Speaker 1: This is off track.
Hello and welcome everybody to Off Track with Hinch
and Rossi on a Tuesday.
Uh, very, very rare occurrence
to have us both here on a Tuesday, but it's for good reason.
Uh, and that's 'cause we have a very special guest as our,
uh, guest on the show today.
Please welcome Mark Miles to the show.
Mark, thanks so much for joining us.
Speaker 2: Thanks. It's, uh, I think it's been a few years,
since we did this, so it's, it's a pleasure.
We got a lot to talk about. Yeah.
Speaker 3: Quite surprising, quite weak, right?
Surprising that, uh,
that a couple years on this thing still
exists, if I'm honest with you.
Um, so, uh, happy, happy to be here to have you.
Um, but yeah, as James said, big week, why don't you walk us
through, uh, what you've been up to.
Speaker 2: Well, in, in a way, you know, these things end up being
almost an climactic, which is it,
it was such an important event that, that it's a little bit
of an oxymoron to say that, but I say it
because this has been a conversation really for months.
And to my recollection, probably all
of us involved have slightly different skews.
But, um, I remember Eric Shanks saying to me a couple times,
right when we were beginning the broadcast relationship,
Hey, you know, the Murdoch companies have a
pretty hefty balance sheet.
They got a lot of cash.
There's a lot of that cash
because they're, they wanna be opportunistic at
looking at acquisitions.
To be frank, it didn't cross my mind that
that might be a conversation starter for us.
And then much more recently, several weeks ago, uh,
it became that what about would you guys be open to?
And really, uh, in a sense it was kind of out of the blue.
'cause I, it's been said Roger,
and we were not looking for investors.
Roger doesn't need capital.
And, um, you know, so it just, it just wasn't top of mind.
But very quickly it became, well,
this is an interesting idea, not
because of the, the sale of the stock,
which I can explain if you guys care about it more
technically, but
because they're just such a great strategic partner.
So for us it was important that, um, well,
I should back up in, in short order.
They gained the trust of Roger Penske
and all of us as great partners for reasons
that you guys are nodding your heads
or pretty obvious, right?
They Right. Always under promised Overdelivered,
they took initiative and didn't even ask like those spots
that we all saw kind of at the end of football season.
They just did 'em and they were fabulous
and they spent a lot of money on things that, um,
they didn't have to do, but sort of beginning
to build this bridge of trust
that they really care about the property.
Everybody knew that Eric Shanks cares about, uh, racing in,
in IndyCar, in are Agile and,
and put money behind their thoughts to kind of help us grow,
but also in retrospect to show us that they take initiative
and they can make an impact.
So in short order, the benefits of the strategy
to us beca were, were obvious.
It didn't take a long conversation to work out kind
of the economics of the pricing of the stock,
which was Penske Corp stock sold to, uh, to, to Fox.
Um, and then there's the separate piece,
which frankly took the longest
because one thing is to bring in a minority investor
that has equity in the company.
Another thing is how do you handle the media rights?
And you, you'll probably wanna talk about that more,
but that's always been a separate conversation related,
but separate conversation
and a separate media licensing agreement.
And that was the thing that, uh, sort of took the longest
to work through and finalize. Before we
Speaker 3: Get going, I just wanna know
before we get into, into the details of, of that
and then also what it means for the future of the sport.
Like, you, you, you, right off the bat it was RP and,
and you and,
and all of Penske Corp wasn't really interested in a partner
they weren't interested in, in a sale per se.
And then these conversations started happening.
Was there a catalyst that that kind of made that door open?
Or, or how did that come to be something that, oh, we're not
that interested to, oh, this is what we'd love to do and,
and we're gonna do going forward?
Speaker 2: It was really simple. We, it wasn't
that we were not interested in their,
in the conversation they began.
It was that we just weren't generally looking at all to,
to sell equity in the company.
The catalyst was Eric Shank saying, Hey, we'd like to talk
to you about investing in the company,
and you probably understand their rationale,
but it, it was easy for them to articulate
and very quickly we were like, that's an interesting idea.
So there wasn't any other cause Right.
It wasn't that he had to have the money at Penske Corp
or Capital, um,
we just thought they'd make outstanding partners.
Speaker 4: Mark, I have $23 set aside for investments.
It's earmarked. I need a couple days to free it up.
Can I get in on this?
Speaker 2: Well, you won't be able to get registered stock.
