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Takeover rumours persist despite denials

3 October 2012

Speculation that the IndyCar Series might be on the verge of being bought out by an investment group consisting of a number of current team owners has once again been denied by the current owners.

“The IZOD IndyCar Series is not for sale,” Indianapolis Motor Speedway president and CEO Jeff Belskus said in a statement on Tuesday. "Representatives from Hulman & Company and the Indianapolis Motor Speedway Corporation have not received or considered any offers to purchase the series."

The statement follows a report published on Monday in the Sports Business Journal that said the board of Hulman & Company - the current owners of the IndyCar Series - were actively considering a definite proposal from an investor group headed by Tony George, former head of the Indy Racing League, a previous CEO of IMS and a current co-owner of Ed Carpenter Racing.

The group fronted by George is reported to consist of Chip Ganassi, Roger Penske, Michael Andretti and Kevin Kalkhoven (co-owner of KV Racing Technology). None of the owners were returning media calls on the matter after the story broke at the weekend. George himself has refused to confirm or deny the rumours of a takeover bid, merely saying that the "premise" was "inaccurate". He is believed to have tried an early buy-out attempt in 2010.

SBJ's sources suggest that the offer from the group would result in the group taking over the running of the series and assuming any outstanding debts, while Hulman & Company would retain its majority stake and management of the IMS venue. Any decision on whether to sell would come from the board's chairwoman, Mari Hulman George, who controls the majority of the voting interest. The board also includes her four children, including Tony George.

The series made a loss in 2012 after a series of setbacks in the last 12 months, including the last-minute cancellation of a lucrative round in China; a cooling of the financial support from title sponsor IZOD; the loss of the series' most bankable star Danica Patrick to NASCAR; the death of popular two-time Indy 500 champion Dan Wheldon at the end of 2011; and ongoing below-expectation spectator attendance at events.

Most crucially this has resulted in a double-digit drop in year-on-year audience viewing figures on television. The 2012 season finale at Fontana attracted only 250,000 viewers in the US, a 0.2-rating on the niche NBC Sports cable channel, despite being widely praised as one of the most tense and thrilling motor races of the year in any championship.

This has led to speculation in the media that the series cannot be saved and is no longer viable. Instead, it might have to consider scaling back operations and perhaps become a one-race championship by staging just the world-famous Indianapolis 500 in future - since it appears that many casual fans in the US already barely even register that other IndyCar races are available during the rest of the year.

Such a suggestion is not said to be part of the George-led buyout proposal. However, the SBJ story did state that motorsports marketer Zak Brown would be part of the investor group and would likely take over the management of the series if the bid were successful - which would mean the ousting of current series CEO Randy Bernard who was brought in to replace George in 2010 with a brief to build up the popularity of the championship.

Bernard's publicity-focused management of the series has resulted in a number of high-profile run-ins with some of the team owners over the least year, not least over the cost of buying spare parts for the new DW12 chassis from Dallara under the IndyCar-brokered centralised supply contract.

Other candidates suggested by SBJ as being in line to take over from Bernard were Andretti Autosport's executive vice president and chief operating officer John Lopes or Daytona International Speedway's president Joie Chitwood III, a former chief operating officer at IMS for seven years when George was the CEO there.

However, current IMS CEO Jeff Belskus refuted the suggestion that team owners had reached breaking point with Bernard's stewardship of the series. "Executive management from both Hulman & Company and IMSC maintain continuous and open dialogue with IndyCar team owners about numerous issues related to the IZOD IndyCar Series," he said.

"No IndyCar team owner formally or informally approached either organisation about purchasing the IZOD IndyCar Series," he insisted. "Both Hulman & Company and IMSC remain committed to working with the IZOD IndyCar Series and its partners as they prepare for the 2013 season and beyond."

According to the reports, the takeover bid was presented to the board on the same day that Bernard met with the board to sign off the 19-race 2013 season calendar, and Belskus was keen to talk up this aspect of series business rather than dwell on the potentially divisive takeover rumours.

"The racing in 2012 showcased great competition on track and added to the foundation for growing the series," he said. "The just-announced 2013 schedule includes several new twists that could make the racing even more exciting. The combination of the return of nearly all the 2012 venues, including all the ovals, the addition of new tracks and the revival of the Triple Crown award make this one of the most exciting schedules in recent memory."


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