Mark Miles, CEO of Hulman & Co., the parent of INDYCAR and Indianapolis Motor Speedway, and INDYCAR president of competition and operations Derrick Walker participated in a Q&A during the Verizon IndyCar Series media day at Indianapolis Motor Speedway.
Below is much of the session that Miles started with an opening statement:
"As we sit here looking forward to the Verizon IndyCar Series of 2015, I want to just say a word about how we felt about 2014, then a few comments about 2015. Not a speech, but just some highlights. For '14, we thought it was a fantastic year, nothing short of a fantastic year. I see some of our friends from ABC, ESPN in the back of the room, so they remind me that a couple years ago when we started, people were very concerned about the television audience in this sport -- perhaps for good reason.
"While we're not where we want to be yet, there's a lot of room for growth, the facts are there was a 25 percent increase in both the average viewership and average rating for IndyCar over the course of the year. You can study other sports, other motorsports, and that is not something we take for granted. A 25 percent lift is a quality, meaningful increase for us. Took our average audience over a million people for the first time in a while. So that's important. The metrics on social media were actually a little higher.
"We signed a number of sponsors, principal among them obviously was Verizon. That wasn't so long ago. They made a terrific impact for the Verizon IndyCar Series, for all our stakeholders, our fans, and will continue to invest. I think they're a perfect fit. But there were others as well, including TAG Heuer. Angie's List is now the title of the Grand Prix of Indianapolis. In Indy, it was a great May for us. We took a total paid attendance, not including suites, from 285,000 tickets sold up by 75,000. So from 285,000, plus 75,000, to 360,000. That's a really meaningful difference here.
"I hope many of you would have seen we care about this place and this great race. From our point of view, what happens here is a great opportunity to present IndyCar racing to fans. The platform for the series, for our drivers, our cars, our teams, our sponsors, for the whole series, is really important. We're doing our best to leverage all the eyeballs that are focused on Indianapolis in May for the benefit of the Verizon IndyCar Series. There's a 55 percent increase in the total television audience in May. ABC made the decision to cover three consecutive weekends. They could put their best foot forward, promote from week-to-week to the '500,' and it paid off. All that accrues to the benefit of INDYCAR.
"I want to say a word to save somebody the trouble of asking our strategy about the schedule. It is misunderstood. We're not trying to shorten the season. We are actually planning to lengthen the season. What we're trying to do is slide the season earlier. We've shared with the drivers, with the team owners, with the promoters, the vision, the plan, which we'll get closer to in 2016, where we hope we begin the weekend after the Super Bowl, early February, and go through Labor Day for the championship. That gets us into eight months, a little over seven months of racing. Our objective is about 20 races.
"So, yes, we started by ending earlier. You haven't yet seen us start earlier. But I want you to understand that's where we're going. We want to race in a very full schedule, about 20 races, from the weekend after the Super Bowl in early February through Labor Day. That will feel very different than it did last year and this year. You will see the expansion. Related to that, there's the question of international races. We said we think there's an important market opportunity for us on a limited basis at the very beginning of the championship. The strategy about when we schedule ourselves beginning of February through Labor Day is not dependent upon international races.
"We could fill that early part of the series, February, with additional North American races. But, one, there aren't too many places where we can race climate-wise. Two, we're determined to find really vibrant new race opportunities. So we're going to be discerning about that. We still continue to believe that we're not going to become Formula One. We're not going to be chasing ourselves around the globe week after week after. That is not the strategy. But we can imagine a limited number of international races at the beginning of the calendar in February, then get to the States, North America, stay in North America.
"I would emphasize this is not about shortening the season, and we're not shunning North American opportunities for international ones. This is about lengthening the season, racing a full seven-month schedule, and perhaps having international races on a limited basis at the beginning of that schedule. There are important international capitals that value IndyCar racing, that provide a great value proposition for INDYCAR, not only economically, but also in terms of beginning to expose us to race fans around the world in a way we're not fully exposed to today that I think over time can pay benefits to our series, our teams, our sponsors.
"Just a few thoughts about what's happening going forward in terms of this year. More of the same in terms of what you've seen on the schedule. We're excited about getting to New Orleans, a new venue for us, which has hosted a number of our teams with their tests. We're ready to go racing."
Q. Mark, on social media you always read fans bringing up the same things. They want to go to this track, that track. Here is your opportunity to explain why Road America isn't on the schedule because we don't want to pay the sanctioning fees, proximity to Milwaukee, et cetera. Detail a lot of the reasons why a lot of these tracks that people advocate are not on the schedule.
MARK MILES. Maybe generically, generally the scheduling considerations, maybe a little bit of the specifics on Road America. First of all, we've got 16 races. What are the opportunities for growth if we want to get to 20, if that's the goal over a couple years? First of all, we are actively engaged in looking for the best place we can be to finish the championship on the Labor Day weekend. For us, the best place we can be ideally would be a major urban market in a time zone that helps us deliver the biggest possible television audience, in a place where we believe we can have a vibrant, successful race.
"If you run a count with me. There's 17, when we find that. That's probably not the right fit for Road America. I believe there are some February opportunities. I've talked about that already. We think our growth is to add two or three races in February, the beginning of March. I came from snowmobiling last weekend in northern Wisconsin. I'm not sure we want to race at Road America in February. So, basically from a calendar perspective, we add those races at the beginning of the championship, you're at 20. So the ability to add additional, to us, currently new tracks, really depends on replacing existing races. We want to be very, very careful about that.
"That's not to say it won't happen, but we've got a lot of great partners, the promoters of our races, a lot of them have a lot of history with us. We won't be cavalier about changing out existing promoters to chase the next opportunity. There are other considerations we've talked about in the past. In a perfect world where you were starting from a blank sheet of paper, we'd have better geographic distribution. We've got a lot of midwestern races today. That's not absolute. That doesn't mean we might not add one, but it's a consideration. It's not just the distribution of races by region of the country, but also in smaller regions. We don't want races to cannibalize each other.
