams survive prior to what 2006 or 2007?
Again, I agree the cost issue is a major FUBAR that needs to be rectified if RB is to have any true leverage regarding the 2013 aero kits.
If ANYTHING, at least introduce them for Indy.
Thank you because I have been calling for just that for a long time and it's the type of change I thought randy would be bringing coming from a different sport that traveled to different venues.
But what Randy has to do beyond helping promote the events is charge the tracks less, maybe way less and form a partnership to share the revenue. It's easy enough to track where most tickets are sold so if INDYCAR sells tickets via the INDYCAR Nation club then they get a 60/40?? share of that revenue. If the track sells tickets via orders that come in to their website or ticket office they get the 60/40 share. Whoever sells a suite or billboard, or finds a title or presenting sponsor gets the larger share. If INDYCAR believes, like some devoted fans, that the tracks aren't doing enough then it should be easy for INDYCAR to prove it by going out and selling more than the tracks have in the past.
If he made that offer to tracks I think he would find enough willing to sign on for his 22 races at least.
"You can't arrest those guys, they're folk heroes"
"Well most folk heroes started out as criminals"
Maybe charge a fairly low sanctioning fee and share a percentage of revenue at a agreed upon rate?
Doyouloveit ... et al ....
Randy is in a "box" right now. His (the series) income sources are drying up ....
* It appears that many race tracks are balking at paying the sanctioning "fee" that Indycar wants to charge. Andretti had to get some kind of "break" to hold the Milwaukee and Baltimore races, and the rate tracks turned down Randy when he tried to replace China doesn't bode well for adding tracks to next years schedule.
* Even if Izod sticks around, it is clear that they aren't very enthusiastic about Indycar anymore, and anyone (Verizon, Sunoco, etc.) contemplating becoming series sponsor is not gonna pony up a lot of cash with the current state of the series (TV ratings, attendance, internet presence, etc.)
* TV contract .... assuming NBCSN/ABC is even willing to continue the current contract, what happens when this one ends ?? Who's gonna renew and continue to PAY Indycar to broadcast the races. Every cable and network channel out there knows what the ratings look like for Indycar, and knows they continue to FALL. Does ANYONE think NBCSN is looking at making the Indycar series a cornerstone of their new lineup ?? They know darn well they'd make far more money selling the Indycar slots to infomercials, or get more viewers playing re-runs of 20 year old Olympic events, than continue with Indycar. I suspect once they've decided on what the "strategic" direction is for NBCSN they'll ask to end the current contract early, offering either a reduced lump sum buyout, or threaten to continue to use the current broadcast team with the caveat that they'll be nodding off on heroin during the broadcast ... think Scott is boring and out of touch now ?? Comatose may not be much worse, but it certainly won't be better.
So, where to get the money ....
At this point the series is sinking, and if I was Randy I would try to get the H/G family to financiallly support it one more time. The choice for them could be made very clear ... don't support the series and all that money that TG spent is literally money flushed down the toilet ... Support it and buy Randy some time to continue to try and turn things around. Would they go for it ??? Probably not, and in fact Randy may have already been told that under no circumstances will the family open the checkbook. But it IS an alternative. Without it, how much longer can the series be self-supporting ??
As far as selling the series/IMS ... why wouldn't Randy be involved ?? What is IMS worth without a supporting series for the 500 ?? Would NASCAR or SMI or ISC have any interest in buying the track ?? Without a racing series it becomes another racetrack in a real estate market that sucks. What would you pay for IMS right now as a race track ??? You'd probably have to sell the propeerty to a commercial developer who would then tear out the facility and build housing/offices on the property ... and they'd want a discount for the teardown costs. Or SMI or ISC offer fire-sale prices for the property because without the 500 how much revenue could the facility generate compared to the daily costs of maintaining the property ??
I AM thinking outside the box ... you're the one that seems to believe that there is some "magic bullet" that no one has thought of yet .... there isn't without a major change in the series. Sell it, merge it, close it, whatever, but continuing down the current path looks like a complete dead end.
Anyone else find it ironic that Ed Carpenter is complaining about costs in the series owned by his family?
You keep forgetting that prior to 2006, Toyota and Honda were providing a lot of support for the teams. With their assistance, a few of the top tier teams like Ganassi and AGR were able to provide primary sponsorship for less dollars. All that did was devalue that sponsorship cost to the series for all the other teams which weren't on the T & H teet. I believe John Barnes spoke to that very issue a few years ago. Once the T & H money disappeared, the teams were forced to fend for themselves, by then many were stuck on the Hulman dole.
One way or another, somebody has to pay. If you want formula race cars at Indy in May that can go 200 + mph somebody has to pay. I don't think the owners wish to do it out of their pocket, it's not for them to do that. Then it comes down to the Hulmans. How much is it worth to them? Can they afford an alternative if these guys just decide to say screw it?
Is what's best for the NFL not what is best for the team owners? Should what's best for the shareholders of any company differ from what's best for the stockholders?
Why is it you think that the family who owns a track's revenue stream is relevant, but those who build and field the cars needed to run the events is irrelevant?
Again, so should the series pander to the complaints of the team owners all the time? Why can't a middle ground be found? Everyone has an opinion and think they can run the series better than RB or anyone else, thus my point is that RB has to stick to a model/plan and keep to it....either team owners adapt or die. Real racers will race. Either way, is the status quo (which essentially the team owners want) the best long-term model for growth of the series?
Last edited by Doyouloveit?; 07-06-2012 at 10:25 PM.
RB screwed the pooch when he paid a 6 fiqure rental fee to Las Vegas. Now every SMI track wants the same deal and all other tracks are starting to "get the picture" as well. RB's business model is toast.
