Indy Racing League Media Conference

Topics:  Indy Racing League

Terry Angstadt
Marc Fein
Tony George
Scott Guglielmino
Charlie Morgan
August 7, 2008

THE MODERATOR: Good afternoon, everyone. Thank you for joining us for today's special Indy Racing League teleconference. We're pleased to have several guests with us today to discuss the 2009 IndyCar Series media partnerships that was announced earlier today.
Joining us are Tony George, the founder and chief executive officer of the Indy Racing League; Marc Fein, executive vice president of programming, production and business operations for Versus; and Scott Guglielmino, vice president of programming and acquisitions for ESPN.
Good afternoon, gentlemen. Thank you all for joining us.
Earlier this afternoon the Indy Racing League announced multi-year partnerships with ABC and Versus that includes ABC continuing to air the Indianapolis 500 and four additional IndyCar Series races each year, with the remainder of the races moving to Versus, a growing cable outlet that is also home to the NHL and the Tour de France, among others.
Tony, let's start with you. As CEO of both the Indy Racing League and the Indianapolis Motor Speedway, can you share with us your reaction to the continuing coverage of the Indianapolis 500 on ABC and the new opportunities presented by Versus.
TONY GEORGE: Well, sure. Appreciate everyone for joining the teleconference today that will outline our media partnerships going forward beginning in 2009. I want to thank Marc and Scott and everyone at their organizations for getting us here today and working with my team here in Indianapolis, who has done an outstanding job.
We're very excited to be able to continue our 44-year relationship that we've had with ABC Sports. It's been one of the most enduring relationships in all of television sports. We're very proud of that.
I had as a priority to encourage our team here at Indianapolis to really focus on doing everything in our power to maximize the opportunities that we have with the new unified series, with the centennial year celebration that kicks off next year. So we went about in a very methodical way I think organizing ourselves and sort of setting out our priorities.
First of all, we wanted to understand what was most important to our constituents. That was very pretty consistent with what our thoughts and feelings were. It was good to get that validation.
We also respect and honor our existing relationships with our current broadcast partners, ABC and ESPN. We wanted to do everything that we knew to make sure that we were serving the needs of everyone to the best of our abilities.
We consulted with them, got their concurrence that this was an important opportunity for us. And what we've come up with I think is really a very exciting opportunity. We were able to go out and engage the interest of most every potential broadcast media partner out there. What we found was that there was a lot of genuine interest in our property. There was a lot of excitement and buzz about the opportunities with the unification and with the centennial year coming up. There was even some interest from some entities that most wouldn't be familiar with.
Suffice it to say that we set out about trying to secure the best media partnership going forward that will allow us to grow this property. Again, having the opportunity to continue with ABC, but more I think that adds to the excitement is the fact that we're bringing in a new partner into this mix going forward that will give us the opportunity to expand our coverage, create some new programming that we haven't really seen in the past, but really to help us become a focal point of their new and growing platform. We're excited to be a part of it and to make this announcement.
THE MODERATOR: Scott, next season will mark the 45th time ABC will air the Indianapolis 500. Tell us how important it was to ABC and ESPN to keep that race on the network and continue one of the longest relationships in sports broadcasting.
SCOTT GUGLIELMINO: Obviously it was something we were focused on. As Tony mentioned, the partnership throughout the years has been tremendous. It was something that from the onset of the discussions that was a focus of ours. Our ability to land on an agreement that includes the 500 is something we're really, really happy about. Indianapolis Motor Speedway, the Indy 500, they're just totally unique and very special. We are very excited about continuing that relationship.
THE MODERATOR: Marc, this is obviously an exciting day for the IndyCar Series and Versus. Tell us about what it means to you and your network to add Indy Racing League programing to your lineup.
MARC FEIN: Obviously it means a lot. It's a great day for us here. We're very excited. We join two organizations that have a lot of momentum going, a lot of great things can happen over the long haul. Certainly the IRL, with the unification, with all the stars they have, the attendance, the ratings, for us with the new properties we continuously add, with our ratings and distribution growth, it really means a lot.
Our game plan of adding properties that we can really embrace and put our arms around and super serve those passionate fan bases, certainly the IRL fits in that perfectly. We were very excited to be able to get this deal done with them and look forward to great things over the next 10 years.
THE MODERATOR: I'd like to mention we have two other Indy Racing League executives on the call who are available to respond and offer their insight. Terry Angstadt, president of the league's commercial division, and Charlie Morgan, president and COO of IMS Productions, have both played integral roles in executing these partnerships.
With that being said, let's go ahead and open it up for questions for our guests.

Q. Scott, did ESPN make an attempt to contract for all the IndyCar Series races? If so, why not?
SCOTT GUGLIELMINO: I don't want to get -- I don't think it's appropriate or beneficial to get into the specifics of the discussions that occurred. Suffice it to say, I don't think there's a magic number of races that we were looking to land on. Clearly we focused on the 500 throughout the discussions. That's something we focused on. Ultimately we landed on the five races that we did.
Obviously we need to -- we're going to work with IndyCar for 2009 to figure out exactly what the other four races will be and where they'll be scheduled. It's something that we're looking to hopefully have those races fall around the Indy 500 so that we can, from a promotional perspective, use the massive audience that the 500 draws to help us.