You'd have to buy it through me. Okay.
I'm willing to have a little side hustle here and, uh,
but I, I don't think the, the, uh,
the entry price is 23 bucks, mate.
Speaker 4: Okay. It's gonna take a couple days for me
to move some things around to get that 23 freed up,
but we'll talk, we'll talk,
Speaker 2: Okay. Fair.
Speaker 1: Yeah. We'll, we'll make sure you guys get,
get connected offline.
Um, so, so Mark, so you kind of mentioned it,
but you said that this was actually
an acquisition into Penske Corp or No,
Speaker 2: No, I didn't, I didn't mean to say that a hundred percent
of the stock of the company, Penske Entertainment Company,
had been owned by Penske Corp.
Speaker 1: Right, okay. Speaker 2: So, um, they bought a third
of the stock in Penske Corp.
I'm sorry, in Penske Entertainment from Penske
Speaker 1: Corp.
Right, okay. And Penske Entertainment includes both the
series and the Speedway.
Yeah. And IMSP.
Speaker 2: Exactly. Speaker 1: Right, right, right.
So do you know what, because
because it had been so kind of public, you know, it,
there had been articles written about how
IndyCar wasn't looking for an investment,
they weren't looking for partners.
Do you know, from from Fox
and from Eric Shanks side, what kind of motivated him
to even broach the subject?
I mean, yeah, fine, he said they had some, you know,
some capital they were looking at, you know,
different acquisition opportunities,
but it had been very publicly discussed
that this was not really something
IndyCar was interested in.
So do you know what kind of made him
bring up the idea in the first place?
Speaker 2: No, I don't know that there was, if there was one kind
of precipitating factor for, for Eric
or Fox, I, you know, they'd spent months getting to know us.
Um, I guess it's good news, bad news.
They clearly think there's a big upside
and they want, They wanna be part of
that ride as an investor.
So that, that's that.
And I think that they trust us as we trust them
and they think they can add some real value as these kind
of strategic partners that bring ideas, uh,
and initiatives for growth to the table.
So, you know, I I do remember when it first came up,
it was kinda sheepish, .
'cause I'm sure they, they didn't in any way wanna somehow
risk offense or, uh,
or any unintended consequence from floating the idea.
And it was very casual.
You know, what if,
is there any chance you guys would be open to, so again,
there was no lightning bolt for anybody.
It, it was the evolution
and the development of the relationship and the trust
and the, our admiration for them
and them seeing an opportunity
and then then having, taking the initiative to say, what if?
And then the stock piece of that happened quickly,
as I said, took a little longer
to work out the media license.
Speaker 3: So as, as you just said, like Fox obviously has a,
has a clear understanding of of the upside.
Um, they believe in the sport, they believe in,
in the series and, and all those that are involved
in getting it to this point.
And in the, in the media release, it was announced kind of
all of the things that immediately, like off the bat,
you know, they're gonna, they're gonna start planning on
doing, which was, I'm just reading it,
but you know, it says generate industry leading events,
hyper engaged digital media
and content strategy, new opportunities for the athletes
to take center stage across different, um, entertainment
and sports properties and, and all this sort of thing.
Is that really the, the, the main
excitement from your, you guys obviously having a partner
of the magnitude of Fox Sports is,
is in an iconic brand such as that is, is great,
but is it really the excitement of where they can propel
the series and the races
and the drivers in ways
that maybe previously couldn't have been done for,
for either financial reasons or personnel reasons
or, or what have you?
Just, just general restrictions.
Is that what you're, you guys are most looking forward
to is, is just the enhanced engagement
that they're gonna bring to the table for the
Speaker 2: Sport?
It's that, but but think of it in broad terms, Alex.
I mean, I think it's telling that this was the first thing
that, how was this announcement made?
It was, it was made
through a report in the Wall Street Journal.
Sure. Try to think back
to the last time the Wall Street Journal was covering us.
So I think that's indicative of the reach and
and I'm sure their management didn't call up the editor
or the writer at the journal
and say, Hey, you know, write this.
But the access was there
and I, I just, it's, it's not a huge thing,
but I think it's kind of indicative of the reach
in the media world that, uh, that, that they have.
Um, and,
and you know, like the Barto deal
that they announced not very long ago, that's,
it's a different kind of example
where they've got a relationship now that, um,
hopefully, uh, with their entree to the Barto people
will help get them thinking about us more often and,
and reaching other audiences in,
in different clever, you know, appealing ways.
