Hulman & Company Press Conference Transcript
Tuesday, Nov. 20, 2012, Indianapolis
THE MODERATOR: I want to thank everybody for coming out this morning, also thank those who have tuned in via our live stream. We have a great announcement we're going to make here this morning, and I'm going to introduce the folks who are going to participate, and then I'll turn it over to them. On my far left is Jack Snyder, a longtime board member here at the Indianapolis Motor Speedway. Jack is going to introduce the two men to my immediate left and the new roles that the two of them are going to play in taking Hulman & Company and INDYCAR to the next level on behalf of the board of directors.
JACK SNYDER: Thank you, Doug. And thank you all for being here today. I understand this is being live streamed, and some of our race fans may be watching, and I thank them for watching.
We're pleased to announce today the creation of a new management structure that includes the addition of Mark Miles as the chief executive officer of Hulman & Company. Jeff Belskus remains as president of Hulman & Company and as president and CEO of the Indianapolis Motor Speedway and as interim CEO of INDYCAR.
The combined talent and experience that these two possess will create a new, responsive and energized management structure for all of the business units of Hulman & Company Mark will focus on maximizing productivity and profit for the entire enterprise, and Jeff will focus on the Indianapolis Motor Speedway and INDYCAR.
Both individuals will continue serving on the board of directors of Hulman & Company and on the board of directors of the Indianapolis Motor Speedway.
You undoubtedly know Mark as the chairman of the 2012 Super Bowl committee and the leader of the team that managed one of the most successful Super Bowls in NFL history. Mark brings a unique blend of business experience, both public and private, along with sports league and major event management experience. This experience will serve Hulman & Company well and all of its business units well.
Mark has served as the CEO of the Central Indiana Corporate Partnership, known as CICP here locally, for six years. Under Mark's leadership, that organization has grown from one with a single initiative and 12 employees to a thriving business with multiple branded initiatives that include BioCrossroads, TechPoint, Conexus Indiana and Energy Systems Network.
Prior to that Mark was the chief executive of the ATP Tour. That's the governing body of the men's international professional tennis circuit. There he produced impressive revenue gains; he launched innovative marketing initiatives; he expanded the global presence of tennis through successful events in Asia, the Middle East and Latin America; he increased prize money by more than 80 percent and developed long term commercial sponsorships.
In addition to serving on the Hulman & Company board, Mark is also a director of The Pantry, one of the largest independently operated convenience store chains in the country, operating more than 1,500 stores in 13 states. He also serves on the board of City Securities, a state wide securities firm headquartered here in Indianapolis.
Jeff has been with Hulman & Company 25 years. We just celebrated that 25th anniversary last week, and he has served as president and CEO of the Indianapolis Motor Speedway since 2009. For the past year, he also served as president and CEO of Hulman & Company. Jeff joined the company in 1987, Pan-Am Games year, Mark. He was named treasurer in 1989 and has served as the CFO of the company since 1989. Jeff was promoted to vice president in '91 and executive vice president of Hulman & Company and its subsidiaries in 1994.
Jeff serves on several boards, including the Rose-Hulman Institute of Technology, where he is the vice chair. He is also on the boards of the ISU Foundation, Morris Plan Company of Terre Haute, the Indiana Chamber of Commerce, the greater Indianapolis Chamber of Commerce, the 500 Festival Board of Directors and the Central Indiana Corporate Partnership that Mark has led for six years.
I speak today for Mari Hulman George, the chairman of the board of directors of Hulman & Company and the chairman of the board of directors of the Indianapolis Motor Speedway and for the other members of those boards.
The addition of Mark Miles and the combination of Mark and Jeff will give Hulman & Company the proper leadership resources to effectively address and take advantage of the many opportunities for Clabber Girl, IMS, INDYCAR and the other business units.
These two individuals have provided the leadership for two of the largest and most successful sporting events in Indiana history: The 2012 Super Bowl and the Indianapolis 500-Mile Race. Since March of this year, they have worked closely together on the boards of Hulman & Company and IMS.
I now invite Mark and Jeff to make their remarks, and then they will take questions. Mark?
MARK MILES: Thank you, Jack. Folks, it's incredibly exciting to be here today and to be part of these announcements and to be part of this enterprise going forward. I'm delighted that you all could be here with us in person, and I'm pleased that the others are joining us by streaming. Apparently the word is getting out because I can feel the phone in my pocket exploding. News travels fast.
