What's it (the IRL) worth?

[SarahFan]

if a group (say, maybe of team owners) were to make an offer for the IRL to the BOD

a.) how much would the offer

b.) what amount would the BOD consider

hypothetically of coarse

[Gluaistean]

That's a good question. I doubt it's worth 20 million and that is being generous. I bet someone willing to absorb debt and hand over 5-7 million hard cash could have it.

Look at Andretti, Michael I mean. According to Robin Miller the Venom sponsorship on Marco's car is only there for show. I agree with him on that as I feel if these people saw value they, as in Red Bull, Monster and the myriad of others would be all over the series. For Go's sake Red Bull gets more from MLS sponsoring NY and also a team in Austria. Pretty sad. Sponsorship creates the excitement that drives the value like Ferrari,McLaren and Renault. Recall how the value of Jordan dropped once B&H dropped out. The series is judged by the people it draws, corporate wise. IMHO

By the way, and this is slightly off topic. AAMCO I believe it was sponsored Sarah Fisher for a year about three years ago. I happen to know a gentleman that has a couple of these stores and he claimed to me they got the deal for $250,000 for the year. I told him I found it hard to believe but he was adamant and he did not have to put his hand in his pocket directly. All corporate.

This sounds ludicrous to me. I remember that car and it was plastered with AAMCO. Surely this guy is wrong. Anyone recall who Sarah was driving for then.

Sorry Ken, for the diversion.

[NickFalzone]

well the reality is that none of us can come up with a number even close without a degree in accounting and a look at the irl's checkbook, but I'd guess around 50 million and change.

Glut, I think you're right about the sponsors, I mentioned this a couple months ago when I read a rumor that the Verizon on Will Power's car was not even a sponsor, just a favor Roger did Verizon because of their support of the Cup team. So yeah, big names on cars hardly means sponsor money. I have read that Monavie has put up quite a bit for Scheckter's final 9 races of the season, and that's why he's out there. I think for the big teams, single car sponsorship is less important than the smaller ones.

[Mark in Oshawa]

Buying this series means absorbing the debt. The cost is cheap for the series, it is the legacy costs that will drive up the price. That said, I think IMS in a quandary. It is THEIR series. Tony, for better or worse wanted control over IndyCar racing and IMS now holds it. For the first time in a long time they own the whole thing..and they don't have the first clue on how to capitalize on it. Tony Hulman must be rolling over in his grave at the mess this has become.

I don't know if the series is for sale, but I suspect if Roger Penske or a few of the owners did a very nice presentation on how IMS's role would be protected, I suspect the IMS board would be interested. The rub is where would you go with the series and how would you get your money back?

This is truly a case where OW IRL racing is on life support....and Mari Hulman George and the sisters could yank the plug....

[Lousada]

What would you be buying? For example, the tv-contract is said to be worth 10 million a year. But more then half of that is for the Indy500. Would that remain at IMS or go to the IRL? Will the 500 pay a sanction fee to the new IRL? Will the 500 be incorporated in the series or will it be a stand alone event like the Le Mans 24 hours is to the (A)LMS? How much is the debt and to who on what terms?

Maybe a better question would be: Can the ICS be profitable and high-profile, in the near future, without spending another 600 million???

[MDS]

In purest business sense a corporation that hasn't made a cent of profit in 12 years is effectively worthless. What anyone would be buying would be a long term potential upside.

I agree with Gluistean that assuming the debt and $5 million would probably be enough to buy out the board at this point, if they want out.

I have a couple of clients that buy and rehab damaged business, and if there were a buyer for the IRL you would probably need a war chest in the $50 to $75 million range depending on the series cash flow and debt position. If the debt is as large as I think it is you can probably need reach settlements with the debt holders or take the IRL into a bankruptcy.

What I would do is go into Chapter 7 bankruptcy the Monday after the season ends, discharge as much debt as possible, unburden yourself of any contracts that aren't working and come out the other side a leaner company. During this time you eliminate most of the staff and start over.

Once you get the nasty stuff done you find the restaff with the best available and invest on rebuilding your brand. This would burn through a ton of money, but honestly needs to be done, and the problem is with the schedule being what is you'd either need to go through the legal stuff at the beginning of the year so you could operate with a clean slate the follow year, or run out the year with what they have on hand and delay your rebuilding efforts by a year.

Structurally you'd need to beef up both the marketing and sponsor recruitment departments. The IRL has one person that does sponsor search full time; NASCAR has an office. You'd need to establish offices in New York, and possibly LA to that would focus on sponsor recruitment and media placement. Those folks don't come cheap, but I think the IRL and CCWS has proven you can't operate long term without that kind of investment.

