Indianapolis Motor Speedway Media Conference
Topics: Indianapolis Motor Speedway
Joie Chitwood III
October 2, 2007
THE MODERATOR: Good morning, everyone. I want to welcome everybody assembled here in the room and we are also on a teleconference and live via indycar.com. We want to welcome you all.
Our announcement here today is a very significant one. We have representatives, of course, from the Indy Racing League and from the Indianapolis Motor Speedway present. We will hear from each of our three guests and then open it up for questions. After that you may do one-on-ones with the three guests.
Introducing first on my immediate left is the president and COO of the Indianapolis Motor Speedway, Joie Chitwood. Next to him is the president of the Indy Racing League for competition and operations, Brian Barnhart. And on my far left is the president of the IRL for commercial division, Terry Angstadt.
We will begin with some comments from Brian.
BRIAN BARNHART: Thanks. Good morning, everyone. Looking to the 2008 IndyCar Series and beyond, we're excited to introduce IndyCar TEAM, which stands for Team Enhancement and Allocation Matrix, a new distribution of the basic IndyCar awards. This program is designed to enhance participation in the IndyCar Series by allocating funds to each full-time team.
IndyCar TEAM is an extension of the series Leaders Circle program which has been in place since 2002. The Leaders Circle goal has been to control costs and provide an opportunity for entrants to be competitive. The program leverages relationships built by the league with its partners, sponsors and suppliers to provide benefits directly to the entrants.
An example of this has been the benefits teams receive from Firestone with preferred pricing on tires as members of the Leaders Circle. And now with TEAM, we're enhancing participation in the IndyCar Series while also making entry into the IndyCar Series more attractive to potential new teams.
Beginning in 2008, we will award a minimum of $1.2 million to each car competing in the entire IndyCar Series season, including the 92nd running of the Indianapolis 500. The breakdown of this money is $900,000 for participation in the 15 events outside of Indianapolis, and $300,000 for participation in the Indianapolis 500.
In addition to the $1.2 million guaranteed for participation, teams will also compete for bonuses at each of the events, including the Indianapolis 500. The bonuses will be paid to the top five finishers at each event with a special emphasis on the Indianapolis 500. The bonus money for the top five finishers will include an additional $35,000 for winning races outside of Indy, and Joie will have more information with regards to the Indianapolis 500.
The IndyCar Series champion will continue to win a million dollars bonus as seasons past with bonuses also being paid for second through fifth in end-of-season payouts. It's important to remember that these awards are basic awards. All contingency amounts that have been in place in the past will continue to be available at each IndyCar Series event. These include the $10,000 Amoco Transmission Pole Award and the $10,000 Firestone Performance Award as well as other awards.
The IndyCar TEAM is designed to increase value of the racing in the IndyCar Series for all of our competitors. It's important to note that this program will increase as the series grows and we're successful in attracting new sponsors and enhancing league revenue. We feel this is an important step in strengthening our current teams while positioning us as the premiere motorsports destination for potential teams looking to move to the next level.
THE MODERATOR: With more on how this is going to impact the Indianapolis 500, here is Joie.
JOIE CHITWOOD: Thank you, Brian. Great announcements. In conjunction with that, as we talk about the Indianapolis 500 and the Indianapolis Motor Speedway, we're approaching some very unique milestones in our history. 2009 will be the centennial, the hundredth anniversary of the property itself, 2011 represents the hundredth anniversary of the Indy 500. It's only appropriate we also strengthen the incentive to compete and participate and win the greatest spectacle in racing.
We're pleased to announce that the purse for the 92nd Indy 500 will increase to at least $13.4 million, that represents a 25% increase from the record purse of $10.67 million from 2007. By using the words 'at least,' I also do not count the contingency money which could potentially be awarded.
The new purse structure will help entrants earn more money than ever during the month of May. Another significant increase to our prize structure is the winner of the 92nd Indy 500 in '08 could potentially win at least $2.5 million. That's a 42% increase from a record prize winning check that Buddy Rice received in 2004 of $1.76 million. Again, potentially it could be larger with the addition of contingency money. As well there are some other prizes that will be awarded for runner-up position and third place. The runner-up for the Indy 500 will $1.25 million and third place will receive $750,000.
So in conjunction with Brian's announcement, it's nice to add and complement this program with the extra incentive participating in the greatest spectacle in racing.
THE MODERATOR: Earlier this year, Terry Angstadt moved from the Speedway's marking department to his new position as president on the IRL's commercial division. Terry.
TERRY ANGSTADT: It doesn't feel new any more. But thank you for that.