Feels to me like a couple days from Thanksgiving - you might excuse me taking a little latitude and beginning by thank you's, the things I'm grateful for, a little bit earlier than normal. First I want to say thanks to the Hulman-George family. For me growing up here, they have been Hoosier legends, synonymous with racing around the world. This place across the street, in particular, is so special, so much a part of our identity, and that family has been inextricably linked obviously to motor racing and to IMS and IndyCar Series.
And for me personally, they've been incredibly supportive. It's been a great pleasure to get to know them up close during my months as a board member and to see firsthand their passion and commitment to the sport and this institution.
I also want to say thanks to the other board members at Hulman & Company, all of whom I've known for a long time. I think if you look at their backgrounds, they have a remarkable diversity of business experiences and bring real strength to this enterprise.
I want to say hi to my own family. My wife, Helen, is here, and Jack, one of our four children, are here, and it is only with their support and passionate willingness to embrace this opportunity that we embark on the challenge. And I want to say thank you to Jeff Belskus and his team. I have gotten to know Jeff very well. I have enormous respect for Jeff and his leadership abilities and his knowledge of these businesses and this sport of motor racing, and I have no doubt that we will work absolutely closely together as a team, and we think we can get some great things done.
Like many Hoosiers, Indianapolis Motor Speedway and INDYCAR are treasured parts of our heritage. I remember well as a kid, I don't think my dad ever got out-of-pocket to actually get me here in my early ages, so Memorial Day was always the family and the kids being sort of glued to the radio and listening to the race, something that was part of our family tradition, something we wouldn't have missed, and so you think to sort of my generation back then as a kid, names like Foyt and Andretti and the Unsers and Parnelli Jones and Johnny Rutherfords, et al., and then the international invasion that took place in that green car and those personalities are kind of where I check in as a fan of this sport. But most importantly through the identity or through the perspective of a person who grew up here and appreciated how much all this meant to our community.
And then as Jack mentioned, from 1990 through 2005, as an adult, at the helm of the international men's professional tennis circuit every year, it happened that Memorial Day coincided with the French Open Championships in Paris, and so for I think all of 15 consecutive years on the evening of Memorial Day, I would hurry back from Roland Garros and get to the hotel and turn on the television, never wanting to miss Jim Nabors singing and catching the race on TV. It was an interesting experience with French-language commentators.
But we could follow it wherever we were in the world, and it was almost always Paris.
During those years, living and traveling outside of the United States more than 50 percent of the time, I can tell you, you've heard this if you're an Indianapolis person, but this is a person that's experienced it, it's absolutely true, you can't go anywhere in this world and have conversations with any people who have any kind of world view and not have them know about Indy, INDYCAR, the Indianapolis Motor Speedway.
And so I come to this challenge with the perspective that we have a remarkable opportunity with a remarkable, potent global brand.
And that's why when I was approached by the board about considering joining the firm as the CEO of Hulman & Company, it's fair to say that they had my attention immediately. Hulman & Company is essentially a holding company many of you know this it is a diverse group of businesses. Motor racing is front and center and our outward-looking face and perhaps greatest opportunity.
IMS Productions is a part of the family of companies. We're in their facilities today. Robby Greene is doing a great job of leading that organization. Maybe half of the business is racing and sort of internal, but maybe about half of it is outside customers, and that is a growing enterprise.
Gary Morris runs Clabber Girl founded in 1999, headquartered in Terre Haute, a household name. I don't do a lot of baking, but even I knew what Clabber Girl was before I got involved with this company. They're not just in baking powder and baking soda and corn starch, they also have other products, and it is a vibrant enterprise based in Terre Haute, and there's also a portfolio of, I think, important real estate holdings.
I feel like in a way my professional experiences over my lifetime have prepared me for trying to help lead Hulman & Company I will not be the hands-on, day-to-day management of the motorsports business, but I believe I can help.
Jeff has a lot on his plate. He'll talk about that in a moment. But I hope and believe that I can make a contribution to his being successful.
Having spent 15 years as CEO of the men's professional tennis circuit, a global league, I think there's some relevance, so let me put that into perspective, two pieces.
