The 2015 Indianapolis 500 By The Numbers

by John S Kiernan

Indy 500 by the Numbers

The Indianapolis 500 is one of the most quintessentially American events on the annual sporting calendar, converging 300K visitors to the city’s storied Motor Speedway and gluing million pairs of eyeballs to television sets globally. We watch for many reasons. Many invariably tune in for the potential excitement of fiery wrecks and pit crew brawls. But then there are others who root for favorite driver or are mesmerized by the poetry of pit stops and the sheer engineering brilliance fueling cars that reach an excess of 225 mph.

Much is also on the line with the 99th iteration of the Indy 500 – both on and off the track. Indy Car racing must fight to stay relevant in the face of Formula One competition, fading ratings and lackluster sponsorship. “As global television becomes the norm, the growth of Formula One in the U.S. may begin to compete even more so with Indy Car for consumer and sponsor attention,” says Joe Cobbs, assistant professor of sports business at Northern Kentucky University. As a result, “the Indy 500 must leverage technology to provide fans the most exciting viewing experience whether at the race, watching it on television, or on a mobile device,” according to Doug Blais, professor of sports management at Southern New Hampshire University.

In order to help you better comprehend the scale of this super sporting spectacle as well as the underlying storylines and supporting economics, we compiled a list of some of the most revealing statistics about it. We also polled a panel of leading sports business and auto racing experts about their feelings on fantasy sports, the economic impact of the Indy 500 and who will be drinking the milk when the engines stop roaring.

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Ask The Experts:  The Business of IndyCar & Winner’s Picks

Casual observation – not to mention television ratings information – seem to indicate a declining interest in IndyCar racing among U.S. sports fans, especially in comparison to the rampant following that NASCAR has amassed.  Most people couldn’t name more than a couple of drivers – if that, and the annual rite of tuning into the action at Indianapolis Motor Speedway seems to be fading from the consciousness of the average American family.

What does this mean for the future of the IndyCar business?  For insight into that, as well as some picks for drivers to root for this weekend, we turned to a panel of distinguished sports business and motorsports experts.  You can check out their comments below.

  1. To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?
  2. What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?
  3. How did Indy Car’s sponsorship hold up during the recession? How did this differ with other sports and to what do you ascribe the difference?
  4. What’s your take on the new car shapes?
  5. Could we ever see an all-electric Indy 500?
  6. What are the biggest issues facing the business of Indy Car Racing?
  7. Who is your pick to win? Will Helio Castroneves ever get his 4th Indy win?
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  • Kyu-soo Chung Assistant Professor of Sport Management at Winston-Salem State University
  • Kevin G. Quinn Dean of the Donald J. Schneider School of Business and Economics and Professor of Economics at St. Norbert College
  • Craig Depken Professor of Economics at University of North Carolina at Charlotte
  • Joe Cobbs Assistant Professor of Sports Business at Northern Kentucky University, Haile/US Bank College of Business
  • Doug Blais Professor of Sport Management at Southern New Hampshire University

Kyu-soo Chung

Assistant Professor of Sport Management at Winston-Salem State University
Kyu-soo Chung
To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?

Indy Car is not the only entity to have seen its TV viewership decline. Declines have been steady across all the major racing events in North America. Americans’ disposable time is only getting smaller with such a variety of things to enjoy. They simply can’t afford the luxury of giving up over two or three hours to watching racing.

To increase Indy 500’s viewership, I would suggest they set up a light system at IMS and become a little more flexible about the event time. It’s not uncommon to see spectators get a little more excited watching night racing. Sunday noon might not be the ideal time to watch a race as there are lots of things going on around that time.

In the racing industry, there is a saying that “racing kills racing” — meaning that spectators and TV viewers can easily get bored if they only have racing events to view. The Indy 500 should provide lots of entertainment on the final day. People go to the races not just to watch the competitions and speeding cars but to also enjoy a variety of ancillary services such as music, food, or social opportunities. Too much focus on racing could make some of Indy 500’s casual fans reconsider a future visit.

What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?

I think both will increase, though only slightly. I’ve read many articles on how Indy Car has been putting a lot of effort into changing their business model from mere reliance on past glory to cutting-edge and themed entertainment. Now, they’ve got Verizon Wireless, a mega-sponsor for the sport. It’s almost two years since Indy Car achieved such a victory. It’s probably a time to see some visible outcomes.

How did Indy Car’s sponsorship hold up during the recession? How did this differ with other sports and to what do you ascribe the difference?

In my opinion, Indy Car should have longer series to hold up their sponsorship during the recession. The series is too short to make issues. We fans always want to hear the behind-the-scenes stories of racing or even trivial things about the drivers. With the current schedule, it’s really hard to hear any stories about Indy Car from the national media. All these things are detrimental to increasing return-on-investment for sponsors and Indy Car. The simple rule “make noise, then get some attention” would work for Indy Car, particularly for its sponsorship.

What’s your take on the new car shapes?

Well, big difference, huh? Also, spectators see many differences between Honda chassis and Chevy chassis. Beyond the technologies that were applied, these new shapes are heavier, bolder, and more athletic. Is it just me or does the new model got a bit of the Batmobile look to it? Anyway, it’ll be fun to see which type of chassis goes faster.

