(by John Oreovicz espn.go.com 2-4-16)
Imagine the Verizon IndyCar Series as a vessel at 50 percent capacity, with a divided and disaffected fan base that constantly argues whether the glass is half empty or half full.
Now 20 years after the infamous CART-IRL "split" and heading into the ninth season after reunification, IndyCar still looks like it's stuck in neutral.
That's not as harsh an assessment as it seems. Certainly Indy car racing's presence in the sporting landscape today both in America and around the world is much smaller than it was pre-split.
But over a shorter span of history -- say, the past 10 years -- IndyCar is one of the few forms of motorsport that has maintained or is slowly increasing its market penetration.
The modern-day IndyCar Series has a lot going for it: strong manufacturer support from Chevrolet and Honda, a marquee title sponsor in Verizon Wireless and more than a century's worth of heritage and history at the Indianapolis 500, which will be staged for the 100th time in May. IndyCar is arguably the closest and most competitive form of racing in the world on any given weekend.
The problem is that it can't get enough people to pay attention. The series trumpets television ratings that have improved 35 percent in the past two years (averaging 0.76, including the Indianapolis 500), but they conveniently omit that even those numbers are about 70 percent lower than they were at their peak in the first half of the 1990s. Averaging just under 1 million viewers per race, IndyCar's television audience is about one-fifth the size of the NASCAR Sprint Cup Series.
Those television numbers are a huge concern because sponsors perceive value in higher ratings. And that's the biggest issue that the management of IndyCar continues to grapple with. The series may be reunited, with a race schedule and a lineup of quality teams and drivers that harks back to the sport's most commercially successful days in the late 1980s and early '90s. But the value has been sucked out of Indy car racing, and it may never be restored.
The teams' struggle to sell sponsorship is reflected in the car count, which is likely to dip to 22 this year, and the fact that questions are already being raised about whether the Indianapolis 500 can attract a full field of 33 cars for its historic 100th running sends an alarming message.
An indication of how devalued the Indy brand has become was revealed recently when IndyCar and Indianapolis Motor Speedway parent company Hulman Motorsports inked PennGrade 1 motor oil as the 500's first presenting sponsor, for the paltry sum of $4.5 million over three years.
An unfavorable TV contract doesn't help matters. IndyCar's 10-year deal with what is now known as NBC Sports Network to broadcast the majority of its schedule was sold for a reported $60 million; NBC's package to broadcast half of the NASCAR schedule went for $4.4 billion, television revenue that is distributed to the tracks and ultimately to the teams in the form of prize money.
Meanwhile, IndyCar has pretty much eliminated prize money, instead operating a model that pays each member team a $1.25 million subsidy and minimal bonuses for top-5 finishes. On salary and prize money, top Indy car drivers earn about a quarter of what NASCAR stars generate.
To its credit, IndyCar has done a very good job of cutting costs to the teams, to the point where the budget to run a car now -- estimated to be $3 million a year at minimum and up to $8 million at the top teams -- is less than half of what it took to compete in the latter days of the CART-sanctioned series. Much of the credit for that goes to the engine manufacturers absorbing millions in development costs to run their Indy car programs in order to keep engine lease prices around $700,000 per car per season.
Honda and Chevrolet also do extensive marketing on behalf of the series, including event sponsorships, and it's safe to say that IndyCar would be in a world of hurt without them. That's why news of Honda's contract extension through the end of 2017 with an option for three years beyond that was arguably the biggest news to come out of IndyCar's 2016 media day.
Ultimately, most of IndyCar's problems come down to money -- or, more accurately, a lack thereof. It's typical of the sport's bad karma that the 2008 reunification, a dozen years in the making, came at exactly the time when economies in America and around the world began to tank. Tobacco money, which for decades was the lifeblood of a sport that relies on corporate sponsorship more than any other, was already legislated away, and the Hulman-George family, which reportedly subsidized the IRL to the tune of half a billion dollars over the first decade of its existence, cut spending to the bare minimum.
Mark Miles, who has held a number of high-profile sports business roles in Indianapolis, was hired in 2012 to improve Hulman Motorsports' bottom line, and he has succeeded in that regard. IndyCar, after operating at a loss for more than a decade, now generates a small profit, while the number of people who stream through the gates at IMS has increased substantially over the past couple of years, in part due to using the facility as a concert site.
Not surprisingly, Miles remains bullish. In an industry that has trended downward, IndyCar's attendance has held steady or ticked upward at most venues in recent years, and TV ratings and most other measures of awareness of the series are heading in a positive direction.
"Ascending," was Miles' immediate response when asked to summarize the state of Indy car racing entering the 2016 season.
"I think in one of my first opportunities to talk to fans three years ago, I sort of felt like IndyCar maybe needed to apologize because we put our fans through a lot," he said.
"We're not perfect today, but I think the fan metrics are improving. What matters most is more fans paying more attention, and I think that's happening. I think about attracting more fans and I think the direction is good for us, whether they're digital, dot-com, social or broadcast."
The return to classic Indy car venues like Phoenix International Raceway and Road America is a step in the right direction for IndyCar in terms of winning former fans back. But an attempt to stage a Labor Day weekend event in downtown Boston could prove risky; even if the controversial race goes off as planned, history has shown that the odds of long-term survival for downtown street races are slim, with only Long Beach, Toronto and St. Petersburg lasting a decade or more.
IndyCar must also sharpen its focus on safety. The series is generally acknowledged as the most dangerous form of motorsport in the world, with its exposed-cockpit open-wheel cars reaching speeds of over 240 mph in superspeedway trim. Eight drivers have been lost to fatal accidents since 1996, including three dynamic and popular stars -- Greg Moore, Dan Wheldon and Justin Wilson -- and despite significant advances including carbon-fiber chassis construction, the HANS device and SAFER walls, the challenge of balancing speed and safety remains as vexing as ever.
Because it's the 100th running, the Indianapolis 500 is generating additional fan interest, and the true test of whether the IndyCar Series is really on the rise will come after that. The series needs to build on the momentum and energy of that historic event and keep fans engaged with the sport throughout the rest of the 2016 season and beyond.
Longtime followers of the sport have been frustrated by Indy car racing's decline and inability to bounce back as quickly as they would like. The glass has remained half-full for an awfully long time.
But unlike most other forms of motorsports, the IndyCar Series' level finally appears to be rising.
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http://espn.go.com/racing/indycar/story/_/id/14699512/indycar-showing-signs-better-days-lie-ahead
