INDIANAPOLIS -- What is Tony George up to?
That's the question everyone with even a casual interest in Indy car racing is asking as the latest turn of events in the Hulman family soap opera unfolds at the intersection of 16th and Georgetown on Indianapolis' west side.
In recent weeks, George -- the former CEO of Hulman & Co. and its main moneymaker, the Indianapolis Motor Speedway -- has been linked to an effort to buy INDYCAR from the Hulmans. Of course, George founded INDYCAR (or the Indy Racing League, as it was originally called) in 1994, laying the groundwork for a battle for control of the sport that lasted from 1996 to 2007 and pretty much decimated Indy car racing's fan and sponsor base.
On Friday, George resigned from the Hulman & Co. board with immediate effect, confirming speculation that he really is trying to buy the series he created despite strenuous and repeated affirmations from current Hulman CEO Jeff Belskus that INDYCAR is not for sale.
In a joint statement released by Hulman & Co., George and Belskus both cited the appearance of a conflict of interest between George's board membership and his desire to regain control of INDYCAR as the reason he is walking away.
"I realize that my recent efforts to explore the possibility of acquiring INDYCAR represent the appearance of a conflict, and it is in everyone's best interest that I resign from the Hulman & Company board," George said. "It goes without saying that I want to do what is best for this organization."
"Tony has made the difficult decision to resign from the board because of his involvement with a group that has recently expressed an interest in purchasing the Hulman & Company-owned INDYCAR organization," said Belskus, who replaced George as Hulman CEO after George was removed from the position in June 2009.
"While the business is not for sale and no offers to sell it have been considered or are being considered, we applaud Tony's efforts to resolve the appearance of a conflict and appreciate the gravity of this decision."
George wasn't even 30 years old in 1989 when he was handed the keys to the Indianapolis Motor Speedway, the crown jewel of the Hulman family holdings since 1946, when George's grandfather Tony Hulman bought the famous track.
George invested heavily in diversifying the speedway's position in the motorsport world, inviting NASCAR to race on the IMS oval beginning in 1994 and building an infield road course that hosted Formula One's United Stated Grand Prix from 2000 to '07.
But he is most notorious for forming the IRL, which used the Indianapolis 500 as a bargaining tool when it went into competition with the PPG CART IndyCar World Series in 1996.
The IRL failed to gain traction in its early years, and by the time most of the more familiar drivers and teams switched camps from CART to IRL between 2002 and 2004, the damage had been done and Indy car racing's audience and economic foundation had shrunk dramatically.
Unification finally occurred in early 2008, when the IRL absorbed the skeletal remains of CART, which by then was operating under the name Champ Car World Series after emerging from bankruptcy proceedings in 2004. But the merger came at the worst possible time in terms of the recession, and the renamed IndyCar Series did not enjoy the immediate resurgence many were expecting despite the addition of apparel manufacturer Izod as a title sponsor.
The Indy car community was shocked on June 30, 2009, when George was removed from his dual roles as president and CEO of the speedway and of Hulman & Co., the multifaceted business started in 1850 by Tony's great-great grandfather Herman Hulman. More surprising was that George elected at the same time to stand down as the leader of the Indy Racing League.
That sparked a search for a new leader, and former Pro Bull Riders CEO Randy Bernard was hired in March 2010. George operated his Vision Racing team until the end of 2010 and helped his stepson Ed Carpenter establish a new team this year. Meanwhile, he was restored to the Hulman & Co. board in January 2011 when the board was expanded from five to 11 members.
I realize that my recent efforts to explore the possibility of acquiring INDYCAR represent the appearance of a conflict, and it is in everyone's best interest that I resign from the Hulman & Company board.
”-- Tony George
Now it's down to 10 because Belskus said George will not be replaced immediately.
"Tony has been involved with our businesses for many years and has contributed significantly through his leadership role with IMS and INDYCAR and as a member of this board," Belskus said. "We wish Tony much success in the future."
Since Sports Business Daily broke the story that George and a few other Indy car team owners were exploring a takeover of the series, many have wondered why George would try to regain control after he walked away from his leadership role three years ago. It seems especially ironic that his group reportedly is driven by several IndyCar Series team owners because one of the reasons George created the IRL was specifically to remove power from the team owners who made up CART.
Sources with knowledge of George's plan say he is not interested in actually running INDYCAR. It's unclear whether he would want to retain Bernard, who has two years remaining on a five-year contract.
The series has shown slow but steady growth during Bernard's tenure, but significant problems remain. Financially, INDYCAR was likely to break even or turn a small profit this year until the 11th-hour cancellation of a race in China resulted in the nonreceipt of an expected $4 million sanctioning fee.
INDYCAR also is suffering from disappointing television ratings, creating a drop in value for prospective sponsors. Top stars such as Dario Franchitti, Scott Dixon, Helio Castroneves, Will Power and newly crowned champion Ryan Hunter-Reay get nowhere close to the amount of mainstream recognition that even NASCAR midfielders get, and a lack of the technical diversity that was once a hallmark of Indy car racing has driven away serious gearheads.
George's resignation from the Hulman & Co. board would seem to indicate that he really is serious about gaining control of INDYCAR. It's possible he and his investors will put together an offer that includes a plan -- and more importantly, a leader -- the Hulman board can't refuse.
But many observers are hoping the board does its due diligence and considers the consequences of allowing Tony George to be put back in charge of Indy car racing, whether he is the figurehead and front man or not.
As the early years of the IRL showed, the strength of the Indianapolis 500 is determined by the strength of Indy car racing as a whole. In those days, IMS and Hulman could afford to see the 500 suffer a bit because the Brickyard 400 was the toughest ticket in town and the F1 race did pretty well. But the past five years, NASCAR barely fills half of the track's 250,000-plus seats and the FIM Moto GP event that replaced F1 comes nowhere close in terms of prestige or attendance.
Since news of George's alleged desire to take over the IndyCar Series surfaced, fan reaction on social media platforms is trending strongly against his having renewed involvement in running the sport.
There's simply too much baggage. Because no matter how much truth the statement actually carries, George is still viewed by most as the guy who bungled Indy car racing in the '90s. The sport, his opponents say, can't afford to let him potentially do it again. And neither can the Hulman & Co. board.