The first is that the circuit itself was launched in 1990. I was the first - it was three months into the circuit when I became the chief executive officer. So a start-up, new governance, and most people felt like it would fall over by the time I unpacked. It was set up to be a novel experiment in the management of a professional sport, where my board was half players and half tournament owners. My job was to lead the organization and to keep it together and to get the talent to think like owners and the owners to appreciate the perspective of talent, and to bring them together around difficult challenges with a clear and lasting consensus.
That in and of itself, I think, while the cast of characters and the sport itself is different, is very relevant to the success of the IndyCar Series, and I hope I can help Jeff with that.
We had the sanctioning body role, so we made rules, we made a calendar, we fined people, we suspended people, we did things that a governing body does for 15 years in the sport of tennis. We did marketing and promoting of the sport. We developed sponsorships that was highlighted by what became, I think, a 15-year sponsorship relationship with Mercedes-Benz. They invested more than a quarter of a billion dollars in the ATP Tour and its tournament during my tenure.
We created ATP Properties, which in London produced most of the top-level television of the sport that was sold and distributed around the world, and so we have some experience with a venture very much like the one we're standing in today.
We expanded the circuit globally, creating important tournaments in the Middle East and South America and in Asia, and we sold television rights and did business in at least 35 countries every year during this tenure.
And all that happened in the context where we had sustained solid growth, and Jack mentioned the prize-money increase. By the time we retired from tennis, the beginning of '06, an outside consultancy put a value on the whole enterprise of men's professional tennis as a billion-dollar industry. So that's kind of the circuit side, which I think has a parallel.
The other side of my background is in doing big events, so it's getting to be very ancient history, and I appreciate that, but the Pan-American Games that some of you were involved with 25 years ago for this community was a big deal, and I had the honor of being the president of the organizing committee.
For those of you who don't know it or remember it, it was three weekends of network television coverage, and we produced the signal for that as a committee. There are more events in it than there are in the summer Olympic Games. There were more than 4,000 athletes, coaches and trainers, more than 1,000 international journalists converging on us. Somehow it's hard to believe, but there were 36,000 volunteers, local folks that put all that together in a somewhat organized way, and we sold more than a million tickets for the events.
And as Jack mentioned earlier this year, I had the real honor to be chairman of the host committee for the Super Bowl here in Indianapolis. I think it's not bragging to say that it represents the high-water mark for a long list of great sporting events that have been hosted in Indianapolis. I think our whole community was pretty proud of that. And it is widely regarded outside our community and the NFL as successful.
In one way, I think we showed at least an ability to innovate in the creation of the Super Bowl Village downtown, which was unique to the NFL Super Bowl experience where 1,100,000-plus fans came to play in a really vibrant, fun environment was an innovation which the league is now trying to incorporate into their bidding process every year wherever they go.
So there's the events side of sports that I hope prepares me for this position, and finally Jack mentioned kind of a diverse business background. I've had the privilege of serving as the director on a company called The Pantry that's traded on NASDAQ. It's over a $6 billion-a-year firm with 1,600 some convenience stores throughout I think 13 states, like 15,000 employees, a substantial, complicated operation that I think has - I've learned a lot from. And the same for a smaller enterprise but locally, the private company known as City Financial Corporation.
I hope all that prepares me for this task. I wouldn't have signed up if I didn't think I could bring value. I'm looking forward to getting started and being fully immersed in this by the end of this year. Immediately I'll set out to get to know the stakeholders, the company inside this enterprise whom I think very highly of from the outside. I will look forward to understanding, really getting beyond the board members' perspective to understanding the businesses in detail, and getting outside with Jeff to be with our customers and our stakeholders and to understand what they think about the business and figure out how we can be better aligned with those stakeholders going forward.
We want to focus on strategy development. We've got an outside group of some considerable reputation in BCG. It started previously. We think that strategic development work will be done early in the year and that will inform some of our decisions going forward.
And finally, I want to help Jeff. Jeff has done a remarkable job on this thing. As I look at 2013 for INDYCAR, I think all the building blocks are in place, and I have no doubt that with Jeff's leadership, the series and the events at IMS will proceed forward without a hitch, and that will be a starting point to grow it all from here, and I'm looking very much to working with him in that regard.
So with that, it's my pleasure to introduce Jeff for his comments. Thanks.
