As the Indianapolis 500 ticked over to lap 101 on Sunday, a thought occurred. How on earth is this race actually happening?
The Indy 500 is the biggest single-day, single-venue sporting event in the world. Over 400,000 people pour in each year and among them are some of the most loyal and traditional fans of anything you’ll find anywhere in the world, never mind just motorsport.
And yet this year, thanks to the coronavirus, no fans attended. Let’s say 250,000 people pay the minimum entry price of $35, that’s a net loss in 2020 of almost $9million. How can a venue the size of Indianapolis survive that big a loss?
Luckily for many, it’s mainly thanks to Roger Penske’s purchase of the venue earlier this year.
Some quibbled at Penske purchasing the Indianapolis Motor Speedway and IndyCar at the start of the year. How can things remain unbiased when someone competing in a championship, owns it? It’s a good question that we can’t really answer other than that it’s happened and there’s nothing anyone can do about it.
Penske has excelled as a team owner, winning 18 Indy 500s, but he has been more successful as an entrepreneur where he has amassed a fortune in the region of $1.7billion according to Forbes.
While the question of the championship remaining impartial will last as long as Penske owns and competes in it, the acquisition may have saved the most important thing about IndyCar – the Indy 500.
Regular meetings have taken place between Penske and local health officials throughout the coronavirus pandemic, and the decision to reduce to first 50% then 25% capacity and then no fans at all was not a decision taken lightly.
“We are all saddened by the fact we can’t have fans here, nobody more so than Roger,” explained IMS president Doug Boles. “I think a lot of it is because from the very moment he got here, his interest in investing in the facility was completely around ‘how do we make the customer experience when they come through the gates of Indianapolis Motor Speedway better?’”
Evidenced by Penske being spotted – at the age of 83 – carrying a ladder and chipping in with work before the Indianapolis road course IndyCar race in July, the changes that have been made at IMS are enormous.
Since Penske took over ownership from the Hulman family’s eight-decade tenure, 3000 tonnes of concrete, five miles of fencing and 4000 gallons of paint have been applied to the grounds. Pathways and public areas have been reworked, 30 TV screens of varying sizes have been installed to help fans (when they return) keep up with the race, toilets have been installed or upgraded, and new concession stands added. You can actually tell by pictures from last year and this just how much has changed.
Let’s stop and contextualise that for a moment. Not only has the speedway lost millions in revenue without fans attending the 500 – and we haven’t factored in things like food, drink, admission to the IMS museum in that – but it has invested what must be at least millions in upgrading the facility too.
When asked about the financial impact of losing the fans and how that affects the future of the speedway, Boles adds: “The one thing, maybe the best way to talk to the financial thing is a Roger anecdote.
“First thing he did when he came here was: ‘How do we make the fan experience better?’ He never asked us or told us, ‘here is how much money I want to invest’. It was, ‘what can we do to make the fan experience better?’
“All of our conversations walk through the challenges, especially this summer going from a full house to 50% to 25%, then ultimately to no fans, there wasn’t a conversation about ‘what does this do financially for us?’ It’s always been, ‘how do we do this race in a responsible way that’s fair for our community and good for our fans?’
“While, yes, there’s a massive financial implication to this, it’s not something that really weighed into the decision factors. It has not slowed Roger Penske down in terms of his focus on making the Indianapolis 500 even better than it already is.
“It’s amazing you can go through a period like this and be as encouraged as I think most of us here are with the future for the Speedway. You’re right, there’s a financial impact.
“The biggest part is there’s an emotional leader who loves this place, knows the future is bright. Each one of us that has an opportunity to work with him every day is 100% onboard. I don’t think we’ve ever been in a better spot.”
Obviously, no business should get into a situation where it is too reliant on being underwritten by its owner, but Penske has stepped in while the pandemic has hit hard. It could well safeguard the future of the venue long term. Perhaps the Hulman family – which has made its money as a wholesale food supplier – would have done the same. Maybe it wouldn’t have been able to.
Penske understands the above because he’s a businessman. We’ve already discussed the murmurs that there’s a conflict of interest in him owning the championship he races in. But the upside is, he understands how the series works, how the big and small teams are funded, the outside factors that affect the series including sponsorship and so on.
You may have read the quote from Boles above and thought, ‘Well of course Penske’s employee is going to say nice things about him!’.
I understand that. That’s why I asked Penske’s fiercest on-track rival, Chip Ganassi, about his opinion of the current leadership…
“I think the entire paddock or the entire ownership group, I should say, is probably very happy with how Roger’s come in and approached the season,” Ganassi replied, also speaking before the Indy 500.
“Obviously he’s had to make some very difficult decisions. But I don’t think they’re in this for one or two years. It’s a generational thing.
“When you take that view of it, I don’t think anybody could be happier with how they’ve approached it.
“Just being around the Speedway, it looks different to me. You fly over it coming into the airport, it just looks different from the air. It looks better.
“It’s typical Roger. Everything is done in a first-class manner. I really, really couldn’t be happier.”
Later on Ganassi went into more detail on the IndyCar Series and how its teams are handling life under Penske: “I don’t want to get into the business of the ownership of the teams, how we interact with Roger.
“I will tell you that it’s been probably the best communication that we’ve ever had with any ownership group in any series I’ve ever been in. I think that’s because Roger started as a team owner. He understands the questions you have as a team owner.
“Four or five times now we’ve had an email that said, ‘we need to have a quick owners meeting here, this afternoon, tomorrow morning’. You have a call-in, it’s all organised.
“It’s really good because he’s kind of letting us know when he knows about certain things. He’ll say, ‘hey, this is what I know, this is what we’re doing. What do you think? Anybody have any questions?’
“I don’t know that there’s been any huge difference of opinion really from the ownership to how Roger feels. I think it’s more or less a welcomed thing to be asked the question. He’ll say, ‘hey, this is what I’ve decided, I hope you all agree. Does anybody have any questions?’
“I don’t think the Speedway or the series could be in any better hands right now.”
That communication has been vital in the circumstances. The prize pot for the Indy 500 was slashed in half and many teams have struggled or are struggling to stay afloat due to the current situation. Also smaller track owners and promoters are having to put on races without fans, without the backing someone like Penske brings to IMS. The series has attempted to help those promoters and circuits out, but still, it’s not easy.
As well as all that, there’s the impending issue of a new IndyCar engine and a new chassis, both of which are set for 2022 but could be delayed – or on the chassis side, rolled out in chunks. While – like at Indy with Boles and Mark Miles who remained from the Hulman organisation – Penske has IndyCar president Jay Frye leading the way, he’s still hands-on and using his contacts the best he can.
IndyCar is in a situation where it wants to introduce the new rules and capitalise on all the work it has been doing to attract a new engine manufacturer with keeping costs down, delaying things in places to give teams the financial flexibility to stay afloat and be in a position to be part of the IndyCar series long term.
You can see how many plates are spinning, and that’s without going into the future of the Indy Lights championship which Penske has ideas for and has been discussing those at length, despite having so many other focuses. It’s a mammoth task.
It was always hard to imagine how any single team owner could own a championship and its biggest venue, I felt there was too much overlap and that it would cause too many issues when things didn’t go to plan. IndyCar’s had a taste of that when Indy Racing League founder Tony George set up Vision Racing, but that team was never a remotely major player in the series – in stark contrast to Penske. It’s not just any team boss owning all the cards here, it’s one you expect to be in title contention every year.
But seeing everything laid out like this in terms of what venue and championship are having to suffer through, the circumstances can’t get worse, but it seems the leadership couldn’t be better.
