IndyCar: A Tale of Two Cities

Now we know why the IndyCar Series will not race at the Milwaukee Mile in 2010. Frankly, it should not be a surprise to anyone who has been paying attention.


Dave Kallman of the Milwaukee Journal-Sentinel confirms the worst.

"...as much as the fans of the IRL race are devout, there aren't enough of them willing to buy tickets, and the event does not make money for the track."

If the Mile makes it to next season, then it will have NASCAR's Triple-A feeder series to thank. The IRL has failed in Milwaukee.


Milwaukee to Baltimore: the New Math

Meanwhile, attendance figures for the proposed Baltimore Grand Prix just keep getting better. Is it not amazing that the same series that couldn't draw in Milwaukee is going to be the most popular thing to hit the streets of Charm City since John Unitas?



Let's see. IndyCar attracted approximately 28,000 spectators at Milwaukee this year.

28,000 * 4 days = 112,000 fans for the Baltimore Grand Prix

2,000 crew, officials, vendors, volunteers, etc. * 4 days = 8,000 more in attendance


Total Baltimore Grand Prix Attendance = 120,000

Awesome!

Incidentally, the crowd at this year's Honda Indy Toronto was estimated at between 30,000 and 40,000 spectators. I can't find any records of public subsidies for that one. But we do know that the IndyCar teams incur the Toronto Tax as part of their engine lease payments to Honda.

Just think of the exposure. How else might Baltimore be seen on television by an audience like this?


Warning to the People of Baltimore

This race is a boondoggle. Most of the money that might be spent at the Baltimore Grand Prix would likely be spent in Baltimore anyway. This thing will generate less economic output than an Orioles' weekend series with the Red Sox.

Don't take my word for it. Ask the good people of San Jose. Check with the folks in Edmonton. Consult the Texas Comptroller of Public Accounts.

Ask yourselves the following question.

If IndyCar racing attracts so many spectators, then why is it being dropped by facilities that are in the business of promoting auto racing events? Why can't IndyCar earn a profit at the nearby Richmond International Raceway, or the Milwaukee Mile, one of the world's most historically relevant race tracks?

IndyCar racing is a market failure, a product that has been rejected by auto racing consumers in the United States. That is why it needs government subsidies for a minor league event at a glorified test track in Birmingham and for a contrived street festival in Baltimore.

This event will never be profitable, although the same might not be true of the promoter - that will depend on the amount of the government handout. Baltimore and the State of Maryland will subsidize this mediocrity every year for as long as it exists.

This IndyCar Series does not deserve the Milwaukee Mile. It certainly doesn't deserve to be bailed out by Maryland taxpayers.

Roggespierre

Milwaukee Mile: IndyCar can Wait

According to Dave Kallman of the Milwaukee Journal Sentinel, a new promoter will assume control of the Milwaukee Mile this Friday if it pays NASCAR's 2010 sanctioning fees by Thursday. It seems that the Indy Racing League is being treated as an ancillary concern.

This makes perfect sense.

Forget for a moment that NASCAR Grand National drew an estimated 45,000 spectators this year while the IRL increased its audience to 28,000 paying customers. The old Mile promoter owed money to both series. Unlike the dominant market leader, IndyCar decided to forget about returning to Milwaukee until at least 2011.

The key here is television revenue and commitments. NASCAR has quite a few of both. IndyCar has very little of either because the product is not designed to attract U.S. television viewers.

Therefore, NASCAR is willing to take a chance on the new Mile promoter because it needs to fill its Grand National television schedule. If the promoter fails to pay, then NASCAR still collects a (smaller) profit because it earns significant television revenue.

The economics of IndyCar racing are very different. Most of its revenue is derived from sanction fees that are paid by promoters. The IRL can not afford to get stiffed again in Milwaukee. If the state and municipal governments in Wisconsin were more like those in Alabama, then The Mile would be on the 2010 IndyCar schedule.

Unfortunately, the Dairy State is not willing to subsidize IndyCar racing. The politicians in Alabama are more amenable. Therefore, Terry Angstadt is taking his failed product to Barber Motorsports Park, which offers less seating capacity but more profligate government agencies.

The Wisconsin State Fair Board demands that the Milwaukee Mile operate in the competitive marketplace. That is bad news for the IndyCar Series, a market failure that requires taxpayer handouts to sustain its unwanted product.

Roggespierre

New Milwaukee Mile Promoters

Historic Mile, LLC is the proposed new promoter of the Milwaukee Mile.

The principals are Tony Machi, Steve Jones and the expatriate Jim Beaudoin. The group has signed a letter of intent. It now has 55 days to demonstrate that it has the financial wherewithal to promote the historic oval.