JEFF BELSKUS: This is a very exciting time for Hulman & Company, and I'm personally excited about it for several reasons. Mark is a great addition to our team, and I'm very fortunate to have an opportunity to work with someone like Mark, and with the skill set he brings and the background he brings, I'm just very pleased.
Secondly, Hulman & Company is fortunate to have so many growth opportunities. You heard Mark and Jack both mention through Clabber Girl, IMS Productions, Indianapolis Motor Speedway, INDYCAR, we've got a lot of great opportunity, and with the background and the skill set that Mark brings, he's going to help us translate this into business success more rapidly.
Most importantly, having Mark tasked with the broader issues of Hulman & Company, the business side, is going to allow me to focus on the race series and the event side of our business, which I'm excited about. At the Indianapolis Motor Speedway, we had a great year in 2012; the Indianapolis 500 was one of the best races that people can remember, and record number of lead changes and just a really good event. We've captured and maintained a lot of the momentum from the 100th anniversary and into 2012, and we're looking forward to keeping that momentum going into 2013.
We have an exciting new partnership with NASCAR through our Super Weekend, the Kroger Super Weekend, and added racing events and content for our fans that was very well received.
The IndyCar Series also is filled with excitement and opportunity. 2012 was a great season on the track with the new equipment, the new car, the new chassis produced great racing, and I mentioned the Indianapolis 500 and the number of lead changes, but we also, our series championship went down to the final race in California at Fontana. It was exciting to see, crowned a new champion, an American, Ryan Hunter-Reay. We're going to be celebrating his season victory on December 6th.
Saw some fresh faces in victory circle with Ed Carpenter and Justin Wilson claiming victories during 2012. I spent a lot of time in the last three weeks engaging and working with team owners, promoters, sponsors, engaging fans and understanding what opportunities we have, what the barriers are to those opportunities, how do we capture them. We've got a lot of good things ahead of us, again, a lot of great opportunity. The plan for 2013, a lot of it has been launched already with our schedule, and many things are underway. But we have other issues and other things that we need to deal with that in the weeks to come and early in 2013 we're going to be providing clarity on things like Lotus and engine supply and tire supply long-term and where that's going and the feeder system, the ladder system and Indy Lights and the car and chassis options there, aero kits implementation.
So we're going to work hard at bringing clarity to these issues and working the process to bring them to a resolution.
I want to finish by thanking the Hulman-George family. Nancy George is here. It's good to see you, Nancy. I'm appreciative for this opportunity. I'm appreciative for their commitment to motorsports, to the Hulman & Company business' longstanding commitment and the investment they're willing to make and the significant investment in our management team and the addition of Mark. So it's a very exciting time for us.
Q: Jeff, two questions: (Inaudible), and two, what do you bring to this table that he doesn't?
BELSKUS: You know, that was a mutual decision, and that's not what we're here to talk about today in terms of Randy (Bernard). We're looking ahead to the future, and again, it was a mutual decision.
Q: Can you answer the second part then about what you bring to the table that he didn't?
BELSKUS: Well, you know, Randy made a lot of positive contributions to the IndyCar Series. We've got a fresh perspective, a new management team, and certainly I've outlined a couple of the issues we're dealing with here, and we're working through those issues and are going to resolve them.
You know, it's - we continue to have opportunity and recognizing those opportunities and capturing those opportunities is going to be our focus moving ahead.
Q: On the television end of it, are you going to try to upgrade the space or network you're on, and number two, are you looking to add a race down there in Dallas?
BELSKUS: Regarding the television situation, we have long-term agreements in place with our current TV partners. They're good partners for us, and we're looking forward to working with them on how to improve the TV rating situation. You know, we need to invest some money. They're willing to invest some money in promotion, tune-in promotion. I think that's been something that's been lacking in the past, and I believe will help with the ratings trends.
Regarding the race schedule, it has been set for 2013. We're not anticipating today, sitting here today, any changes to that schedule, so we're - for 2014 and beyond, we're going to keep our options open, and if a good opportunity presents itself there, then certainly we'll have that conversation.
Q: Will the interim title continue to be CEO for you?
BELSKUS: It's still interim, and we have not defined a search, and I'm CEO of the IndyCar Series and intend to function in that role going forward.
