Winning: The Indy Racing League opens its eighth season with its best teams, sponsors, attendance and TV ratings. (Cover Story).
"When I started out in '95 and '96 I thought we'd see this kind of success in the first three or four years," says Tony George, founder, president and CEO of the IRL and president and CEO of the Indianapolis Motor Speedway. "For the most part, it's finally to the point in its maturity that I am starting to feel comfortable. It's been a long, tough building process. We've gone through a lot of troubled times, but 2003 is shaping up to be our best year yet. Our 'future is bright."
The IRL's trends are up in every major category, says Zak Brown, president of Just Marketing, an Indianapolis-based motorsports marketing firm. TV ratings, attendance figures and the quality of its teams are all looking good. Only the number of cars is down, and that's a sign of the times, not the quality of the series.
An exodus from the CART Champ Car Series began a couple years ago, says Brown, when Roger Penske moved to the IRL and others followed. Bobby Rahal, former Indy 500 champion and former CART president, now has afoot in both CART and the IRL, running cars in each. Six months ago some people didn't think CART could get 18 cars on the grid, which it needed to do contractually for its sponsors, Brown says, but it did. "It's in business, has a foundation laid, and needs to hustle."
"The Indy Racing League ... more or less began in desperation with ragamuffin teams, faceless drivers and one engine," notes Robin Miller, the popular and colorful former Indianapolis Star racing reporter, now covering the sport for ESPN.com. He says it is now "sporting a total makeover and a sizeable swagger. Nothing about the old IRE is recognizable and the new look is fast, familiar and formidable."
BEHIND THE SCENES
The business side of the IRL has seen steady, methodical growth, from five IRE employees at the start to a team of 52 who now work exclusively for the league, says Ken Ungar, senior vice president of business affairs. Everyone's working on a three-prong plan to move the organization ahead, he says: make every event a big event, improve the brand image and make drivers stars.
It's easy to see why the Indianapolis 500 is the biggest single-day sporting event in the world, says Ungar. It's not just a race, it's a spectacle that draws casual sports fans, not just race fans. So when the IRL works on its goals of making every event a big event and improving the brand image, it keeps the success of Indianapolis in mind.
"The Indianapolis Motor Speedway is the largest sports stadium on earth," he says. "With three world-class events, it has clearly established Indianapolis as the racing capital of the world," The IMS added the Brickyard 400 to NASCAR's Winston Cup lineup in 1994, and in 2000 added the U.S. Grand Prix, a Formula One race.
For 36 weeks this year, the IRL's new Fan Experience will travel the country trying to convert casual sports fans into open-wheel racing junkies, especially in. cities where the IRL races, building the anticipation for race day and upping ticket sales. Included in the Fan Experience are driving simulators in actual Indy cars where drivers can race each other, video game slot-car racing for kids, and the Indy Pit Stop Challenge, where fans get to change a tire and do a mock refueling.
To further raise its brand image, the IRL revamped its Web site, making navigation a breeze, adding more driver information, screen savers and an online store. You can also access live streaming audio of IndyCar Series races, receive daily updates on your PDA or mobile phone and participate in fan polls. A new video game, produced by Codemasters and called IndyCar Series, also comes out this month in time for the 500. It's all about hyping fast, competitive, exciting racing. Five of the IRL's races last year were decided by less than a tenth of a second.
"There's been no concerted effort at driver marketing in the past," says Chris Bowers, on the job since February as director of driver marketing for the IRL. He's changing that by using his marketing background to focus on eight to 10 drivers--initially--to develop their brand and market them individually.
Bowers and a contracted marketing firm will ask: "Who's winning the most? What are they like off the track? Do they have a compelling story to tell? Who do they identify with? Are they big into X Games? What's their lifestyle?" They'll use the information to work on "sponsor activation," getting sponsors to use drivers as spokespersons. Then they'll concentrate on other markets such as TV guest spots, cameo appearances and talk shows. The interest in "X Games"--referring to such extreme, thrill-seeking sports as skateboard jumping, half-pipe skiing and the like--signals an interest to attract younger fans.