Q. Tony, this certainly looks like it's good for the core fan, which will get additional programming. How does this help a casual fan that might typically drop by ESPN because of the brand name and also in terms of the sponsors that recognize ESPN as a brand - no disrespect to Versus?
TONY GEORGE: I don't know if I'm the best one to answer the question. I'm not sure that there is, you know, a good answer for it. I'm not sure that casual fans really drop by just to tune in to see what's going on.
I think we're looking to grow our property, and the best way to do that is to get more programming out there across more platforms. And certainly Versus offers us a great opportunity.
We still feel like our sport is of note and newsworthy. In as much, you know, there will be coverage of the IndyCar Series and its stars, its racing events on ESPN SportsCenter and other programming that ESPN has. I don't think we're going to be totally devoid of a presence on ESPN.
CHARLIE MORGAN: I'll add to that a couple of things.
One, I think we felt the balance of a well-known broadcaster like ABC, widely distributed, traditional relationship, was critical to the mix to maintain just what you're suggesting: that we don't fall out of anybody's mind in just the general public, or as you said maybe the more casual fan. Having that presence in a traditional venue like that is very important. That's why that was critical to us to have that in the mix.
We also think that the general viewing -- I think the behaviors of people watching television have become much different than they were 10 years ago, and people find programs that they're interested in, and they seek them out wherever they may be located. As we look at the ratings that we've had just this year, in many cases, even with terrific programming on either sides of us as strong as SportsCenter, the ratings for the race itself was higher, which indicates to us we weren't just riding the tide of lead-in, per se, but that fans specifically seek this product and tune it in whether it was on ESPN-2, ESPN, or ABC. We candidly believe that will continue to happen.

Q. Marc, is Versus just available on Comcast? What will you do to raise awareness outside of your actual broadcast?
MARC FEIN: We are actually in 74 million homes and are pretty much available everywhere in the country. In terms of people being able to access us, that's really not much of an issue. Certainly we always look to grow that distribution. The last few years alone, we've grown our distribution by 12 million homes and want to continue obviously to drive that home.
But the key point of information is that between our cable distributors, our satellite distributors, telcos, between everyone, we are available everywhere. If someone wants to get us, you know, they can get us.

Q. What does Versus do to promote this new property, either this or the NHL? What do you do to get the word out and draw fans in?
MARC FEIN: One of the key elements to obviously the deal is being able to go out and promote and market it and embrace it like we've done, like with the NHL and some of our other properties. Now that the deal is done, I think the fun part is going to be sitting down with our marketing team, the Indy team, certainly beyond just our own air, is to come up with a pretty robust marketing plan off our air, TV, radio, print, Internet, et cetera, to really promote this and get the word out. And certainly with the stars of IndyCar racing, we want to at that point into them, as well, to build the personalities more.
I think a key point to this is just not the actual off-air promotion we're going to do, but by expanding the windows for the events, being able to do more prerace and post race, the day before, qualifying preview shows, we're going to get to know the drivers more, we're going to be able to build their personalities. They're going to be out there, you know, talking about, whether it's on ABC or Versus, where you can find the product. So I think it all kind of works hand in hand. We are really going to embrace this and push it like we've done with our other properties.

Q. Obviously, there's no shame in this, but there is certainly less promotion required to make people aware of ESPN than of Versus. Was this the IRL's idea to look elsewhere or was this ESPN's idea to suggest they wanted a smaller calendar?
TONY GEORGE: You were fading in and out.
But you can never have enough promotion. You always need more. We try our level best to get all of our constituents to help us do that. And we feel like we do a good job, at least try to do a good job, helping promote, you know, their business and their products and their reasons for being involved with us.
I've certainly noticed since 1990, when I became president of the Indianapolis Motor Speedway, things change. Things had changed from when I was a young man growing up to today when I've tried to understand and come to grips with change.
This represents change. It's my feeling that this can represent all the good things that are represented by change. Again, we have the continuity of continuing our relationship with ABC, at the same time working with ESPN in the production of those events and welcoming a new partner that will help us continue to grow and that we will help them continue to grow.
You know, those are exciting prospects as far as I'm concerned. So I'm not sure I know what to say other than this whole thing represents an opportunity for us to promote and to be promoted. That's what we're going to do.
I think if we have a conversation five years from now, we'll probably find that the world has yet changed again. But this is the start of a new partnership that involves, you know, some of the old with some of the new and on balance represents an exciting opportunity for the IndyCar Series and the Indianapolis Motor Speedway.

Q. Is Versus paying a rights fee here or is it a revenue-sharing deal? How much of that was part of the discussions going into this?
MARC FEIN: I don't think any of us really want to get into too many details of the deal structure. Suffice it to say we think at the end of the day the IRL is certainly going to be compensated in a very fair way for their solid property. The way we obviously looked at the deal, too, as we went through it, it's made economic sense to us as well. Anyone from Indy can jump in there, as well. But, you know, we don't really get into too many details of that, other than we think obviously it was fair for both sides all the way around.
TONY GEORGE: Marc, I agree wholeheartedly with that. We're very happy with the deal and the way it's structured. Certainly the financial consideration was something that was important to us. We're very pleased with the way it turned out.