Could we ever see an all-electric Indy 500?

Of course, technically it’s possible. But Indy Car has been around long enough to know high tech doesn’t necessarily mean more spectators or revenue.

I think it depends on how an all-electric Indy 500 would be able to provide sensationalism to fans and spectators. Many hardcore racing fans think Formula E misses something, which is selling-point of the sport. That’s the blare from the engine. Also, spectators always want to see faster racing cars. Such sensual components are basic but essential things that spectators pay the price of admission for. Without satisfying those needs, an all-electric Indy 500 couldn’t last long.

What are the biggest issues facing the business of Indy Car Racing?

Indy Car’s core fans are getting old. This has been observed in all of North America’s races. Still I haven’t seen any systematic, organized activities to fill this gap that is forming. Indy Car should develop strategies that can attract younger people. NASCAR is working hard at marketing young drivers to young populations. NASCAR seems to be fairly nimble at handling social media. Indy Car should do something to catch the interests of Millennials.

Who is your pick to win? Will Helio Castroneves ever get his 4th Indy win?

I guess I would put my money on him. Drivers remember every single moment of past victories in a certain venue and their mind and muscles work together to make it a repeat. That’s why each racer has a favorite track. It’s not at all uncommon to see a racer struggling and then suddenly win where he’s won before. Indy 500’s spectators might want to see some dark horse come out on top, but seeing a driver win his fourth Indy would also be a great day for the Indy 500.

Kevin G. Quinn

Dean of the Donald J. Schneider School of Business and Economics and Professor of Economics at St. Norbert College
Kevin G. Quinn
To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?

Last year's ratings were actually a bit higher than in 2013, but down noticeably from 2012 - all told, about 6 million people watched last year's race. There might be a few reasons for this. First, ABC began airing more Indy series races in 2014, and NASCAR name Kurt Busch ran for the first time last year, too. Furthermore, the end of last year's race was contested. However, the ratings trend for the event is still downward. NASCAR's Coca Cola 600, run the same day, generally outdraws the 500 in terms of viewers.

What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?

I would expect that the Indy 500 will continue to play second fiddle to the Daytona 500, which has really now become America's Race. It's a pretty crowded sports landscape - the NBA playoffs, NHL playoffs, and Major League Baseball are in high gear when the 500 is run. In addition, Indy racing continues to suffer from the split in open wheel racing. Not only are viewers fragmented, but there are ever more opportunities for sports sponsorship, which makes for a difficult marketplace for Indy.

Indy car branding is not particularly regarded by fans as being influential in terms of its motivation to purchase a sponsor's product. NASCAR does a little better on this score, and has roughly double the fan base... and they are more enthusiastic than Indy fans.

A bit of good news - while Indy car fans tend to run older, there is some indication that they are beginning to show improvement in the youngest demographics. This is important - the generation that remembers the Indy 500 and its glory years as Must See TV and the official opening of summer are dying off. My guess is that younger people - the EPL generation of U.S. fans - are less bothered by "non-American" names than their parents.

How did Indy Car’s sponsorship hold up during the recession? How did this differ with other sports and to what do you ascribe the difference?

I have not seen the numbers, but given the difficulties of the global auto industry, I can't imagine that Indy didn't take a hit, but they might not have been as affected, relatively speaking, as was NASCAR.

What’s your take on the new car shapes?

They look cool - and may help incite additional interest in a generation raised on Transformers.

Could we ever see an all-electric Indy 500?

Possibly, but not very soon. My guess is that some random all-electric series will spring up sometime, but it is going to be a while before it challenges NASCAR. Probably not until all-electric vehicles become a bit more mainstream.

What are the biggest issues facing the business of Indy Car Racing?

Relevance, product differentiation, revenues, and viewership. They need something to break them out of the pack. Danica couldn't get that done.

Who is your pick to win? Will Helio Castroneves ever get his 4th Indy win?

Helio just turned 40, so he has a few years left - why not him? That said, there are probably about 10-12 drivers each with a pretty decent shot, among them Montoya, Kanan, and Andretti.

Craig Depken

Professor of Economics at University of North Carolina at Charlotte
Craig Depken
To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?

I am not sure that there is a particular reason for the ratings to be down at one race. Overall, NASCAR and Indy car ratings seem to be falling over time and this might reflect that the sport is lower in general popularity than it was several years ago. In NASCAR we have evidence that fans like fewer cautions, more passing, and more competitive seasons. I have not seen similar research in Indy Racing but the same influences might hold.

What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?

Sorry, I don’t make predictions like that. However, it does appear that the Indy circuit is trying to increase its exposure through regular television broadcasts – hopefully for the circuit that translates into more people watching the 500.

How did Indy Car’s sponsorship hold up during the recession? How did this differ with other sports and to what do you ascribe the difference?

Racing sponsorship dollars are not regularly public information. We do know that NASCAR sponsorships fell off during and after the recession – both in terms of race sponsorships, team sponsorships, manufacturer subsidies. I don’t know about manufacturer subsidies in Indy but I would suspect that there was a drop-off on race sponsorships as was in NASCAR.

