In an appropriate sense of timing, it felt just like a State of the Union address for IndyCar, including a president smoothly running through all the administration’s accomplishments.
But this was the president and CEO of Penske Entertainment rather than the commander in chief.
Sitting before a 3-foot backdrop of the NTT IndyCar Series logo, Mark Miles eloquently spoke for 25 minutes with hardly a pause or stumble. Before an audience of a dozen reporters via Zoom, the veteran pro sports executive (Miles helped organize Indianapolis’ Super Bowl bid after running ATP tennis for 15 years) made the case last week for why IndyCar is a motorsports property on the rise:
—A TV audience that has grown by 344,000 viewers per race (37 percent) since 2018.
—Race attendance was estimated to have increased by more than 20 percent last year, and the series’ media agency (Endeavor IMG) reports that people who identify as IndyCar fans has risen by 20 percent.
—Merchandise sales are up 89 percent since 2021, and 20 new brands have been added as corporate sponsorship increased 40 percent since the pandemic.
It was a rather rosy picture for a series that will open its 2024 season Sunday with a healthy 27 cars on the grid at the Firestone Grand Prix of St. Petersburg (where its top-level support series, Indy NXT, will have 22 cars, a 15-year high).
But it also clashes with the widely held perception that this has been the most turbulent IndyCar offseason in years.
In a span of less than two months:
—IndyCar delayed its long-awaited but oft-maligned hybrid engine for a third time and to an unspecified date after the Indy 500.
—Honda said its current contract (which ends in 2026) could be its last with IndyCar after a three-decade partnership, citing rising costs (and reportedly might have an interest in NASCAR).
—After an enormously successful three-year run through the streets of Nashville as one of IndyCar’s biggest new hits, the Music City Grand Prix was relocated to Nashville Superspeedway indefinitely. That move detonatees a ballyhooed plan to crown a champion on a splashy new course traversing the honky tonks of Lower Broadway.
It’s been a winter of public relations body blows for IndyCar.
Miles conceded the obvious when asked by a reporter for the perspective of IndyCar and its Penske Entertainment parent company on whether there had been an overabundance of bad news.
“I absolutely understand the question, and I don’t think we’re tone-deaf,” Miles said. “So we’ve had that sense from a number of different corners. I think it’s a long offseason. And I think when we get back on the track and start racing, that will make a difference. I think there are other things that we’ll be unveiling, and those things will make a difference.”
But despite having the world’s biggest race in the Indianapolis 500, IndyCar also is limited with its growth potential when compared to NASCAR (which announced a $1.1 billion annual media-rights deal last November) and Formula One (where many teams are valued into the billions).
“I think we frankly suffer, in some respects, at comparisons to the two other motorsports series that have billion-dollar annual media revenues.” Miles said. “And so while I’m serious and (IndyCar owner) Roger (Penske) will tell you he’s serious that we’re looking at ways where we can increase our growth more dramatically, we’re not going to make the same investments that might be made if we had a billion dollars a year in TV revenues. So we’re in it for the long haul.
“I understand the perception question. We think that will begin to be less of an issue as we get back on the track, and fans are reminded of our great racing.”
In the meantime, IndyCar is addressing the economics of its team business model by exploring a franchise concept that would award NASCAR-style “charters” to create permanent value for full-time teams. Miles estimates that 40 percent of IndyCar revenue already is funneled to teams, and that raw number is expected to improve with a new media-rights deal next year.
May 17, 2023; Speedway, Indiana, USA; Arrow McLaren SP driver Pato O’Ward (5) is mobbed by fans in the garage area during Indy500 practice at the Indianapolis Motor Speedway. Mandatory Credit: Marc Lebryk-USA TODAY Sports
Arrow McLaren star Pato O’Ward regularly draws large crowds of fans as IndyCar has touted attendance growth and fan identity (Marc Lebryk/USA TODAY Sports Images Network).
