Thursday, July 2, 2009

George Attained Major Goal

(by Bruce Martin versus.com 7-1-09)

Not even Tony George could withstand the ire of his three sisters, who ganged up on their brother and ousted him as President and CEO of the Indianapolis Motor Speedway Corporation but in the end, Tony’s ultimate decision was quite clear: Either I run all of it, or I run none of it.

Not only did George agree to leave his role as the ultimate leader of all Hulman George companies, he turned down the one job the family actually wanted him to take – to be the CEO and leader of the Indy Racing League, the sanctioning body of the IndyCar Series.

As of today, George is just a member of the board of the family-owned IMS Corporation. For the man who led the company when he assumed the roles of president and CEO in 1990 until Tuesday’s board meeting, he guided the company through a period of unprecedented growth even if he had to broker the popularity of the Indianapolis 500 to make that happen.

While his lasting legacy will be the creation of a new series in 1994 that began competition in January 1996 as the Indy Racing League – and the ultimate split of the sport when teams from CART abandoned the Indianapolis 500 before slowly returning with team owner Chip Ganassi in 2000 and team owner Roger Penske in 2001 – he accomplished his one major goal. That was to bring the sport of IndyCar racing and the Indianapolis 500 under the same umbrella of leadership for the first time since 1978.

When George and the IRL were able to outlast CART and later Champ Car, he was able to orchestrate unification with Champ Car boss Kevin Kalkhoven in February 2008.

When George made the official announcement at Homestead-Miami Speedway flanked by drivers and team owners from a newly unified series, he never appeared more confident in his role as the unquestioned leader of IndyCar Series.

Instead of the hesitating and stammering, as has been his trademark throughout the years, George spoke with clarity and confidence.

The sport was on an upward path and IndyCar was finally able to become relevant again.

Attendance was up at many of its venues, the crowd at the 2008 Indy 500 was packed, car counts for regular races was as high as 28 and there were actually more cars entered in the Indianapolis 500 than the 33-car starting lineup which meant bumping had returned to Bump Day.

Companies such as IZOD saw value in the IndyCar product and signed a sponsorship and licensing agreement with the series on July 4, 2008. In an effort to better tell its story, IndyCar abandoned ESPN to take a gamble on cable TV partner VERSUS so that the story of the series could finally be told.

With Terry Angstadt as president of the commercial division of the IndyCar Series, new deals were being developed. Capital One and Subway were ready to sign lucrative sponsorship agreements with one of the entities becoming the series sponsor – something IndyCar hasn’t had since Northern Light in 2000.

But when Wall Street giant Lehman Brothers investment bank collapsed on September 15, 2008, it triggered a collapse on Wall Street that sent the financial world into a tailspin.

And that, more than anything else, is what led to the George’s ouster, not because of the money he spent over the years to upgrade and improve the Indianapolis Motor Speedway, or to bring Formula One to the United States from 2000-2007 or the development of the SAFER Barrier which may be one of the greatest safety innovations in auto racing in our lifetime, but the fact the Hulman George family fortune shrunk with the stock market collapse.

Now, it should be pointed out that the Hulman George family is still wealthy, its financial portfolio is worth less today than it was a year ago. But that can be said about many others who have diversified their holdings with financial investments in the market.

So when George’s sisters, Josie, Nancy and Kathi Conforti started to ask, “Hey, what happened to all of our money?” they couldn’t attack anyone at Wall Street or the United States Government.

The only person they could vent their frustration at was Tony George, who reportedly has spent as much as $600 million since 1996, but it’s likely that amount of money was recouped throughout the years by the gate at the Indianapolis 500 and for many years, the Brickyard 400 before it fell on hard times with declining attendance the past five years.

For anyone who knows the history of the Hulman George family, it can be rather contentious – probably not much different than other families around the globe. But most of those families aren’t rich and money often outweighs family loyalty.

So the sisters turned on Tony. Reports of screaming and shouting in board meetings and family gatherings began to surface. One report that was never substantiated was Josie threw her checkbook at Tony in the May 26 board meeting and screamed, “You’ve spent all my money so here, go ahead and spend the rest of it.”

George had already lost his power as CEO after that meeting but when news leaked out that he was ousted, even the sisters had to be surprised at the backlash that followed. George’s mother, Mari Hulman George, issued a statement saying her son was still in power and George met television reporters to say he was still in charge but as the days went on, it became obvious while he still had the title, his decision making power had been stripped.

His fellow IndyCar team owners rallied around George and signed a letter of support that they sent to Mari Hulman George on May 31 urging the board to keep Tony in charge.

Their minds were already made up and when all three sisters, along with Indianapolis attorney Jack Snyder (the only non-family member of the board) voted to oust Tony, it’s likely they expected he would move over to run the IRL.

