(by Tripp Mickle sportsbusinessdaily.com 10-1-12)
The board of Hulman & Co., owners of the IndyCar Series, is weighing an acquisition proposal for the open-wheel-racing operation, according to people familiar with the matter.
Former IndyCar Series CEO Tony George has put together an investor group that includes some of the sport’s top team owners — Chip Ganassi, Roger Penske, Michael Andretti and Kevin Kalkhoven — as well as motorsports marketer Zak Brown that recently proposed the board sell them the IndyCar Series. The group has hired the Midwest-based law firm Faegre Baker Daniels and begun a financial due diligence evaluation of the series.
It’s unclear what the George-led group offered the board, but sources said that the group would take over management of IndyCar, which operated at a loss this year, and assume any debt on its books.
Hulman & Co. would retain its majority ownership of Indianapolis Motor Speedway and continue to run IndyCar’s Indy 500 and NASCAR’s Brickyard 400 races. It also could opt to take a minority stake in the IndyCar Series during the negotiations.
George declined to confirm or deny that he had engaged Faegre Baker Daniels or put together a group of investors. He described the “premise” as “inaccurate.”
Ganassi, Penske, Andretti, Kalkhoven and Brown did not return calls seeking comment. Hulman & Co. CEO Jeff Belskus was out of the country last week and could not be reached for comment. An IMS spokesman said the board has a policy of not commenting on board meetings.
It is the second time in less than four years that George, who ran the IndyCar Series when it was called Indy Racing League and is a member of the Hulman & Co. board, has put together a group to take over the series. The first time reportedly was in 2010.
The board was told that Brown, who founded the Indianapolis-based motorsports agency Just Marketing International, would lead the series’ management team if George’s group is successful. It’s unclear how that would work. Brown is still the CEO of JMI, which has built an international operation around Formula One in recent years and continues to work domestically with sponsors of NASCAR and IndyCar. The agency’s investors include Spire Capital and WPP.
If Brown didn’t take the job, sources said the Hulman board discussed the possibility that the group could
hire John Lopes, Andretti Autosport’s executive vice president and chief operating officer. Another logical candidate would be Joie Chitwood III, Daytona International Speedway’s president who was the chief operating officer at Indianapolis Motor Speedway for seven years at a time when George was the speedway’s CEO.
Sources familiar with the Hulman & Co. board said the final decision on selling the IndyCar Series will be made by Mari Hulman George, 77, the board’s chairwoman. She controls the majority of the voting interest in the company. The 11-member board also includes her four children — Nancy L. George, M. Josephine George, Katherine M. George-Conforti and Tony George — and six local businessmen, who serve in an advisory role.
The takeover proposal comes four years after the Indy Racing League and Champ Car merged, ending 12 years of a split among the two American open-wheel racing series. George brokered that deal in 2008 and paid $40 million to create a unified IndyCar Series. He resigned a year later after the series fell under financial pressure in the wake of the recession. Randy Bernard, the former head of Professional Bull Riders, replaced him in 2010.
IndyCar is coming off a difficult season. The series experienced double-digit decreases in TV viewership, had a race in China canceled and began searching for a presenting sponsor that potentially could replace its title sponsor, Izod, before the apparel brand’s deal ends after the 2015 season. That came on the heels of popular driver Dan Wheldon being killed in the 2011 season finale and Danica Patrick moving full time to NASCAR this year.
Bernard met with the Hulman & Co. board on the same day that the George-led group’s takeover proposal was presented. He was scheduled to announce the series’ 2013 schedule Sunday and is trying to expand its number of races from 15 to 19 next season.