IndyCar – Stagnant Momentum

Shortly before the beginning of the 2008 IndyCar season the long cold war with CART/CCWS came to an end when the former series declared bankruptcy after making a deal with the IRL. The IRL offered the existing CCWS teams a free 1-year engine lease and a free chassis for 2 years to any team that would run the entire season. On top of that, the IRL’s TEAM program guaranteed all full time participants 1.24 million USD per car that ran the full season, plus additional bonuses for podiums, poles and Indy.

And while this was initially heralded as the grand reunification that would usher in a new era of prosperity for the IRL, it is now clearly seen as not being the case.

While there have been many positives that have come from the merger, the negatives are piling up faster than any of us IndyCar fans are comfortable with.

The first blow against the newly mergified IndyCar series was a slowing economy. This along with the expiration of the 2008 free engine lease spelled the end of some of the new CCWS teams and helped drop car counts from 26-28 in 2008 to 21-24 in 2009.

The next blow, which may prove to be far more critical, was that ESPN/ABC warned the IRL that they would not be showing the entire schedule of races in 2009. This prompted the series to seek out a new TV partner to carry the remainder of the races that ABC/ESPN did not want to show. As we near the end of the first full season of the Versus TV contract, we have seen the ratings fall from a typical 1.0 on ABC to .2-.4 on Versus. The typical Versus race has less than 300,000 watching it. By comparison, more people attend the Indy 500 than watch the Versus races on TV. Granted, the Versus telecast is a vastly superior product when compared with anything that ABC/ESPN has provided over the years, but that alone does not make the series viable.

Now, Versus is pushing their weight around with DirecTV, trying to get more favorable payment for their product. As of right now, DirecTV does not carry Versus and something like 1/4 of Versus’ total subscriber base came through DirecTV. At the center of the issue is the fact that Versus is owned by Comcast, a direct competitor to the satellite TV giant. If the dispute continues, Motegi and Homestead will not be available on DirecTV.

Also showing poorly for the series was their inability to land a title sponsor. The league is reportedly looking for a title sponsor who is willing to spend 10 million USD a year for the right to be included in the series title. Talks in 2008 reportedly stalled when potential title sponsors learned that all the races would not be on ABC/ESPN, but instead would be on a relatively obscure cable network. Now we are hearing word again that the league is in talks with a new potential title sponsor, but I for one am not holding my breath.

Another potential deal that the series has been pursuing is a 2010 season opening race in Brazil which would include lucrative terms for the IRL and their teams. As of yet, no official location has been announced for the rumored race, and no terms have been announced for the teams. The longer it takes for this highly publicized deal to be finalized, the more likely it is that the whole thing isn’t going to happen.

On top of all these troubles, the current situation with Tony George and Joie Chitwood no longer being part of the management of the IRL and the speedway brings to mind several concerns. Many have suggested that Tony’s removal from the IMS and the IRL along with Chitwood leaving IMS for International Speedway Corp. heralds the possibility that the family is positioning themselves to sell IMS or the IRL or both.

There is also a general feeling that the Dalarra/Honda package is dated and needs to be updated as soon as possible. The IRL made some very loud moves last year with their manufacturer’s roundtable discussions as they tried to agree on an engine spec for 2011. But 2011 has been pushed back to 2012 and the long list of potential engine manufacturers is now realistically down to 2 (Honda and VW/Porsche/Audi) with a possible outside interest by FIAT. With no real definitive timeline on new engines, one has to assume that these talks have stalled indefinitely. Leading me to question Honda’s future involvement in the series if the IRL cannot generate enough interest to lure a second engine manufacturer in to the series.

With the relative ill health of all most of the teams involved, the IRL may have no choice to push off new engines and tubs until the health of the series is on a decided upswing, but with all of the stagnant momentum listed above, I am starting to lose faith that even 2012 will bring new equipment.

Added to the above is the possible departure of Danica Patrick from the series. Recent news reports place her in ARCA, Nationwide and Cup races next year along with another season in IndyCar at AGR as she prepares to make the jump over into NASCAR. The IRL can ill afford to lose such a marketable name to NASCAR. And it may just add to the general perception that IRL drivers can’t hack it in tin tops. Just ask Sam Hornish and Dario Franchitti about that one.

Among all these concerns listed above is the bottom line concern that has to be fed on a yearly basis. Will the teams be able to generate enough sponsorship to continue. The CCWS refugee teams have to account for their rent-to-own ‘free’ chassis they have been using for the last couple of years. On top of that, they have to generate the same amount of sponsorship money to run the 2010 season, even though the change in TV package has significantly damaged their value to potential sponsors. It is a tough sell, especially in this economy, and it is highly doubtful that the IRL can expect any stimulus money from the government.

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4 Thoughts to “IndyCar – Stagnant Momentum

  1. This season has been a tough one to watch. The reduction in car count during the preseason hurt, and then the quality of the oval racing REALLY hurt. The Versus ratings were expected, but that doesn’t make them acceptable. Losing coverage on DirecTV, may have been the last straw for many potential sponsors and may well but the brakes on the title sponsor negotiations.

    As much as I hate to say it, perhaps the IRL should start looking at Speed as an option. Yes, they’re rather NASCAR-centric, but not as much as they were. There’s certainly a wider range of racing available now, and they do a decent job of covering the highlights of the IRL races and rumors on The Speed Report and Windtunnel. Versus has done an outstanding production job. I love the coverage, but they don’t have the penetration to really serve the league well.

  2. […] on IndyCar’s Economic Problems By phaldis See this story from […]

  3. ATB73

    I have serious doubts about the ” league”. Honda wants the specs like yesterday. The roundtable talks last year were the only talks. There is a Tony George quote that keeps ringing in my ears ” There won’t be a 2013.” I can see the weasle’s sisters selling the whole farm. Right now he is poised to run his sole responsibility into the ground, Vision Racing. Tony George willl be relegated to spot in obscurity, known simply as the bastard who killed it.

  4. Sadly, you may be right, ATB. 🙁

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