But with the aforementioned competition questions to address for cars, manufacturers and schedule, how does IndyCar prioritize which issues to solve first?
“I think it depends,” Miles said. “Because we have a lot of important stakeholders, and the answer to the highest priority probably varies from stakeholder to stakeholder. One common denominator, though, is to continue and even accelerate our growth. So that that’s probably important to the stakeholders across the board. Everybody wants that.
“But when you’re talking to the teams beyond that, cost is an issue. And we have worked really, really hard for the past several years to minimize cost increases for the teams with respect to the car and racing. And there’s a big increase this year as we bring on the hybrid. So we worked very hard on that to be in the place where the ecosystem could absorb the increased costs this year. When we think about the promoters, big stakeholders, they want more promotional support. They want the IndyCar brand to be better known. So I think the answer varies.”
Heading into the Firestone Grand Prix of St. Petersburg, here are six big-ticket items that IndyCar will need to address in the coming months:
CHARTERS
During the Feb. 29 news conference, Miles revealed that IndyCar had met with team owners a day earlier and presented a “high-level” proposal for implementing a charter system to establish concrete revenues and more tangible benefit to team owners.
Unlike the NASCAR charter (which locks in teams for the full season), the twist is that IndyCar teams would be guaranteed entry in every race but its biggest. The Indianapolis 500 is built on more than a century of qualifying exclusivity that occasionally has sidelined the series’ powerhouses from its crown jewel. Carving out the Brickyard from the guaranteed entry would make the charter proposal more tolerable for the series’ die-hard fans who demand adherence to competitive traditions.
Though the charter idea has been floated in team owner meetings before without consensus, IndyCar has an aggressive timeline of less than three months to finalize the new structure before the 108th Indy 500 (and likely basing incentives on last year’s results).
“We’ve been talking about it for a while, and (so) let’s figure it out and let’s really lock up with the teams to figure out what’s satisfactory and what would create value for them and the series,” Miles said. “So that’s the first imperative. … we just want to get it done. If it’s going to be based on the composition of the grid at the beginning of this year, then the sooner we get it locked in, the more sense that will make.”
SCHEDULE
A series once in danger of being unbalanced (with a heavy tilt toward road and street courses) now will have seven oval races, six road courses and four street circuits this season. Though the mix arrived somewhat through happenstance (e.g. the unplanned addition of Nashville Superspeedway), Miles said IndyCar wants to maintain the schedule’s proportionality.
Though the schedule likely will remain at 17 races (its length in six of the past eight years, with 2020-21 disrupted by the pandemic), there are some tweaks coming as soon as 2025:
—There will be a renewed push for adding temporary street circuits around the country, particularly in the Northeast and the West. With IndyCar building confidence in being able to promote its own successful races in Iowa, Detroit and elsewhere, Miles said it’s increased the ability to be “innovative in the future development of our calendar.”
—IndyCar wants to end its season before the NFL regular season begins, eliminating any potential conflicts such as in Nashville (which would have been dicey as a downtown season finale even before construction of a new Titans stadium eventually scuttled the plan).
—That could create a six-month offseason, but Miles said there could be international exhibition events to help bridge the gap (and dismissed prior concerns that a long period of inactivity could throw teams into a seasonal cycle of laying off staff).
NASHVILLE
Though Miles confirmed the finale will remain in Nashville after this season despite the venue switch, it remains unclear when the marquee street race can return downtown (race organizer Scott Borchetta has said no earlier than 2027).
“When we can race in the city, that’s where we’re going to be,” Miles said. “The objective is to get back into the city, but we have the oval available to us until that’s practical.”
Nashville Superspeedway is in Lebanon, a 40-minute drive east of downtown that will present a promotional challenge. What made the Music City Grand Prix such a hotbed for sponsors was its proximity to the heart of Nashville’s neon-lined avenues of fans and tourists. There are plans to have concerts at the track, but there’s no replicating the scene on Broadway.