MILES: I think it's vitally important. It's important as an economic question financially, and for the board, I think we believe that the destinies of IMS and the Indianapolis 500-Mile Race and the IndyCar Series are inextricably welded, woven together. So we are determined to grow the IndyCar Series as a sport, and that'll help the Indianapolis 500-Mile Race in the process, and I think you can see us working very diligently to grow the business.
Q: Mark, could you talk about how not being hands-on is going to be able to be accomplished, and yet there's so much work to do that Jeff can't possibly do it all?
MILES: Well, some of that we'll figure out as we go along, but it's clear to me that as soon as I can extricate myself from my current employment and really insinuate myself here, we've got to get out and meet the stakeholders and understand the thinking and the economics from all the perspectives for INDYCAR and for all of our businesses.
Being out there, which takes a lot of time, at the same time that we're running the series for 2013, is something I think I can bring for the enterprise, for the board and for Jeff.
This strategy work that's going on needs to - it's important to us. It's not going to create an off to on, off white kind of sea change in my estimation in terms of the business, but I think it will sharpen our strategies and focus and allow us to be clear on what matters most to us and what we have to do in what order to grow the sport and all the businesses as quickly as we can. I'll be very engaged in that work.
You know, and if you're going to really move the needle with an enterprise, you've got to know the people, the markets, their customers, and that's going to take a little bit of time.
Without - I have the luxury of not spending all my time doing what Jeff has to do to successfully execute on INDYCAR 2013 and the events at IMS over the year. I think that's what the board had in mind by asking me to come in and have that initial focus. Beyond that, we think sometime in the first half of the year, without an absolute deadline, we'll have a lot more clarity around the strategies for all the businesses going forward, and we'll know what that looks like when we're there.
It's more important that we get it right than that we are hasty, and I think that applies to the leadership of INDYCAR and all the businesses we're engaged in.
BELSKUS: Yeah, Formula One being on NBC Sports I do think will be a good development for the IndyCar Series. I agree with you it's going to provide some great lead-in for our shows, and NBC Sports will become the place to watch open-wheel racing in the United States of America. So yeah, that will be positive.
The gaps in our schedule, you know, it's not a good - the gaps aren't good, and going forward, '14, '15, we want to tighten the schedule up and have a better cadence to it.
But if we can - if something presents, if an opportunity presents itself to fill in the gaps, we'll evaluate it, and if we can take advantage of it we will. But at this point the schedule is set, and so we're going with what's been set.
Q: Mark, Jeff answered this question over the summer about the series being for sale. Is there any chance that somebody could make you an offer - do you foresee always staying together?
MILES: Yes, the series is not for sale. The board is very clear about that. For the reasons strategically that I already mentioned, we just think it's so important that the most powerful event on the series and the series itself are marketed and promoted and scheduled and run together.
For us at this juncture certainly it is not a question of money. We're prepared to make investments, and I don't see that changing.
Q: Do you envision having a racing guy hired?
BELSKUS: You know, we continue to evaluate our management team, and we've got a good team in place, but having said that, it's an ongoing conversation in terms of how we fine-tune in and how we get the right skill set. I'm also going to talk a little bit about the impact of the strategy process we're going through is - to some extent going to dictate our structure, dictate our needs in terms of what our management team looks like.
So it's an ongoing evaluation for us.
Q: By that same token, with Mark's connections overseas, is there a future of INDYCAR going to Europe?
BELSKUS: I suppose anything is possible. But yeah, I mean, he brings wonderful contacts, wonderful experience in that regard, and we want to leverage that. So that's - absolutely, if opportunities present themselves we'll evaluate them and move ahead.
MILES: I just want to elaborate, from my perspective as a newcomer, and it's the kind of thing we'll think through as we think about strategy, I agree with what Jeff just said, but I think we want to do that in some strategic context. I've seen leagues just chase a buck and go where they can get it around the world, and there's money out there. It doesn't necessarily make marketing sense or promotional sense or brand sense. So we've to have the discipline to think strategically about opportunities, and they're certainly there. That doesn't mean that we think there are walls around the United States geographically, but certainly over time as I imagine the possibility of international expansion, it needs to make some sense, and there are lots of ways to approach that.
I think we'll be disciplined about that.
THE MODERATOR: We thank you very much for everybody that tuned in on our live stream, and thanks to everybody for coming this morning.
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