But in this instance, Tony had the last word.

Either I run all of it, or I run none of it.

And with that, George has stepped away. His vote on the board carries the same weight as Josie’s or Nancy’s or Kathi’s. He will continue to be involved as the owner of Vision Racing but he is no longer in charge of plotting the course of the Speedway or of the IndyCar Series.

Or, maybe he is?

George has been replaced by W. Curtis Brighton and Jeffrey G. Belskus, already members of the executive staff who will both head the Hulman-George companies effective July 1.

Brighton, was previously executive vice president and chief legal counsel, and is now president and CEO of Hulman & Company. Belskus, previously executive vice president and chief financial officer for the companies, is now the president and CEO of the Indianapolis Motor Speedway Corporation.

It’s the first time since the late Joe Cloutier was at the helm that someone other than a member of the Hulman George family has been in control of the company.

Both of these men are close associates of Tony George and both are from Terre Haute, Indiana – George’s hometown.

So when a decision has to be made, which member of the board do you think it going to get the phone call for advice – Josie or Tony?

And don’t be surprised if one day, George regains his power of authority within in the company because the three sisters are going to realize that their brother probably had a better understanding of the business than they gave him credit for.

One of these days, Mari Hulman George will step down as Chairman of the Board of the Indianapolis Motor Speedway, Corporation and a family member will assume that role.

The only family member that deserves that position is Tony George.

As for now, the Admiral has left the deck of the ship and the Captains and Lieutenants are in charge of steering its course.

Knowing both Brighton and Belskus, it’s likely they won’t veer too far off course because they have been heavily involved with the company for two decades.

But when IndyCar was showing signs of growth and improvement, the uncertainty regarding leadership couldn’t have come at a more curious time.

“You can’t pick your families,” said IndyCar Series driver Scott Dixon, who won both the IndyCar title and the Indianapolis 500 in 2008. “Everybody goes through that crap in their life at some point. Any person you have a relationship with nine times out of 10 you don’t see eye-to-eye with them. But they are on a much bigger scale than I’ve ever had to deal with. I don’t think it’s good news but I don’t think it’s bad news either. He hired those people and obviously he has faith in them and is chasing the same vision as he did so that is good.

“I don’t think it changes how I look at Tony George, though," he continued. "I don’t know the ins and outs and what it means but I think it’s kinda sad. He’s not being involved at all on any of that stuff now. Until we see how it flushes out, I don’t know. If it continues to run as it has been and everybody is heading in the right direction to make the IndyCar Series successful it won’t make a huge difference but it’s unfortunate because Tony did a hell of a lot and does a hell of a lot.”

What impact it has on the IndyCar Series is unclear.

“I don’t think it is as big a deal as people make it seem,” driver Graham Rahal said. “Mari (Hulman-George) wrote an email that made it pretty clear she is fully behind the IndyCar Series and the family wanted to see it succeed and the family is behind it as much as ever. Until proven otherwise, you have to believe what is said. I think everything will be all right. I’m not sure it is going to change much at all. When I saw Tony I thought of him as a rival team owner any way. I don’t think it will change much. At the end of the day I don’t know what the circumstances were but someone felt it was time to change and that is what happened. I still feel comfortable and confident that the sport will move forward. I’m not worried about it. I think the sport will be just fine. I’ve been in IndyCar a short time and things have gone well for us. I don’t think things will change that much and a little change might not be a bad thing.

“We will see.”

The good thing is the Indianapolis 500 runs on its own energy. Through ups and downs, the race continues to survive. And time will tell what effect it has on the IndyCar Series – only time will tell on that matter. But look for Angstadt and Barnhart to step up and assert more of their authority in control of the IndyCar Series now that they have been empowered more.

But the laws of unintended consequences can come into play, too. And nobody can predict that.

As the sport looks for leadership, George could have been that man. He survived the bad times trying to start the IRL, stayed the course through the long split and was there to help bring the sport together in February 2008.

But in the end, he couldn’t outlast his sisters, who showed growing concern about the family fortune and how it has diminished for a variety of reasons, mostly because of the economic collapse that happened last September.

That should not diminish the accomplishments George has had during his term as president and CEO that began in 1990 which include bringing NASCAR to the Speedway beginning in 1994 with the Inaugural Brickyard 400, the creation of the Indy Racing League that eventually won total control of the sport in 2008, the creation and implementation of the SAFER Barrier in 2002 and bringing Formula One back to the United States from 2000-2007.

As the Indianapolis Motor Speedway celebrates its 100th birthday in 2009, much of the focus was going to be on the glorious past of the “Greatest Race Course in the World.”

Now, it must deal with changes that will shape the future of the Speedway and the IndyCar Series.

No comments: