Thursday, May 28, 2009
Despite rumors, don't look for IMS leadership to change anytime soon
(by Tim Tuttle si.com 5-28-09)
According to a report Wednesday, Tony Georgewas bounced out of his job as the Indianapolis Motor Speedway's CEO. By midday, George had denied it in interviews with the Indianapolis media. IMS followed with a statement several hours later that further detailed the subjects and objectives discussed in the IMS board of directors meeting on Tuesday.
"There was a general discussion about the challenges and opportunities facing all of our companies and where most of our energies need to be spent," IMS chairman of the board, and Tony's mother, Mari Hulman George said. "All of our properties are doing well, given the challenges of the current economy. The Indy Racing League represents our greatest growth opportunity and therefore deserves the most attention at this point."
Added Tony George: "Contrary to published reports, I continue to serve as CEO of IMS ... no changes in leadership or responsibility have been made. We don't normally comment on board deliberations concerning our family business. However, the widespread, inaccurate reports and rumors caused my mother and me to conclude that it was necessary to set the record straight."
George has been the head of IMS since January, 1990, when he was voted in as president by the board. The family-owned speedway faced a crisis of leadership following the death of Joe Cloutier in late 1989.
Cloutier had been Tony Hulman's longtime aide and IMS treasurer and became president following Hulman's death in 1977. Cloutier had been like part of the family. Now, the board of directors -- comprised of Mary Fendrich Hulman, Tony's widow, Mari Hulman George, Tony's daughter and only child, Tony George, his sisters Josie and Nancy and attorney Jack Snyder -- had to decide whether to keep the top job in the family or bring someone in from outside.
Tony George, then 29, was the only candidate from the family to take over primary management responsibilities. Mari, Josie and Nancy had never shown any interest in running the famous race track.
"In the minds of most, I probably wasn't the logical successor at the time," George told me in 2004 for a story in Road & Track. "By my own admission, I probably hadn't attained, or at least didn't feel comfortable that I had attained, as much knowledge or experience or competence going into the business in a leadership role. There was thought of someone possibly being brought in from the outside.
"At some point, consideration was given to me. I had some reservations, but I didn't want to take myself out of consideration. In the end, it was decided it would be best to try to keep leadership of the company inside the family. With some reluctance and trepidation, they decided to give me a shot. I was a bit honored by that, but at the same time, a bit overwhelmed."
George has become a decisive and aggressive leader over the last 19 years. The IMS board has supported his decisions to bring in NASCAR Sprint Cup, Formula One and MotoGP, build a road course, invest heavily in infrastructure and fund the IRL.
The IMS board is largely the same as in 1990, except for Mary Fendrich Hulman, who died in 1998. The only addition has been Katherine George-Conforti, Tony George's sister. Snyder is the only non-family member on it. None of the other Board members are active in the management of the speedway.
The Hulman-George family is intensely private about its business affairs. Parent company Hulman and Company, the maker of Clabber Girl Baking Powder that has 65 percent of the U.S. market, is privately held, along with IMS and many other substantial investments in real estate, energy and banking. Mary Fendrich Hulman's fortune was listed at $140 million by Forbes in 1985 and put her on the famous list of the 400 richest Americans. Forbes hasn't tried to list any of the family members in years, probably because it is impossible to find out what they own.
Given the family history, it seems unlikely they would put an outsider in the top job at IMS. Who from the family is ready for such responsibility? George's son, Tony Jr., Josie's sons Kyle and Jarrod Krisiloff and Nancy's daughter Jesika have jobs with either IMS or IRL, but they are all many years away from being ready to assume management roles.
The board has asked George to prioritize his attention in the IRL, the financial weak link in the family business, and to develop a plan for future leadership, which probably means grooming the next generation for specific jobs at IMS, IRL and Hulman and Company. George is CEO of all the Hulman-George companies. George moved away from the day-to-day decision making at IMS when he named Joie Chitwood president in December, 2004. Chitwood, in much the same manner as Cloutier with Tony Hulman, has gained the family's trust and confidence and it leaves George with more time to focus on the IRL. George seems likely to continue as IMS CEO until some family member is ready to replace him.
Don't count on that happening anytime soon.