Leagues and Governing Bodies

IndyCar pleased with on-track, business progress as season wraps up

By Adam Stern

IndyCar Owner Roger Penske and his business team liked what they saw on track this year, and two years into his ownership, they say they have business picking up off of it as well. The series wraps up its season this weekend at Long Beach after a highlight-filled '21. Notable moments include bringing fans back to the Indy 500; extending deals with series entitlement partner NTT, media-rights partner NBC Sports and several tracks; and having an increasingly healthy on-track product that has included record car entry figures, an exciting youth movement and a growing perception globally that it is a viable alternative for F1 drivers.

TURNING THINGS AROUND: After buying the properties in late ’19, Penske had a rough first year as owner of IndyCar and Indianapolis Motor Speedway in '20 when the Indy 500, which helps fund the entire series, had to be held without fans. However, Penske Entertainment Corp. President & CEO Mark Miles and Penske Corp. Exec VP/Marketing & Business Development Jonathan Gibson told SBJ that ’21 was a much better year and things are back on track from a business perspective. On top of hosting 135,000 fans at the Indy 500 (40% capacity) this May without having an ensuing spike in local coronavirus cases, Miles says IndyCar expects a 20% increase in sponsorship revenue next year, along with increased sanction fees from tracks and a 25-30% increase in international rights fees. The international rights fees are growing in part because of the growing interest that is coming from popular former F1 drivers like Romain Grosjean joining IndyCar. Gibson also said that the renewal period for Indy 500 tickets “is one of the best we’ve seen over the last 10 years.” The track hopes to be back to allowing full capacity next year. In terms of ratings, NBC Sports says it is averaging 1.316 million viewers this season across NBC and NBCSN, up 4% from ’19 and 28% from last year.

START YOUR ENGINES: Gibson, one of Roger Penske’s top execs, said the 84-year-old Penske remains bullish on his purchase of IndyCar/IMS and that “there’s not a day that goes by where we don’t talk about, ‘How do we make it stronger? How do we make it better?’” Among the top priorities right now for Gibson is to land a docu-series deal for IndyCar, as well as to usher in IndyCar’s presence to the sports betting realm. Since purchasing the properties, Penske has retained the top leaders of IndyCar and IMS in Miles and IMS President Doug Boles -- but there has been some change in the structures of the companies, and Penske Corp. execs like Gibson, President Bud Denker and VP Michael Montri are heavily involved in decision making across the properties. Gibson also confirmed that IndyCar is looking into the crypto and NFT space. He also pointed to the addition of Nashville this season as a new “tentpole” event for the series and one that he expects will help grow the sport in an important market.

MEDIA MOVERS: On the media front, on top of working to secure a docu-series, IndyCar is planning out its new video game that will debut in ’23 and has a new revenue-sharing component to its NBC deal that will see the series sell some of the ad inventory for next year. Gibson revealed that the video game will debut in May specifically of ’23, and it’s part of a partnership with Motorsport Games. The series will have a record 14 races next year on NBC. The prior deal with NBC was worth roughly $20M annually to IndyCar, and Miles said there "will be an increase from 2021 to 2022 in the net value rights fee for us." How much of an increase will depend on how successful they are at selling ads as part of the revenue share.

TAKING STOCK: IMS has been in talks with F1 about bringing that series back to Indianapolis, but Miles said that is not “in the crosshairs” for next year. Miles added of ’21 overall: “It’s been a transitional season for us in the context of the ebbs and flows of the pandemic. But it’s hard to be more pleased with the growth and progress achieved so far this year."

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