And contrast that with NASCAR ... according to this article ...
On average a track holding a NASCAR race weekend receives about $10 MILLION dollars as their share of the TV revenues, and gets roughly around $7 MILLION dollars from ticket sales. Contrast that to Indycar where the track has to risk actually losing money if ticket sales are poor (and they have been for the last few years at many tracks).
Randy calls Pocono and says "hey, we'll rent the track for a few hundred thousand dollars and lets see if you can make enough money from ticket sales to pay your expenses ...." You think they're gonna be thrilled at that ?? And even if they take the deal ... how long can Indycar sustain that model ... it costs the series real money to sanction a race ... you're basically back to the TG model ... spend OPM (other people's money) to keep the series going.
My only 2 cents I can add to this is that if RB were to go the HG family for cash, I would hope he then would spend some on re-working the TV contract so that some of the races currently on NBCSN could be pushed to NBC. They've got 9 currently. Just 5 maybe? Combined with 6 on ABC would give us at least 11 on major networks.
I'd rather have 10% of the world interested in the ICS than 50% of US that NASCAR currently has
RB's model/plan is designed to maximize profits/minimize losses for the series owners, with insufficient regard to the impact on team owners. It is a profit growth strategy but not a series growth strategy, and it is short term thinking. It is akin to a publicly traded company being operated in a way that benefits the c-level executives to the detriment to the overall strength of the company and stockholder value.
The reality is that RB wants to make, or is making certain decisions in order to increase interest in the series for the purpose of giving more profit to his bosses. The reality is that RB is attempting to acquire more profit for his bosses without regard to the financial impact on the teams, and without the intent of transferring the benefit of the changes to the teams.
The statement that the team owners essentially want the status quo is illegitimate. They want series growth as much as the series owners do... but growth cannot come at expenses beyond their means. Expecting the owners to foot the bill to cover the gap as they have been while the series boasts of turning a profit is insanity from a business perspective.
There are races coming up in Canada, right? The value of those events is comprised entirely of the equipment and the drivers that the car owners are bringing to the table. So how can the fact that the series is structured to offer greater financial to the owners of a track in Indiana, but greater financial risk to the car owners participating in the event be justified? It cannot be.
Randy came into the series saying that all boats rise on a high tide... yet he has no trouble knocking holes into the hulls of the ships on which the series must float.
Yeah, well, we hope not.
If interest is increased, doesn't that create more sponsorship value for the team owners to recoup? What is he doing, specifically, to transfer that revenue to the series owners and bypass the teams?The reality is that RB wants to make, or is making certain decisions in order to increase interest in the series for the purpose of giving more profit to his bosses. The reality is that RB is attempting to acquire more profit for his bosses without regard to the financial impact on the teams, and without the intent of transferring the benefit of the changes to the teams.
In the past, hasn't there been a disconnect between the teams and the fans, in that the teams could make unpopular decisions, accept ridebuyer money, etc., which ultimately transferred value from the series and its more popular events, to those individual team operations, without re-investing in the things that would keep the fanbase growing?
I haven't seen the balance sheets, but I've heard that the series has lost an awful lot - haven't they also been providing subsidies to the teams in a number of ways, including direct payments, as well as providing the direct investment into the one event that seems to have proven to be the one that generates the teams' most value?Expecting the owners to foot the bill to cover the gap as they have been while the series boasts of turning a profit is insanity from a business perspective.
Last edited by Turn13; 07-07-2012 at 09:15 AM.
"Each day well lived makes every yesterday a dream of happiness and every tomorrow a vision of hope. Look well therefore to this one day for it, and it alone, is life"
~ Sanskrit poem attributed to Kalidasa, "Salutation to the Dawn"
The biggest transfers of value have come from the series and its insistence on running grossly unpopular events. That results in owners being forced to take valuable income from popular events like Indy and "re-investing" that in grossly unpopular events that cost far more than the revenue they generate for the teams. This is what leaves the teams with nothing left over to spend on drivers and parts.
Direct investment into the one event that generates the team's most value? This can only be the 500. Are you suggesting there has been a single Indy 500 in our lifetime where revenues did not exceed expenses? Investment into the track facilities for F1 or other non-500 activities are not investment into the event that benefits the owners.
When you watch Indycar this weekend, remember this. The race you watch can take place without Randy Bernard or his bosses being involved. It cannot take place without car owners. Once operational costs are covered, there is not any reason why every single penny of remaining revenue should not be distributed among the teams. That includes television revenue as well.
The Hulman family does not add value to a race in Canada.
I don't know that any of the rich families and people that own everything add value in particular to the things they own. They just own them. Somebody's got to. Does Paris add value to the Hilton hotels?
Owners that also run the show - like Roger Penske, Chip Ganassi - sure. That's different. But most owners hire people to run stuff, and if the stuff doesn't generate a return I guess that capital migrates elsewhere.
I would think that some of the stuff the Hulmans own generates value in Canada - the Indy name, for example (though no doubt much less these days) - but who owns it is none of my concern, really - it's always going to be somebody, and most of the time I couldn't name the names.
I own stock in a number of companies - most of us do. But I doubt I can say what "value" I bring to the 20 or 30 electric utilities in the energy portfolio of my 401k, other than the capital I allow to linger there.
Last edited by Turn13; 07-07-2012 at 10:55 AM.
Based upon your post, are you suggesting Indycar should essentially 100% subsidize the teams (I.e., transferring all benefits to the teams)? Then can Indycar tell teams who to hire as a driver, mandate how much they pay drivers, employees, etc.? "Hey Chip, since Indycar is covering your nut and then some, please put Graham Rahal in your car and fire Scott Dixon". I think that is the last thing the team owners want.