So I just think their, their general reach, uh,
is a huge asset.
So I guess I, I would, I would also say that
we just think they're very nimble and creative.
So we didn't say, okay, X amount
of money is coming in for the stock.
We're gonna take y amount of it and do these 10 things.
We've learned in our relationship with them that they're,
they're, they're creative, right?
They're clever. They're thinking about how
to project a brand, how to get in front of other audiences.
So, so it's beyond,
with all due respect the talent in the broadcast,
it's all the other ways they can help
and they do in addition
to the unbelievable talent on the broadcast. Yeah,
Speaker 3: Yeah, yeah.
It's just you back, just worry. Keep digging there, Kyle.
Don't keep digging. Don't worry James.
Just like drivers, you are also replaceable.
Very, very disposable. Yes. I just
Speaker 4: Wanna be clear, he was talking about Townsend,
he was saying that that's the,
that's the real talent in the booth.
Speaker 2: Yeah, so, so, uh, they, they, it was just quick
that, um, this could be a great fit.
We know we, we will get along.
We know they will bring what I would call strategic value,
not only because of the way they think,
but the world they operate in, the worlds they operate in,
which is a great compliment to, to us,
I think our greatest strength other than expertise in
Motorsport is operations.
And, um, so this is just a great way to not only round
that out, but I think, uh, blow it up in, in a,
hopefully in a really significant way.
Speaker 1: So then, so then what are the, the, the easiest ways
to say, what are the next steps?
Right? This happens, it gets
announced, everybody gets excited.
Obviously we're three races from the end of our season,
so no one's expecting any big changes
or monumental shifts in the next four weeks.
But what is the process from IndyCar side, from Fox's side,
the way you guys work together in establishing, okay,
how do we start tackling the, the issues that we have
or the, the things, the goals that we're going
after? Yeah, it,
Speaker 2: It isn't a, uh, firmly prescribed process,
but today, um,
a couple senior people at Fox
and a couple senior people at Penske Entertainment,
not long from now, we'll,
we'll have a conversation about ideas or,
or categories of ideas.
Later this week, senior people, um,
will have senior people from Penske Entertainment,
we'll meet as a group and start generating our ideas
and our priorities, and then we just pull 'em together.
And whether that means in a week or two
or at the end of the season, they'll be, uh, a, uh,
a kumbaya meeting.
That's a strategy session with everybody or not.
I don't know. My guess is we won't do it that way
because neither one of us likes waiting.
It, it'll be, there's an idea.
Let's, you know, why don't we do it?
So, but you,
I think Alex already read some of the categories.
We think the, you know, we've been talking about this
for a while, but I think we've got a great ally in helping
execute the idea of having our events in places
that will lift the sport
and putting 'em forward in a way
that will make a difference.
So, um, we had obviously already announced, uh,
Arlington all and with great partners
and that sort of emblematic of the openness to dealing
with big franchises,
big organizations in the media and sports.
And by the way, you'll recall, they helped us push
that right out of the box with, uh,
NFL football they were covering in Arlington, right?
Then when that announcement was made, um, you know, um,
they, they liked the Mexico idea.
It's not, uh, that that's their principle market
and they only have US media rights they don't have in other
countries, but it's gonna be a big, uh, I think,
you know, kind of tent pole event.
And it'll be, I believe it'll be so
strong in Mexico that'll, you know,
the tsunami will flow into, uh, north America in a way
that's helpful to them, including on Fox broadcast in the us
We're working on another one that is clearly in that kind
of, um, category of young and different
and hot and, um, can you, can you break some
Speaker 4: News today? What, what's, uh,
Speaker 2: No.
Well these guys, these these guys have heard conversations
about places like Denver.
So that is not a news flash,
but it, it, I think you could say Denver's the kind
of city that we're talking about.
Don't, I did not just tell you that we'll work on Denver,
but it's an example of a market we're not in
that we think is young and aggressive
and kinda aspirational for a lot of people. So,
Speaker 3: So do you imagine, or are you foreshadowing
that this relationship with Fox is gonna kind
of give you some horsepower
that you maybe didn't have going
into some of these new markets?
Maybe if there was a little bit of opposition here
or there from various parties, is this now kind of the,
the extra leg that you need?
