Roger Penske’s purchase of Indianapolis Motor Speedway, the IndyCar Series and IMS Productions was a big shock in the IndyCar world but more details are emerging that may help to explain what happened.
The current owners - the George Family - seems to have decided to divest itself its original assets following the death a year ago of family matriarch Mari Hulman George. They sold the family’s $80 million baking powder business, known as Clabber Girl, back in May and the word from US is that they commissioned the secretive investment bank Allen & Company to find buyers for their racing properties. The bank is reported to have approached Liberty Media and the related but independent Liberty Global, which is the biggest shareholder in Formula E. Both organisations are controlled by John Malone but operate independently of one another.
Sources suggest that Tony George was uneasy about selling to either entity because he feared that they would not respect the heritage of the sport and so he approached Roger Penske at the final round of the IndyCar Series at Laguna Seca in September.
Selling to Liberty Media made a great deal of sense for them because it offered the potential for the company to rapidly build up F1 in the United States by being able to extract existing races from the IndyCar schedule and switch them to F1, without having to go through the complex processes of setting up new races.
A deal could, for example, have given Liberty Media immediate access to the Indianapolis Grand Prix (on the infield road course used by F1 between 2000 and 2007. It could also have meant a deal with Long Beach to run F1 around the streets there, with other potential switches in places such as Detroit and Toronto. The key question, of course, is whether this was a cost-effective solution with the right destinations, or whether Liberty would prefer to build its own events. The danger for IndyCar would be that stripping out such events would weaken the series, which struggles to make money and so getting Roger Penske involved was a logical step as he has a great deal to lose if IndyCar is weakened.
Liberty Media is not saying anything about what happened but the sale can perhaps be seen as a defensive action from Penske, which he is now in the process of turning into an opportunity.
Both Hulman & Company and the Penske Corporation are privately-held and so there has been no public discussion about the sale price, although some reports in the US have suggested that Penske could have paid as much as $400 million.
Other stories suggest that Penske is not going to have risked such large sums and that there may be others involved with him in the purchase (including George himself). There have been suggestions that John Menard, the billionaire owner of a chain of home improvement stores, and a Penske sponsor in IndyCar, may also be involved in the deal.
The current owners - the George Family - seems to have decided to divest itself its original assets following the death a year ago of family matriarch Mari Hulman George. They sold the family’s $80 million baking powder business, known as Clabber Girl, back in May and the word from US is that they commissioned the secretive investment bank Allen & Company to find buyers for their racing properties. The bank is reported to have approached Liberty Media and the related but independent Liberty Global, which is the biggest shareholder in Formula E. Both organisations are controlled by John Malone but operate independently of one another.
Sources suggest that Tony George was uneasy about selling to either entity because he feared that they would not respect the heritage of the sport and so he approached Roger Penske at the final round of the IndyCar Series at Laguna Seca in September.
Selling to Liberty Media made a great deal of sense for them because it offered the potential for the company to rapidly build up F1 in the United States by being able to extract existing races from the IndyCar schedule and switch them to F1, without having to go through the complex processes of setting up new races.
A deal could, for example, have given Liberty Media immediate access to the Indianapolis Grand Prix (on the infield road course used by F1 between 2000 and 2007. It could also have meant a deal with Long Beach to run F1 around the streets there, with other potential switches in places such as Detroit and Toronto. The key question, of course, is whether this was a cost-effective solution with the right destinations, or whether Liberty would prefer to build its own events. The danger for IndyCar would be that stripping out such events would weaken the series, which struggles to make money and so getting Roger Penske involved was a logical step as he has a great deal to lose if IndyCar is weakened.
Liberty Media is not saying anything about what happened but the sale can perhaps be seen as a defensive action from Penske, which he is now in the process of turning into an opportunity.
Both Hulman & Company and the Penske Corporation are privately-held and so there has been no public discussion about the sale price, although some reports in the US have suggested that Penske could have paid as much as $400 million.
Other stories suggest that Penske is not going to have risked such large sums and that there may be others involved with him in the purchase (including George himself). There have been suggestions that John Menard, the billionaire owner of a chain of home improvement stores, and a Penske sponsor in IndyCar, may also be involved in the deal.
Source: Joe Saward's Business of Motorsport Newsletter
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