Robin: Tony George fired from IMS board

Posted by Iannucci | 5/27/2009 | 19 comments »
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All is not bunnies and rainbows in the Hulman family these days.

The controversial, ground-breaking, tumultuous 20-year reign of Tony George at the Indianapolis Motor Speedway is over. SPEEDtv.com has learned George was voted out of power in a Tuesday night board meeting in Indianapolis.

A source close to the situation confirmed that the 49-year-old grandson of Tony Hulman would no longer be CEO of the Speedway after a vote of the IMS board of directors which includes mother Mari, sisters Josie, Nancy and Kathy, attorney Jack Snyder and George.

Calls to Snyder and Fred Nation, IMS vice president of communications, were not returned and George did not respond to an email.

(MORE from Robin Miller/SPEEDtv)
Before we go too far in speculation, please note Robin's disclaimer that this report hasn't been confirmed and that both TrackSide Online and IndyChannel have published that they have also failed to get this confirmed, so there is a chance this is all a very late April Fool's Joke.

Then again maybe it's true, so let's get on with the rampant speculation.

If this were news from a press release from the dead of winter the news wouldn't seem to be such a big deal. Tony George has been involved in governing the speedway, the IndyCar series, and his own IndyCar team, so relinquishing leadership of any one of those would allow him to focus on the others. But this isn't the dead of winter - it's three days after the Indianapolis 500. This isn't just a simple transition.

Now before anyone thinks this means Tony George is free to backpack around the world and hang at hostels please note he is still a very busy man, as his various duties were summarized recently in a response by Terry Angstadt, president of the IRL's commercial division, on Michael Knight's SpinDoctor500 blog.

On the perception (at least by me) that Tony George is disengaged from IRL decision-making after reunification: "That’s one (question) I haven’t had, so that’s always good. My best response is I think Tony, you’re right, for a couple of good, identifiable reasons, and I’m not trying to pat my management team on the back, but I know Tony has expressed his confidence in the direction we’re going. Like any good CEO, what he did was he gave us, the management team, the platform, the opportunity, with unification, where he had to be absolutely embroiled in that, the opportunity now to work with a (unified) property. I think he has a confidence level, and I check in with him on a very regular basis, to make sure we are setting the right course and executing as he wants us to, but, that doesn’t require him to look over our shoulder every day. And I mean that in a good way. I know he loves running Vision Racing, so he’s not only got CEO of the League, CEO of the Speedway, CEO of Clabber Girl Baking Powder and all the initiatives they have, a couple of bank Boards, I mean, this is a busy guy. I think he feels, 'I’ve got my check-ins and check-outs, but I don’t need to be doing that every day of my life.'"
But Robin's report gives the impression that this ousting - again, which is unconfirmed - is due less to Tony's other commitments and more to the fact that Mr George has spent more that $600M over the last 13 years in his endeavors relating to both IMS and the Indy Racing League. That number is probably unconfirmed as well, but it's still likely a large tab. It isn't entirely unbelievable that given the minimal Return On Investment from that gi-normous amount that other members of the Hulman family have seen.

One consideration that may have also factored into this is that Tony George has opened up the speedway to other forms of racing. Massive changes were made to upgrade the Pagoda and build a road course for a Formula One race, and as you may have noted there is exactly zero revenue coming from that stream currently. A Moto GP race is held on the road course now, but it's too early to determine if that will retain profitability in coming years.

Of course, the big addition was adding the Brickyard 400 stock car race, which for years was believed to have provided the revenue that allowed the Indy Racing League to continue to function. However, ticket sales from that race may be going the way of that final Formula One race at Indy after last year's "10 laps and everybody change tires" debacle. You can't expect fans to cough up good money in these hard times to see seven-minute segments of something masquerading as racing.

Which may explain the biggest rumor of all: Tony George's replacement may be former Lowe's Motor Speedway promoter "Humpy" Wheeler. I kid you not. The fact that he was seen at Indianapolis this weekend only furthers the chance that this longtime N-Word guy may now be in charge of the famed speedway. We'll see if that pans out, but for the moment his name is the only one being mentioned currently.

Meanwhile, it looks like Tony George is still in charge of the Indy Racing League and Vision Racing, able to reap all the (ahem) profits they can generate.

UPDATE: The IndyChannel article has been pulled, but Indianapolis Business Journal is confirming all of this.

A racing industry source told IBJ that Tony George's mother and sisters became fed up with the financial losses incurred by the Speedway and Indy Racing League.

George's dismissal comes less than one month after his wife, Laura, was removed from her job as staff adviser at the IMS.