Whomever would by the IRL would probably need to add something new, and I'm not sure what that would be. Purses would have to get larger, and maybe that means the sanctioning body partnering with tracks to build the purses, then maybe that's what you have to do. Getting big name drivers into the series would be useful, but again, getting that requires outside money, and you can't do that yourself.

Baiscally, it would be a big, expensive gamble. While it might only cost $5 million to buy the IRL any owner would have to be willing to spend $50 to $100 over a two to five year timespan with the strong likelyhood that they would never return any of that investment.

[Jag_Warrior]

MDS, you mean Chapter 11? Chapter 7 is just a straight liquidation.

[MDS]

Depends on the debt situation. The IRL has virtually no assets and a straight liquidation might be the best way to go if you're going to be the only serious bidder for whatever assets you want.

[call_me_andrew]

No one is going to accept straight liquidation without assets.

[Jag_Warrior]

Depends on the debt situation. The IRL has virtually no assets and a straight liquidation might be the best way to go if you're going to be the only serious bidder for whatever assets you want.

I guess my question would be whether the IRL's problems have as much to do with current debt as with lack of revenue (sponsorship)? If the IRL owes anyone any serious money, my guess is it would be IMS or the Hulman Trust. But anyway, I'm not really understanding what a bankruptcy would really do for the IRL. In fact, the negative publicity might do more harm than good with potential sponsors and partners. Sure didn't do much for CART-->CCWS.

[NickFalzone]

Jag, good point. As I've read it in the last few months, the problem is not that the IRL is in a heavy debt to anyone, it's that they've raided the Hulman trust fund big time to keep the IRL paying the bills. In other words, they've been paying the bills just fine, but the problem now is that the Hulman trust is going to be held much more closely, so the league COULD go into debt over the next season or two. But it does seem to be that Tony's been doing just fine paying the bills, in fact he's been quite good at that.

[MDS]

It all depends how the finances are structured. It's possible the IRL doesn't have much debt, its also possible that some or all of the $500 George spent to keep the league afloat came from some sort of loan package. Unless you're looking at the books we'll never know.

[PA Rick]

the CART IPO in the '90's was worth $75,000,000
In 2000 CART had $75 million revenue, and a net income of 7.5 Million. In 2000 the IRL was probably worth several million. So now after the "unification" the whole thing is worth a warm sixpack and a bucket of spit. So much for having a vision.

[indycool]

I doubt it's for sale and I doubt if anyone wants to buy it.

[SarahFan]

I doubt it's for sale and I doubt if anyone wants to buy it.



Well... You told many a time that tony was the man also...he's out...clearly the game has changed

[indycool]

Hr WAS the main man reporting to a Board of Directors like almost every corporate entity.

Buying IMS or selling it is going to be too expensive for anybody. That was what my statement meant.

[SarahFan]

Hr WAS the main man reporting to a Board of Directors like almost every corporate entity.

Buying IMS or selling it is going to be too expensive for anybody. That was what my statement meant.

Hr

?

[indycool]

Typo......

[FIAT1]

irl is worth nothing. Honda , Penske gone there would not be irl. Who wants it? France family to close a chapter they started in 1996.

[PA Rick]

irl is worth nothing. Honda , Penske gone there would not be irl. Who wants it? France family to close a chapter they started in 1996.


The IRL has some worth due to the contracts and organization and I assume bricks and mortar. I'm not sure of the debt which may be more or less than the plus side.

[SarahFan]

Typo......



Ok....

Ims for sale?.... I don't think so either

The IRL on the other hand..... Different story

Would agree or disaree?

And if it were what do you think it would be worth?

[indycool]

I don't think it's for sale right now. Sanctioning body assets are some office space and equipment, timing and scoring equipment, technical equipment and a couple transporters, plus contracts.....far, far less than a race track.

I have no idea what it would be worth right now. It would seem as if the Hulman Co. is keeping it.

[NickFalzone]

Bruce Martin talked to Josie Hulman at Kentucky and wrote it up on VS.com. She said that they fully stand by the direction the series is going and intend to continue their support of it. Not saying that she's being honest there, but that's at least their public stance. Belskus said the same thing a week or so ago.

http://www.versus.com/nw/article/view/81900/?tf=bruce_martin.tpl

[nigelred5]

I don't know if the series is for sale, but I suspect if Roger Penske or a few of the owners did a very nice presentation on how IMS's role would be protected, I suspect the IMS board would be interested. The rub is where would you go with the series and how would you get your money back?

....

Fool me once............
Been there, done that.............
A fool and his money........

I don't think buying the league would protect his racing operations. He could still run a one off program for indy and stick to racing in Grand Am and Nascar and keep everything open and running in Charlotte. Finally moving the Indycar operation out of Reading told me Roger knew where the money is long ago.
Roger's no fool.............. Never happen.