Friday, February 22, 2013

Confirmed: Indianapolis Motor Speedway Is On The Auction Block

I told you earlier this week that sources indicated that a sale of the Indianapolis Motor Speedway by the Hulman-George family has been in the works for some time. Mari Hulman-George, heir of the late Tony Hulman, along with her three daughters, all of whom sit on Hulman & Company's board of directors, decided it's time to unload the race track her late father brought to international fame. According to a well-placed source, Tony George, grandson of Hulman, is part of an outside group of investors in negotiations to buy the IMS.

Mari and her daughters decided to oust Tony George from his role as IMS CEO in 2009 following the Formula One debacle that reportedly cost the IMS more than $150 million and as family members grew increasingly concerned Tony was squandering their inheritance. Last year, Tony resigned from Hulman & Company's board of directors, his last remaining role within the family fortune, following reports that he and an outside group were attempting to wrestle control of the IndyCar series away from the IMS. Then-IMS CEO Jeff Belskus claimed that George agreed to resign due his conflict of interest. Belskus emphasized at the time that the IndyCar series was not for sale and no offers of sale were under consideration.

What Belskus did not disclose was the fact that the Hulman-George family members had already made up their minds to unload the IMS and were working behind closed doors with Indiana legislators on a plan to capture up to $100 million in state funding for improvements to the IMS in an effort to enhance the value of the IMS to a potential suitor. George's departure from the board of directors gave him a green light to form an outside group of investors to acquire the IMS. The family then brought in Mark Miles, the former head of the Central Indiana Corporate Partnership and chairman of last year's Super Bowl Committee, to step into a new role as IMS' CEO replacing Belskus, who remained with the IMS in a reduced capacity.

The source says Miles was fully aware of the planned sale of the IMS when he was brought aboard as its CEO last fall, and even Indiana's top lawmakers knew of the planned sale but agreed to hold that information close to the vest to avoid any risk of upsetting a taxpayer-financed buyout of the IMS they had already agreed to back before the convening of this year's legislative session with no public debate.

Essentially, Indiana taxpayers are being taken for a ride as part of a deal to provide Hulman-George family members with a sweetheart buyout deal of the IMS financed on the backs of taxpayers. The $100 million cash infusion ensures the buyout group led by Tony George that it will have free money to remake the IMS in their own vision. The rich get richer, and the poor get poorer.

UPDATE: IMS's spokesman Doug Boles denies there are any plans to sell the IMS according to Jalopnik. Of course, the IMS couldn't acknowledge that was their intention even if it was. If I were the lawmakers so anxious to pass this $100 million giveaway, I would at least include language in SB 91 conditioning the state's participation on that commitment by the IMS. It's just a hunch, but I'm pretty sure the IMS won't agree to that term.  


Had Enough Indy? said...

You are right on the money, so to speak. If IMS is sold, they have to pay back all outstanding bonds. And the bonds have to be structured for prepayment without penalty.

Gary R. Welsh said...

It makes too much sense to do that, Pat, so it won't happen. Everyone over at the State House understands the family's situation and knows that something has to take place to line up long-term ownership/management of the IMS. They know that doesn't rest with the current ownership. It could include Tony with the backing of well-heeled investors, but it can't remain in its current hands.

Had Enough Indy? said...

The future may lie with other ownership of IMS - but the pot should not be sweetened by $100,000,000 from taxpayer funds.


Unigov said...

I call BS. The phrase "not for sale" can mean two things - it won't be sold, or "we already have a buyer".

I lean towards the idea that IMS already has a deal put together, contingent on the pot being sweetened with $100 million of tax revenue.