IMS officials were not available to comment this morning, but sources said that the IMS board hopes to talk to H.A. "Humpy" Wheeler, one of the foremost promoters of NASCAR and former president of Lowe's Motor Speedway in North Carolina, about a possible management position.


CONFLICTING SECOND UPDATE: Tony George tells WISH-TV he's still CEO, but SI's Bruce Martin says the official announcement of his removal as CEO from the IMS Board is coming later today. Good grief.

An announcement by the Indianapolis Motor Speedway Corporation will be made Wednesday afternoon that says George's tenure is over after he was voted out of power in a board meeting Tuesday night. The IMS board of directors includes George's mother, Mari Hulman-George; sisters Josie, Nancy and Kathy Conforti, Indianapolis attorney Jack Snyder and George.

IMS officials have not issued any comment on the matter but a Speedway source said an official announcement will be made later Wednesday.

CURT CAVIN THIRD UPDATE:The intrepid Curt Cavin puts down his cellphone - which is probably burning hot right now - in time to get in his report.

According to the report -- which came from an online media company, and was picked up by two local news outlets -- a decision to dismiss (Tony) George came at Tuesday night's board of directors meeting. George, however, described the meeting as "typical," as did his mother, Mari Hulman George, who is chairman of the board.

Hulman George also said there was no call to oust her son, who has held leadership positions at IMS since 1990.

"There haven't been any changes," she said. "We just discussed things like we usually do and how to make things better."

(MORE from Curt Cavin/IndyStar)
OK, so either Tony George is unaware of his own position with IMS or Robin Miller and Bruce Martin just REALLY stepped in it.

TONY GEORGE FOURTH UPDATE:

19 comments

  1. pressdog // May 27, 2009 9:39 AM  

    Recall this story: http://tinyurl.com/chj6ej about George saying they expected the IRL to at least break even soon. Everyone said "HE WAS JOKING!" Ah, not sure in light of these developments.

  2. Anonymous // May 27, 2009 10:08 AM  

    There is a God....

  3. Restrictor Plated // May 27, 2009 10:23 AM  

    Well, Humpy Wheeler has me kind of scratching my head too. He's been a brilliant promoter over on "our" side of things, but I don't know how well that fits with Indy, unless they want to bring him on strictly to promote the Brickyard 400 side of things.

    This feels more like a big middle finger towards Bruton Smith than anything else.

    And on the tire situation, Goodyear still sucks, but in a series that has effectively banned all testing, uh, "our sanctioning body" (see, I'm being good, I'm dancing around it) has allowed Goodyear to drag two dozen guys to Indy to test new compounds and such this year. The only other tire tests they've done have featured usually just four drivers. So, Goodyear is at least pretending to be serious. Maybe it will make a difference at the Brickyard.

    In any event, I still think this one-tire make crap in each of our series has to stop. The multiple tire compound trick that Indy & F1 uses is intriguing, but I still think some good, old-fashioned competition would help make things better.

  4. Gurney Eagle // May 27, 2009 10:31 AM  

    This is a bogus report. Several Indianapolis media outlets are reporting that TG is still in charge.

  5. mmack // May 27, 2009 10:40 AM  

    If this story is true, given the Hulman-George family connections at the Speedway, a reasonable guess is the rest of the family got tired of watching their inheritance shrink over the years.

    Following up on Pressdog's link, the 2013 date could have been "given" to Tony George by the rest of the family, as in "The IRL stands by itself by 2013, or else!" Perhaps the board "relieved" Tony of his duties at IMS to focus on figuring out exactly how to acheive that goal. You know, reduce some of the outside distractions and all.

    We live in interesting times, my friends.

  6. mmack // May 27, 2009 11:00 AM  

    Jeff,

    Maybe Tony George gave the order to keep Helio! from climbing the fence, and that's why he got fired.

    Okay, you come up with a better rumor! :^P

  7. Iannucci // May 27, 2009 11:01 AM  

    Whether he was removed or not, pressdog and I are already privately speculating if Tony George is catching grief from the family for allowing bloggers into the media center.

  8. The EDJE // May 27, 2009 11:03 AM  

    The hatchet some wanted to bury now that we are in the sophomore year of unification, ended up in family hands ... and was used.

  9. The SpeedGeek // May 27, 2009 11:16 AM  

    I'm...feeling a little dizzy over here. Has anybody got any Dramamine? And maybe some Tums and Stoli to wash it down with?

    Whatever's going on, I'm blaming the whole thing on that Hobbson guy. No posts over there since before the 500? Mark my words, that guy is up to no good.

