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IndyCar racing on road to recovery
After 13 years of being unfavorably compared to other racing organizations, the Indy Racing League has shown during the current economic crisis that it must be doing something right.

Although it is not immune from the financial travails affecting businesses and individuals worldwide, the IRL has displayed surprising resilience at a time when much of the racing world is being forced to make difficult and, in human terms, often painful choices. In NASCAR, where annual budgets have quadrupled in the past decade, several teams have either folded or merged, and an estimated 1,200 people have been laid off since the end of the 2008 season.

The IndyCar Series has endured no such dire cutbacks, and heading into the 93rd Indianapolis 500 on Sunday, there is ample reason to believe the sport is on the road to financial recovery.

"We think the stability we have right now will allow us to weather the economy over the next couple of years," said Tony George, IRL founder and Indianapolis Motor Speedway CEO. "Our teams can run the full season from somewhere between $5 million and $8 million. There are those that have the eight and some that don't have the five, but I think we're providing pretty good value, especially when you look at other series like Formula One, which is trying to cut back to $40 million."

The tailwind picked up by last year's reunification of open-wheel racing into one series was stifled somewhat by the recession, but the byproducts of a unified sport -- from fuller fields to a diversified schedule to a strong core of marketable young stars -- remain in place.

The IRL is seeking out new markets in Brazil and China, with an eye toward expanding its schedule from the current 17 races to about 20. Emerging talents such as Graham Rahal, 20, Marco Andretti, 22, and Danica Patrick, 27, are the face of the sport going forward. Meanwhile, the search goes on for a title sponsor. A potential long-term deal fell through at the last minute.

"We're having conversations with a lot of companies," said Terry Angstadt, president of the IRL's commercial division. "First and foremost now is layering in more sponsors to make us more stable. We've had some success in that area, but we don't have the big one yet." Cost containment

NASCAR has been hit hard by the decline of the U.S. automakers. Teams are dependent on the financial and technical support of Detroit's Big Three, and that revenue stream has slowed to a trickle. IRL teams, on the other hand, lease their engines from Honda at a cost of about $1 million for a full season. Roger Penske, the dean of IndyCar Series owners who also has a team in NASCAR, credits the IRL for keeping a lid on costs.

"Obviously, there's pressure on sponsors. We all have that," said Penske, who will go for his 15th Indy win Sunday with driver Helio Castroneves starting from the pole.

"We've got good teams out here. Just look at the equipment, lots of new drivers. I'm thrilled to see that. "I would say an average team today can get in this to run the season in the $4 (million) to $5 million range. To run up front in NASCAR is probably $20 (million)."

One prominent team -- Rahal Letterman Racing, co-owned by 1986 Indy champion Bobby Rahal and talk-show host David Letterman -- was unable to find sponsorship to run a full season. They do have a car in the Indy 500, which they won five years ago with driver Buddy Rice. General manager Scott Roembke expects the team's troubles to be short-lived.

"We're talking to corporations that want to talk to us about the future," he said. "Things are starting to calm down a little in the economic market, and we're getting some forward traction in putting together a program."

The IRL is in the first year of a 10-year, $67 million deal with little-known cable network Versus, which has committed to 130 hours of programming this season with extended pre- and post-race shows. ESPN/ABC retains the rights to five of the 17 races on the schedule, including the Indianapolis 500.

Versus is available in slightly more than 75 million homes, about 25 percent fewer than ESPN, and ratings thus far have been minuscule. But IRL Vice President John Griffin, who was with NASCAR in the mid-1990s when its partnership with ESPN helped produce a boom in popularity for both, sees a similar opportunity for Versus and the IRL.

"At that time, ESPN had a lot of taped programming, and NASCAR was something it could take live," he said. "So I think the comparisons are very similar. (The IRL) needed to find a partner where we were going to be one of a select group of live options on the network (Versus also is the primary outlet for the NHL). It was critical to us to land a partner that would treat us as one of its priorities."

C&R Racing is a parts supplier to teams in several racing series and has offices in Indianapolis and in NASCAR's backyard of Mooresville, N.C. Its founder and president, Chris Paulsen, said the company is uniquely positioned to monitor the economic health of the racing organizations, and "right now IndyCar is probably doing better than any of them." Paulsen said he gets a half-dozen job applications a day in North Carolina and has seen his NASCAR business drop off dramatically.

"Our NASCAR sales are down 35 to 40 percent while our IndyCar business is holding its own," he said. "NASCAR is still a very big deal, but it has taken some big licks. It clearly had farther to fall than IndyCar did, but you can see the panic setting in." There's no panic so far in the IRL, where the mood could best be described as concern with a strong dose of cautious optimism.

"Do I wish we weren't going through an economic meltdown? Of course I do," Angstadt said. "But you can't for a moment think, 'Oh, poor us.' You can't let negative thinking dominate one minute of your day." More at The Indianapolis Star
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