"We're going to add one to finish the championship Labor Day. We don't have a race and a promoter today for whom Labor Day is ideal, but we know there are cities out there for whom that will be the case. We've got the opportunity to start earlier. You do those things, you're at about 20 races. I think the consensus with Derrick and the paddock is 20 races, a full season for us."
Q. You mentioned the TV number increases which were sizable. What goes into reaching your next benchmark? Is there a certain demographic you think you need to go after or another series or sport you have to compete against to increase that share?
MARK MILES: We're delighted with the progress made last year but not satisfied with the television audience. So what's next? Our agreements with our two broadcast partners are in place for a number of additional years. But we're having conversations with them about things that might happen within the existing agreements in the near term, as early as 2016, which I think could make meaningful additional increases in the audience.
"So more continuity like I think we achieved with ABC in May would be a good thing. It isn't helpful to a national following of fans to be on one broadcaster one week, two weeks later, another. It's very hard for our television partners to promote the next race if the next race isn't theirs. So working toward additional continuity would be important. I think we can make some improvements in that regard. Harder, but something that is worth discussing from our perspective is whether or not it's possible to change the current exclusivities, where ABC has broadcast exclusivity, and NBC Sports Network was cable exclusivity. If each could have both, you could imagine ESPN, for example, possibly being a player for us, and you can imagine NBC as opposed to just NBC Sports Network taking some races.
"That is harder. That is not consistent with our current agreements. There are ideas like that that at some level are being discussed for a next set of improvements."
Q. Two weeks ago there were two words on the minds of every IndyCar fan I talked to. Brian Barnhart. Shall I just leave it at that and open up the conversation?
DERRICK WALKER: There was a fair amount of fan interest in that decision. In reality it was a very simple decision to make. Having been in Race Control for about the last year and a half or so, I've had a chance to stand there as an observer and be part of the process. When I looked at the team that we have there, I would see there's a strong group there. Brian was part of that whole group that ran since 2013 onwards to this day.
"When Beaux Barfield, who decided to go to the Tudor Series, he was part of that process as well. What I think is probably missed sometimes is people don't maybe always understand, maybe we need to explain it more, is the system we've adopted at the end of 2013 where we have a race director who basically is your team manager, crew chief of your team of people in race control, and you have a group of three guys that are stewards. They're looking at the incidents that happen on track. Their job is to know the rules and deliberate on whether they think that's an incident or not.
"When people refer to Brian in the past tense of what he did, I think there's a complete misunderstanding of how the system was back then and what it is now. When you look at what Brian does really well, race director is probably one of the best things he does. So it wasn't a decision I had to think twice about. We made that decision way back when Beaux left. We wanted to get the drivers, promoters together and announce it in a proper way, our clients, supporters and our teams. So that's what we did.
"I don't think anything that I've read or heard has changed my view on that. I think he's going to do just fine."
Q. I think you said earlier with the new aero kits, you're going to be developing the rules for them. I'm not sure what rules exist right now. I know there's a box, they design a certain part, it's been frozen, put them on the cars, test them soon. Once the teams get them, the engineers start tweaking whatever they can tweak. If the rules aren't in place now, a team can go down a certain path of engineering and spend their resources, then have the rug pulled out from under them because the rules suddenly say, No, you can't do that. Maybe you could elaborate on what kind of rules you think might be coming into play so it's sort of fair. The whole point of being a team is you find that little extra something that no one else has.
DERRICK WALKER: The manufacturers, I want to acknowledge their role in all of this. Our two manufacturers in Chevrolet and Honda have really embraced this aero kit concept. They've worked as hard as they can in the aero kit area as they do with their engines. There's a strong competition going on.
"Certainly Dallara has been a part of that process as well. Let me get the thanks out of the way. But they really have helped us a lot. When you talk about the rules, what I mean is there's different dimensions. The wings and the body parts are a little bit different dimensions so there's rules that capture what those differences are. It's not fundamentally a lot of new rules that are different; it's just we have different shapes. You're going to see the team is going to have a lot more parts to play with, variables, more options to adjust their car.
"Of course, the car is going to look a little different than it did last year, quite a lot in some cases. The performance is going to go with it. You can expect to see an increase in performance. I think it's going to add a lot more interest. It's part of where we're moving with the future of IndyCar, and that is to come out of a very strict standard rule that limits some of the creative sides that the teams want to express and I think the fans want to see, as well."
Q. About the aero kits, there's not a lot of practice time here at the Speedway where it gets tested. How do you juggle the safety of the program and the engineering of all of that at the same time still trying to improve the entertainment value of doing this? In the same process, as you get through the rest of the season, is there an adjustment that you can make if Chevrolet has trumped Honda in terms of aero performance?
DERRICK WALKER: When you look at the last part of your question first, we have three areas on the car that have been designated as upgrades. They are predominantly there for 2016. But if a manufacturer finds in 2015 that they come out of the gate and they're obviously behind, then these manufacturers can come, any one of them, to IndyCar and say, 'Look, here is where we think we are out to lunch, here is what we want to do.' We want to exercise one of those areas of the car we can change.
"We'll take a look at it. If it's a legitimate claim, they will get the opportunity to bring out a modification, put them back in the game. I think I would caution everybody, we've got a lot of different types of racetracks happening. You'll see a lot of different searching this year for finding out how it's really going to work, what is the best option. I wouldn't jump to an immediate conclusion after the first couple races who is ahead and who is behind. Remember, there's two kits, a road course and an oval. They are quite different animals. It's going to be interesting to see how they do that. But we have a mechanism to allow updates."