  10. SS Minnow // May 27, 2009 11:21 AM  

    As P-Dog would say....
    "Cue the circus music!"

    My question is this.... if both Tony and MHG said the meeting was "typical" I'd almost have to believe that at least maybe the conversations have come up before. He provided a "bail out" before the phrase "bail out" was even in vogue.

    Hey, maybe the "source" purposely gave the info to Robin to make him look like a fool AND generate a bit of buzz..... wishful thinking, I know.

  11. Mark // May 27, 2009 11:26 AM  

    I hate to spread rumors, but I hear that they are actually considering Kevin Kalkhoven and Gerald Forsythe as potential replacements...

  12. Demond Sanders // May 27, 2009 11:41 AM  

    I think the great debate is whether Tony's ouster would be good or bad for open wheel. Everyone's knee jerk reaction is "Good, of course."

    But let's remember that he has been bankrolling the sport for several years. I think ultimately it could be a very good thing for everyone, but in the short term the series would be in jeopardy...

  13. Jennifer of Dog.Yarn.Knit. // May 27, 2009 12:46 PM  

    Well, this is all just very uncomfortable.

  14. Scott // May 27, 2009 5:52 PM  

    The series is already in jeopardy. It hasn't turned a profit yet and most of the field depends on subsidies from an unprofitable league to even run. On top of that, the majority of the family does not want to sink any more money into it.

    When 2013 rolls around the family will be running Clabber Girl and the Speedway and that's all. Notice that this move puts Tony completely out of the picture when it comes to the speedway making a deal with any future third party that would govern a series running Indy in May?

    If you remember Tony bankrolling this series, you are remembering wrong. The entire family has bankrolling the series and has made legal moves in the past to protect certain parts of the Hulman trust from being raided to fund the series.

    The phrase "cut our losses" is quite popular in certain buildings around speedway these days.

  15. Dale Nixon // May 28, 2009 7:23 AM  

    Wow, Scott, could you possibly be more wrong?

    The broadcast revenue alone from ABC/ESPN and Versus is more than enough to run the IRL for the year. The TEAM program (i.e. revenue sharing; in order to SHARE revenue you must first HAVE revenue) is funded by track-paid sanctioning fees.

    This ain't the broadcast-time-buying CCWS or ALMS...

  16. redd carr // May 28, 2009 8:26 AM  

    seems to me the IRL is doing okay after quite a long rough period. they are getting some great drivers with interesting personalities, solidifying and growing their schedule and they have a ten-year television deal.

    I'll worry about their demise when they've done demised.

  17. Scott // May 28, 2009 9:25 AM  

    More wrong? You can have revenue without profit, did you know that?

    "Analysts estimate George has poured more than $250 million into the series in its 13 seasons. When asked in the New York forum if the league had turned a profit, George
    responded, “Not yet.” "

    ABC/ESPN's former contract was only good for $10M/year in the past... Their 5 races and the Versus deal is worth a fraction of that now. The actual amounts will be clear later.

    The series is hoping for a title sponsor to pony up about $10M next year.

    Nobody estimates that Honda, firestone, Izod, Apex, Orbitz, Hotwheels and National Guard series sponsorships combine to exceed $25M.

    That means that total reveneues are in the ballpark of $35M or so.
    Meanwhile annual expenses are estimated to be $50-70M!

    How on earth do you think that Revenues exceed Expenditures here?

    Hell, the TEAM program is an expense of $24M or so/year on it's own. Hell, even sselling 250,000 seats at $96 a pop only makes that break even... nevermind the fact that guys like Tim Frost estimate the net profit of the Indy 500 to be somewhere between 15 and 25 Million a year.

    If you are one of three sisters who's grandmother was the richest woman in the U.S. in 1985 (and one of Forbe's richest people that year) and you realize that the IRL is eating up all of your IMS profits, KRAFT is launching a price war against Clabber Girl,and your personal savings disappeared last October with everyone's 401K's, don't you think you'd be doing something about a blight on your family income?

  18. Anonymous // May 28, 2009 2:35 PM  

    "... a decision to dismiss (Tony) George came at Tuesday night's board of directors meeting."

    Tony said on TV the board meeting was Tuesday morning. And if there was a meeting that night, "he was not aware of it."

    The Star changed "Tuesday night" to "Tuesday" very shortly after it was posted on their website....

    Hmmmmmmmmm.........

  19. DZ // May 29, 2009 9:24 AM  

    Robin Miller is to journalism as Dr. Jack Miller is to Indycar driver.

    (sorry Jack, I know that's a bit harsh.)