IndyCar TEAM is in line with one element of our Corporate Mission Statement, and that is the IndyCar Series will seek to develop and optimize the competitive and business opportunities for suppliers, sponsors, teams, drivers and venues. Our new earning structure is an extension of this statement as it provides tremendous stability and predictability for our existing teams with respect to their operating budget and business models.
For example, Andretti Green Racing, which fielded four cars full-time, and an additional Indy 500 during the '07 season, would have seen earnings increase 26.3% under the IndyCar TEAM structure. Dreyer & Reinbold Racing, which fielded two cars for the entire season, and an additional entry for the Indy 500, would have seen an earnings increase of 24.3% under the IndyCar TEAM. So you can see these are significant increases for two very valuable teams for our business.
IndyCar TEAM is designed to make our teams healthier while the new purse structure for the Indy 500 will help all entries earn more money than ever during the month of May. It's important to note that under the IndyCar TEAM, all full-time IndyCar Series entries attempting to qualify for the race are guaranteed to make a minimum of $300,000 at the Indianapolis 500, even if they are bumped from the field.
Additionally, IndyCar TEAM will position us favorably to attract new teams to the IndyCar Series by providing a stable structure to help plan for the future. This restructuring of the IndyCar Series earnings distribution and increase in the 500 purse is made possible through a resurgence with the Indianapolis 500, especially in terms of sponsorship and ticket sales, as well as the activity on the league side, including the fulfillment of two new official sponsorship categories which will be announced in the coming weeks. There are press conferences scheduled in Las Vegas for October 31st and then a national introduction of another category that will roll out January 1. We're very excited to in the future be welcoming those two new important categories and sponsors on board.
THE MODERATOR: Thank you, gentlemen. We do now open the floor up for questions.
Q. Terry, you said, if I understood you, that every full-time member of the league that comes to Indianapolis, whether they make the field or not, will be guaranteed a minimum of $300,000.
TERRY ANGSTADT: That's correct.
Q. What is your expectation in terms of bringing in new teams and entries thanks to the introduction of the TEAM Program?
BRIAN BARNHART: I don't know that we have expectations set as much as we're just trying to provide a stable platform for existing teams as well as an opportunity for potential ones. It would be difficult to speculate or look into a crystal ball and see what kind of an effect it has. Clearly, as you can see and hear from the numbers, it's something that moves us in the right direction in terms of a business model and a stable platform for teams to take a look at.
Q. Joie, what is going to be the minimum payoff for an Indy-only team?
JOIE CHITWOOD: For a team that's not participating in the IndyCar TEAM program, their prize money will be $270,000. That's a normal prize situation. Again, that does not count any contingency that the team might be eligible for by participating during the month of May.
Q. What if an existing IndyCar team such as Panther Racing would enter a third car for the 500, they qualify for the 300 or the 270?
JOIE CHITWOOD: Each car participating in season-long program will be eligible for the $300,000 minimum. A one-off situation, regardless of being a team that's participating in the season, will only be eligible for the $270,000.
Q. Joie, for the contingency, could the winner reach $3 million? Is there enough contingency money possibly available?
JOIE CHITWOOD: That's actually tough to answer right now as contingency changes each year. But when you look back to the record prize money we issued to Buddy Rice, I don't think people realized that he from a couple years ago still has the record for 1.76. He had a phenomenal month of May. He acquired the Pit Stop Challenge, winning the Pole Award. So he actually had a heck of a month where he earned all of those.
So it's possible. Right now I don't know what the case will be and how much contingency will be generated for next May, but that is a possibility.
Q. Brian, supposing with the structure you have set up and a payment to a team that's full-time, you had five teams come in, the fund is available for new teams to get this kind of money for the season?
BRIAN BARNHART: This is an extension of our Leaders Circle program. Historically our Leaders Circle program has been restricted to 24 participants. And I think we will probably at least stick with that to begin with. If we need to adjust, show some flexibility, that would be a good situation to find ourselves in, if we find we have more than 24 cars interested in participating on a full-time basis, I think we would take a look at doing what we need to do. But right now we're anticipating it just being for the 24 Leaders Circle teams.
Q. Whoever can answer this question, you have a lot of the names of the very recognizable teams. I kind of wanted to just go back to maybe the smaller teams. Can you maybe detail how you think sponsors might be lured to the smaller teams? The bigger teams might have more incentive from the big sponsors. Can you talk a little bit about a smaller team like Hemelgarn that might be able to lure in additional sponsors? The second question I had was, can you give me some specifics on why there is a resurgence in the interest of the IndyCar Series?
TERRY ANGSTADT: I'll take a pass at the interest in a team, no matter the size or kind of power of it to date. And I think that when we are out looking and talking to new potential sponsors, it really is interesting that, one, it certainly is their decision. But, two, the ownership group, the drivers they have on board, other sponsors that might be complementary or not really does impact that.