What’s your take on the new car shapes?

New shapes are fine by me personally, but I have wondered in the past how changes alter the draw of the audience. Not sure I have seen any strong evidence that changing the cars alters demand/audience.

Could we ever see an all-electric Indy 500?

I think an all-electric Indy (top flight) circuit is unlikely but I could see lower levels of both Indy and NASCAR being electric in the near future. On the other hand, if the sport suffers enough political backlash, then anything is possible.

What are the biggest issues facing the business of Indy Car Racing?

All racing circuits face the challenge of (a) maintaining hard core fans while (b) encouraging marginal fans to attend or watch the events. What often attracts the marginal fans does not help maintain the hard core fans and vice-versa. In the 1990s and early 2000s it was easier to do both by expanding the circuit and having races in areas where they had not been held before – this was especially true in NASCAR. This is harder to maintain now as demand weakens and it is not obvious that the expanded circuit (geographically) is sustainable.

Joe Cobbs

Assistant Professor of Sports Business at Northern Kentucky University, Haile/US Bank College of Business
Joe Cobbs
To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?

The competition for sports viewership and attention gets fiercer every year. To reverse the rating decline, Indy Car has to capture the casual sports fan for the Indy 500 in the same way the Kentucky Derby relies on such viewers. Increasing sponsorship activation is one avenue Indy Car has emphasized and may begin to pay dividends if the sport can maintain consistency in its sponsorship roster.

What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?

I think sponsorship revenue will increase this year but ratings will remain flat or perhaps even decline slightly. Increasing sponsorship activation can have a positive influence on viewership but a lag in realizing the growth is not uncommon. In other words, turning around the decline is a long term marketing process.

Could we ever see an all-electric Indy 500?

Possibly; the Formula E series sanctioned by the FIA seems to be experiencing a respectable first year with several automakers involved. While an e-Indy 500 seems somewhat counter to Gasoline Alley, I would not rule it out in the long term, but I also would not bet on it anytime soon.

What are the biggest issues facing the business of Indy Car Racing?

As global television becomes the norm, the growth of Formula One in the U.S. may begin to compete even more so with Indy Car for consumer and sponsor attention. However, TV ratings likely remain the key driver for growth for Indy Car.

Who is your pick to win? Will Helio Castroneves ever get his 4th Indy win?

Will Power.

Doug Blais

Professor of Sport Management at Southern New Hampshire University
Doug Blais
To what do you attribute the Indy 500’s poor ratings last year? What measures can be undertaken to increase viewership?

While ratings were up two tenths over 2013, it was still one of the lowest ratings in the history of the race. The Indy 500 is a hallmark event and must remain relevant in the sports landscape. The Indy 500 is attempting this in various ways, including Jeff Gordon driving the pace car and Florida Georgia Line performing the night before the race. These activities will grab headlines however; there needs to be an integrated approach at the race and series level. Verizon becoming the title sponsor of the Indy Car Series will help reach the coveted 18-34 year old demographic. This must be leveraged at all levels, especially using social media. Verizon, the Indy Car Series, and the individual races must work together with their broadcast partners, ABC and NBC to increase awareness and ultimately, viewership.

The sports landscape has become so crowded and segmented that Indy racing will never get back to its heyday, they must focus on their core segment while strategically targeting and developing new fans.

What are your predictions in terms of TV ratings and sponsorship revenue for this year’s Indy 500?

Ticket sales are up over last year at this time. If this is any indication, the race should continue with another small increase in ratings over the 2014 race. Helio Castroneves’ crash during practice may have some interesting consequences. The fact that the crash was so dramatic and he walked away unscratched makes it a feel-good story. Castroneves is one of the more recognizable racers to the general public and the video footage of the crash has been played over and over in the news, shared on Facebook, Twitter, Instagram, Snapchat, and various other sources. This will increase the awareness of the race and potentially draw in additional viewers.

Indy 500 sponsorship has continued to grow since 2011 after they reconfigured and added sponsorship categories – there is no reason to believe this growth will not continue. There has been a good deal of buzz surrounding the race obtaining a presenting sponsor for the 2016 race. If this occurs, it will provide added visibility and revenue for the Indy 500.

What are the biggest issues facing the business of Indy Car Racing?

Remaining relevant. The Indy 500 must leverage technology to provide fans the most exciting viewing experience whether at the race, watching it on television, or on a mobile device. The new Verizon mobile app for the Indy Car Series is a great start.

Who is your pick to win? Will Helio Castroneves ever get his 4th Indy win?

I must assume that after his crash, Helio is the sentimental favorite – I am going with Helio!

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John Kiernan is Senior Writer & Editor at Evolution Finance. He graduated from the University of Maryland with a BA in Journalism, a minor in Sport Commerce & Culture,…
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Discussion

 
By: Torsdale
May 21, 2015
The Indianapolis 500 used to be the talk of the Nation. Then, around the time Rick Mears quit, it became a giant bore. Complete field of clones. No innovation. Only losers watch it anymore.
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