Aug 7, 2022; Nashville, Tennessee, USA; IndyCar fans make their way through the fan zone during a weather delay before the Music City Grand Prix. Mandatory Credit: Christopher Hanewinckel-USA TODAY Sports
IndyCar fans walk through the Music City Grand Prix midway (Christopher Hanewinckel/USA TODAY Sports Images Network).
“There’s a lot of things that can be done to project IndyCar downtown,” said Miles, noting a pit-stop competition will remain there. “The hotel rooms that everybody’s going to use are in downtown. Some of the honky tonks will continue to be involved as hospitality venues.
“So, we’ll see, but it’s to the greatest extent possible that Scott’s plan is to have a foot in both locations. While we don’t want you to feel like you left it all when you get to the oval, we want you to feel the race when you’re downtown, too.”
CAR/HYBRID
After a recent round of productive testing, there’s been a resurgence of optimism about the hybrid engine. It’s on schedule to be introduced this summer (the July 7 race at Mid-Ohio Sports Car Course essentially marks the season’s midpoint).
Despite being more than two years behind schedule, the series will try to position the hybrid’s timing as perfect. The sagging momentum of electric cars has made hybrid technology a hotter option for automakers.
“The immersion of fully electric technology among the consumers has slowed down appreciably, and the bridge strategy is hybrids,” Miles said. “When we do get the hybrid on the track, it’s going to end up from a consumer perspective well timed, if later than we had in mind.”
Once the hybrid hits on track, IndyCar will need to stay ambitious on its rollout programs. The next goal is introducing a new powertrain and chassis concurrently in 2027 (the DW12 chassis is entering its 13th season).
HONDA
The potential success of the hybrid could be important in two ways: Assuaging the concerns expressed by a Honda official in a RACER interview and also providing a hedge by attracting new OEMs if the Japanese manufacturer were to exit. Additional manufacturers also would help defray supply costs that have been shouldered solely by Honda and Chevrolet for over a decade, and Miles said IndyCar plans to market heavily on how the hybrid is a relevant connection to the street models of the auto industry.
“Generally, I think that the hybrid technology is pivotally important to Honda,” Miles said. “That is something that we promised Honda we’ll deliver, and they’ve worked very hard along with Chevy and Ilmor to help us develop it.
Alex Palou (10) stands with his crew after receiving the NTT P1 Award during the NTT IndyCar Series qualifying at the Detroit Grand Prix in Detroit on Saturday, June 3, 2023.
Alex Palou won last year’s IndyCar championship in a Honda for Chip Ganassi Racing (David Rodriguez Munoz / USA TODAY Sports Images Network).
“I think the (IndyCar) relationship is in a good place (with Honda). They don’t have to make a decision yesterday or tomorrow about what happens after 2026. They are engaged in our conversations about what happens for 2027, and all of the things that are swirling around as possible directions or specifics, Honda seems to have a lot of time for, so I think we’re in a good place. We’re working closely together, and we’ll see how things roll out.”
MEDIA RIGHTS
NBC Sports Group is in the final year of its second three-year contract as IndyCar’s primary media rightsholder. Miles said the series has been on a “road show” visiting with several prospective media partners (the list includes NBC, other networks and at least one exclusive streaming network).
IndyCar expects to get an increase in a new eight-figure annual rights contract that could be announced before the Indy 500. But beyond those details, Miles has been tight-lipped about the next deal, which could be a combination of networks similar to NASCAR’s next contract (with Fox, NBC, Amazon, Warner Bros. Discovery and CW sharing Cup and Xfinity rights starting in 2025).
“Our priority is definitely still on (audience) reach,” Miles said. “We will continue to grow the sport as we have with NBC’s help over the last few years through getting our live racing in front of the largest possible audience. But that doesn’t mean that we don’t have expectations, and those expectations include growing our rights. Reach will continue to be our priority while I think we will still achieve some useful increase in our rights fees.”