But we have seen a tremendous level of activity not only for new sponsors looking at teams no matter the size, but it really does come down to kind of that personality fit with owners and drivers and complementary sponsors.
So we think that there is something for most any interested sponsor that they can find a good home in the IndyCar Series.
JOIE CHITWOOD: I'll answer the second part.
I think we've seen for the last five years at the Indianapolis Motor Speedway some of the best racing for the Indy 500 we've ever had. You can look back to the finish in which Sam Hornish passed Marco Andretti, Danica Patrick leading late being passed by Dan Wheldon, of course Dario Franchitti putting it in Victory Lane this year. Those races, complemented with a strong sponsor base and sponsors activating the platform we have here, you can look at the entire month of May from practice to qualifying to Miller Lite Carb Day, and you can see the fans that are showing up and having interest in that.
So I think when you tie in the content on the track, which is competitive close racing, finishes like we've never had here before, sponsors maintaining their relationship, expanding, activating, then seeing fans show up here and participating, I think all three of those things together actually go hand-in-hand with the IndyCar Series, and that excitement is on both sides of the street.
Q. (No microphone.)
JOIE CHITWOOD: I think we've been very pleased with our ABC, ESPN relationship, and trying to expand that. But at the end of the day, I think it all starts with the racing. It's that close, competitive racing, the phenomenal talent that's in the IndyCar Series, whether it's Marlboro Team Penske, Andretti Green, Target Chip Ganassi, I see some others out there, Dreyer & Reinbold, there's a good show out there, and fans and sponsors are very interested in that.
Q. To clarify a point, the race bonuses, that has nothing to do with purse money, correct?
BRIAN BARNHART: That is correct. In addition to the $900,000 divided amongst the 15 races outside of Indianapolis, at those 15 races, the top five finishers will receive the bonuses on the board, an additional $35,000 for winning the race, $25,000 for second place down. So the top five finishers get those bonuses.
There are the significant bonuses at the top five finishers for the Indianapolis 500. And, as we mentioned, we'll also be consistent and pay season-end money to the top five finishers in the points money as well.
Q. Brian, with the possibility of winning close to $3 million in the 500 and 17 races, you add another million dollar bonus plus whatever, is this going to make you competitive for the drivers that have been slipping away to NASCAR? 17 compared to 35.
BRIAN BARNHART: It certainly improves it. We're going to run 16 races in 2008 on the schedule. It helps everybody. And that's the most important aspect of this program, is that it helps the one-offs at Indianapolis, whether it's the PDM or Greg Beck or people that have run just a handful of races.
The $270,000 that's available if they make the race in the Indy 500 is a significant increase as well. These numbers are there for a reason. I mean, that number includes and should be enough money to pay for your full season engine lease or full month engine lease as well as your tires for the entire month of May for one-off cars.
The full season program at a million two is the same deal. That pays for your full season engine lease and your tires for the year. It's our way of providing stability for the teams and improving the business model, hoping to attract new ones. It should benefit everyone, whether it's teams that are well-funded and have all the sponsors, all the way down through each and every team involved in the series.
And it's the responsibility of those owners, as it always has been, to make sure they have relationships with their drivers and their crew members. And it certainly gives them more flexibility. With the increase of the monies you see, the increase in percentages, it gives them an opportunity to continue to hire the best people and hopefully retain the best people, including drivers.
Q. Brian, you're saying purses are eliminated. Will we get a box score with a financial amount after every race? Seems like it breaks down to about $60,000 per race plus the bonus.
BRIAN BARNHART: It's a little more than that. 900,000 divided by 15 is 60,000 per starter. If you just multiply 60,000 by the number of starters, you get a pretty good idea what your purse is for that event, and add up the bonus monies for 35,000 for first through 10,000 for fifth, is another 105,000. So at 60,000 per starter, plus another 105,000 for bonus money, times the number of starters, you got an idea what your individual purse races are. And of course as Joie said, with the contingency money at the Speedway, it will be at least 13.4 million.
I don't know that we'll put that number on there. I think you guys are probably smart enough to figure that out on your own as well.
Q. How does this compare with the Daytona 500 purse?
BRIAN BARNHART: I have no idea, to be honest with you.
Q. With the public's numbers.
JOIE CHITWOOD: As we develop or business plans, we appreciate what other motorsport sanctioning bodies do. We feel very good that the purse we offer for the Indy 500, including the winning prize check for next year, is significant and appropriate for an event the stature of the Indy 500 commands.
THE MODERATOR: News releases are available from John and also included in that will be copies of the charts that you see scattered about the room here today. Thank you for attending. Thank you, gentlemen.
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