The three most popular drivers right now automatically make his list, including Sarah Fisher, the most popular driver in the past two years and the first woman to win a pole position in an Indy-style race (Kentucky Speedway, 2002). Sam Hornish Jr., IndyCar Series winner in 2001 and 2002, and Helio Castroneves, Indy 500 winner in 2001 and 2002 complete the top three. Buddy Rice is "almost a walking X Game," says Bowers and is definitely on the list, with mini-bike races in his neighbor's back yard and hanging Out with big-board surfers.
Meanwhile, driving for his grandfather's team is A.J. Foyt IV, who joined the IndyCar Series this year and made history as its youngest driver ever. He'll turn 19 on race day at the Indy 500.
It's time for IndyCar drivers to enjoy the same kind of popularity that some NASCAR drivers have earned, Bowers says. "We're in a position where the league has the best product in terms of close competition, wheel-to-wheel excitement, 220 miles per hour side-by-side racing. In the IRL a mistake will cost you; NASCAR can bump. They have fenders and we don't."
The IRL is struggling in this economy, just like every other business, says George. "There's a lot of uncertainty in the public's mind. We try to provide an affordable entertainment opportunity for people to consider. From the standpoint of sponsorships, we've managed to land some pretty good deals in some pretty tough times."
He won't elaborate on deals in the making but says they're close to moving a soft drink, malt beverage and fast-food company to their "official status" list. Every bit as important as adding new sponsors is keeping the old ones happy, says George, making the relationship work for everybody.
George is president and CEO of the family business, Hulman & Co. in Terre Haute, which owns the Indianapolis Motor Speedway. His mother, Man Hulman George, is chairman of both. As a privately held company they have the luxury of keeping their business details to themselves.
Not so for CART, which went public in 1998, opening at $16 a share and now hovering at about $3.50. Its reported sponsorship revenues are down from $21 million in 2000 to $10 million last year, and it posted a net loss of $14.5 million, or 99 cents a share, last year. For the past several months, rumors have circulated about taking CART private again.
George says he finds it awkward commenting on CART, which a year ago moved its headquarters to Indianapolis from Troy, Michigan. "As we experience our own challenges, they have their own. They seem to focus on international development--have a different discipline of racing. That may provide a distinction that allows them to successfully build and market themselves and allows us to grow and successfully market ourselves as well."
CART's different discipline is racing on temporary street courses and permanent road courses, as well as ovals. George says the IRL will "stick to its knitting": ovals.
Until it debuted at the Twin Ring Motegi track in Motegi, Japan, last month, IRL's schedule has been exclusively U.S. It's the only one of its 16 races this year to be shown taped, although it was shown on the same day--the rest are aired live on ABC or ESPN.
George says he starred talking with the Japanese and Honda Motor Co. several years ago about what goes into building an oval track. Twin Ring was built in 1997 as Japan's first oval and hosted CART races from 1998 through 2002. George made a trip over a year ago and hammered out the deal. A lot of manufacturers and suppliers have corporate or world headquarters in Japan, he says, so it made sense for the IRL. Honda owns Motegi and moved from CART to the IRL as an engine supplier this year. Toyota also moved to the IRL this year, joining Chevy and offering three engines for the first time.
Although it lost Japan, CART continues a heavy emphasis on international races with eight of its 18 scheduled races this year outside the U.S.
Will more international races be added to IRL's schedule? Nothing's imminent for 2004, says George, although he's had a number of conversations; 2005's a possibility. "We want to be primarily a U.S.-based motor racing series that has a commitment to providing profitable, quality, exciting races at some of the great permanent venues that have been built in the U.S. in the last six, eight, 10 years. In June, July, August, it's important for us to be here. There's little room for growth internationally."
Now that it's 8 years old, is the IRL all George envisioned? "It's certainly nor as successful as I'd like it to be" he says, "but it continues to show positive growth. We continue to be trending up. I want us to be the best we can be. It's going to take some time to build partners and alliances to take us to the next level."
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|Title Annotation:||American open-wheel racing expanding|
|Publication:||Indiana Business Magazine|
|Date:||May 1, 2003|
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