It's cash in order to, to, to move the needle in,
in the direction of a, of a yes vote
for, for these new markets.
Speaker 2: And I don't think it's so much a vote.
And James said cache, it can be lots of things, right?
If we're trying to get a promoter so
that we're not necessarily the promoter
of all the new events that can't hurt if it's entree.
So, you know, there can't be a major league franchise
where they don't know the ownership
and the management in the, in this country.
So door opening for partnerships
and that, that could lead to races.
Um, and then Ultimate and,
and the reason I think all
that has some clout is we already can show
that when we're doing something like that, they're gonna be
behind it and make it a bigger deal.
So I I I, I just think there, uh, there's a lot
of ways they can play in making that more achievable faster.
Speaker 1: Now you mentioned it earlier and, and said we'd get to it,
but it is an interesting question as we are in year one,
you know, having finished year one of the media rights deal
with Fox, now they're a part owner of the whole program.
What does that mean long term for the media rights situation
with IndyCar and then the TV provider and
Speaker 4: Maybe specifically for James, like
Speaker 1: and can I get a, a contract extension or,
Speaker 2: You know, I'm gonna have to, Hey Elias, can I,
can you reread the contract
and see if it says anything about Hinch Cliff?
Speaker 1: Was I in there specifically?
Because I did ask, I did ask for that
to be just a little footnote, like a,
like an addendum at the end,
little late, you know, appendix scenario.
Speaker 2: Sure. You know, we started down that path
and then it was, is this gonna do any more harm than good?
And we just thought, let's, let's just be silent. fair.
Speaker 1: Fair. Speaker 2: So they didn't buy,
they don't own the media rights, right?
Ownership to me, right, is, is doesn't have a term limit,
at least in, in the case of owning the stock, it doesn't,
they had a license for a few years,
which you guys are all keenly aware of and part of, um,
and we extended the num the term by a few years.
Um, I my own, you can't give specifics on those numbers.
I'm not going to, but I would just tell you, you know,
there are 20 year deals in rights in, in,
in the us it's not that kinda long term, right?
Uh, so they remain our partner,
they're gonna pay us a little bit more
during the extended years.
That's a good thing. And, um,
and bring some other value to the table in the broadcast.
Um, and then when the license is reaching its term,
we are absolutely free to go to the market
and see what's in the market.
Right? And, um,
and frankly, it'll be interesting, right?
I I think we kinda got the best of both worlds.
'cause if three other, you know, apple and NBC wants it back
and name anybody else you want, want it, um,
that they're gonna have every chance to get it.
And Fox will benefit if
or when it went to somebody else for, for better
consideration because they,
they have a financial interest in the ownership
of the company, but they do not own the media rights.
And so, um, yeah, I think I,
again, that was important to us.
We were not looking to kind of mortgage our media rights
and in any way cap the value.
Because to me, you guys know, I've felt this
for a long time, that the one, one of the big things
for IndyCar is we don't have the kind of TV revenues
that allow us to act like, you know, other major leagues.
I think we outperform our weight class in a lot
of other ways, given the, the dearth of, uh,
of TV revenue.
That's not to say there isn't any.
And there is, and it's net and we got a great TV partner,
but it isn't a billion dollars a year.
And I'm not saying it will be in, in two years
or five years, but, um,
we wouldn't wanna sell stock in the company
and at the same time kind of cap our financial prospects
for the value future values of our media rights.
And this deal didn't do that.
So I, I really think in that way, it's,
it's the best of all worlds.
You know, some people have looked at it more defensively,
and it's a fair point of view.
If anybody ever worried if, if Fox was gonna come in hard
in 2025 and be a fabulous promotional partner,
and then, you know, in 26 it was less in 27, it was less,
um, I don't, this this ought to be looked at as, uh,
real insurance that,
that they're not gonna lose interest in in any way.
And they have an interest in the
increasing value of our rights. So
Speaker 3: That leads me to kind of one of my final questions, and
before I get to the question,
it kind of starts with a statement.
Um, this must a be incredibly rewarding for
yourself and, and, and Roger and his whole team, right?
To have a a partner have this amount
of belief in the sport.
And it's a testament to
what you guys have done over the five years,
not even five years yet to get the sport to where it is,
to have the, the foreseen value that not only exists,
but but will continue to grow and exist in the future.
Now that there's a partner involved, now that it's Fox,
does it add or take away some of the pressure of, you know,
there's, there's so much talk all
after every weekend, right?
About a TV number being this, or a TV number being that
or all this sort of thing.
Does it, does it, does it create a situation
where you feel like you have to continue delivering?
Or do you feel like a little bit of the burden is kind
of now shared across all of you and,
and you're gonna work to make it, to make it grow together?
Like, like how does that kind of fall?
Speaker 2: It's an interesting question.
I kind of don't think that way.
I, I can speak for myself in that way, in that regard.
I mean, I, I remember verses right and A, B, C,
and mm-hmm you never knew where the hell
to find Indy car racing.
And then it took a few years,
but we got an NBC deal done where we had NBC and,
and Peacock and, and, uh, USA
or whichever cable it, it, it happened
to be on a given race weekend.
And they were great partners, uh, great relationships
with them and, and, uh, years later, and now we're here.
So I, I know you, I don't see
how you do these things in a year or two.
We, we are rebuilding
and building, uh, an American sports franchise, uh,
which I also think has an international upside.
It's a whole nother matter. But, um, so I I, um,
I've never had any doubt that the deal with Fox will produce
important increases in our TV audiences, which is
kind of foundational
to TV rights achievement sometime in the future.
So, and it's true.
I mean, people can write about whatever they think about the
numbers at the end of this year.
I, you know, I'll make the bet with Tim, I'll get,
he can get his 25, is it cents
or bucks? I can't remember. 20.
Speaker 4: It was $23. Yeah, we can pop it to 25 if James
Speaker 2: Can lend some, well, let's go 25.
We'll make it US dollars.
I don't want to argument about which kind of dollars anyway.
We're gonna have a 40% increase year over year
in our average television last year versus this year.
I understand how we get it. It, right?
It was, it's kind of a slam dunk
because everything's on network and we don't have a two
or three races solely on Peacock or on USA or maybe CNBC.
It's, it's Fox. But that's a big deal.
And those are real eyeballs
and it increases our value next year.
Talking with Eric, we've all agreed now we gotta start
to move the average as it as that first year
of all network cycles through.
So we gotta do things like Arlington or Mexico
or other, I hope, creative things and more digital and, and,
and, and the like.
Um, so I just don't think of it as, you know, oh my God,
this week was 750,000 instead of 850.
Um, we're building it
and, um, we wanna make good, steady progress.
So does Fox. And that will benefit the team owners,
the drivers and everybody as the series goes up over time.
Speaker 1: Well, this has all been great and,
and Mark, we can't thank you enough
for taking the time to sit with us.
We know you haven't had a lot
of interviews since this news broke, so, uh, honored, uh,
that, uh, that you
decided to take some time and chat with us.
'cause again, this is going right to the core fan base.
These are the people that are
passionate about IndyCar racing.
Um, and on that note, there's one,
one thing I just wanna end with,
it's kind of pivoting a little bit.
I don't know if you can or not,
but there's a lot of talk right now about next year,
and obviously this has been taking a lot of your time
and focus and energy.
Is there any news that you can share about Calendar for 26
and where we might be on that?
Speaker 2: No. Speaker 4: Okay. It, it,
Speaker 2: Uh, you, you know about Arlington, you know, the date,
you know, one or more things that we continue to work on.
Um, but no, I think the next step will be to, to probably,
uh, there may be two steps about two different events,
but at least by the second one,
we'll put the whole calendar out and it'll all become clear.
But we gotta get all the pieces nailed down,
be before we go public.
But it's gonna be a good calendar.
There'll be some novel things in it
that we think are exciting and, uh, um,
we are eager to get it out Tuesday
Speaker 4: Night races.
Is that a thing? ? Let's go, let's go.
Speaker 2: That sounds like a Tim idea.
Speaker 4: You guys can, you just, I'm still good to like bum
around racetracks, right?
This doesn't change anything.
You or you pay, you pay. Ah, damn. We'll
see Speaker 2: .
Anyway, listen, I appreciate you guys having me.
I love what you do in every way around the sport.
And I'm gen I think, you know, I mean that.
And, uh, so it's a pleasure.
Speaker 1: Likewise, buddy. Thank you so much.
We will see you out in Portland.
Speaker 2: All right. Take care. Safe travel. Have a
Speaker 4: Good one.
See you.
Speaker 1: This has been off track with Hinch and Rossi.
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