Q. You're not really answering the question. Is this a rights fee or not?
MARC FEIN: We at Versus don't discuss points and terms. I unfortunately can't answer that question.
CHARLIE MORGAN: And, likewise, as a result of the agreements that we have signed, we join Marc and Scott in agreeing that we won't divulge the specific terms of the contract.

Q. For the IRL officials, would you prefer to have the season opener at St. Petersburg on ESPN because it would give you better exposure? For the folks at Versus, would you prefer to have the season opener St. Petersburg on your network because you get to come out of the box immediately and show what you've got?
MARC FEIN: We want whatever's best for the league because I think ultimately ratings on ABC being up is good for us. I think that's a discussion that, you know, everyone will certainly have. But we don't have a burning desire to have it go one way or the other, other than what we all think is the best structure for the league basically to get the most eyeballs and to get the thing going.
TERRY ANGSTADT: I think from our perspective, I agree with a lot of what Marc has said. At the same time having that extra hour preview show the day before and an expanded broadcast window on day of, we think we can show some of the great backdrop, scenery, the lively nature of that venue possibly more effectively with expanding programming.
So, again, as we've talked to a great balance either way. May be able to showcase your community a bit more effectively with more programming.

Q. So you're leaning Versus at this point for the St. Pete race?
TERRY ANGSTADT: That will not be our decision. But we'll be working that out over the next couple of weeks.

Q. Marc and Charlie, how will you maybe during the next year try to grow the audience? We have the race here coming up this weekend. But Versus, in terms of penetration with Time Warner, maybe one in three homes gets it.
MARC FEIN: We're also available obviously on Direct TV and Dish, as well. You know, at the end of the day, there's a way for the viewers to get it. Certainly throughout the season, if there's markets where locally on the cable systems, we can work on penetration, this will be a great reason for us to get our team into those markets to explain why it's necessary to give Versus better penetration. Certainly we're going to make sure viewers know that the product's now on us and it's available any way they want to get it. Maybe, again, this is a way for our team to get into those markets and help get penetration.
CHARLIE MORGAN: Just adding to that, again, we haven't identified which races will air on which location. So, you know, at this point it's premature to even know whether that's a specific issue with the race you're talking about.
But in general, as I think we talked about on a previous question, I think one of the goals that all three of the organizations share is making sure everyone has access to the programming, awareness of the programming, and direct our fans to being able to find and access that in all the various ways it can be delivered.

Q. Charlie and Terry, what made Versus' presentation maybe rise above the other networks you were looking at?
TERRY ANGSTADT: One very memorable part of the meeting was a brand video that they played for us, and it absolutely was directly aligned with the IndyCar Series brand.
CHARLIE MORGAN: We could have made the video ourselves or wish we had.
TERRY ANGSTADT: Both being growth properties, both being focused on sport, competition, every good attribute that represents, there is outstanding brand alignment between the two organizations.
MARC FEIN: Here I thought it was just the fine cafeteria coffee we got you guys (laughter).
CHARLIE MORGAN: I would say we've also looked at the success model that Versus and the NHL have demonstrated in their short time together. As Marc indicates, their sort of approach of blowing it out, expanding the coverage, the promotion and marketing of the sports that they embrace, and to see the tangible and measurable results that that's produced in the way of viewership, was pretty exciting as we imagined those same sorts of the efforts being put against our sports.
MARC FEIN: Just to reiterate what everyone else is saying here, when you look at the Versus brand, raw, real, authentic, passionate following and fan bases, the way we cover the sport, give them more hours, embrace them, the way they cover them. I mean, on the flipside, you know, we walked out of there as well going, Boy, this would be a great property to have because it aligns so perfectly with who we are.

Q. Charlie and Terry, how much do you think with Versus having the Stanley Cup playoffs, having hockey on for 45 straight days, how is that going to help you in terms of promotion, not only for the beginning of the season, but especially for the month of May with qualifying and all of that?
CHARLIE MORGAN: Absolutely believe that the cross promotion will be outstanding. One of the things we looked at is what does an Indy racing fan or viewer, what's their awareness of Versus. If you look at the research, even before our sport has ever appeared once on that channel, it way out-indexes the average American for awareness and viewership. I think that's largely due to the kinds of programming they already have being appealing to the same kinds of people who are fans of Indy Racing and the NHL. And the playoffs leading into our season couldn't be a better platform to introduce our product to those viewers.

Q. Has there been any discussion with Canadian networks for broadcast rights?
CHARLIE MORGAN: The international distribution is certainly obviously a part of the deal. Together with Versus, we on the IndyCar Series will be determining the best way to do that.
We have not specifically -- to answer your question, we have not specifically identified which Canadian networks or distribution channels will be used for 2009. But very high on our initial action items is securing our international distribution partners and making sure, again, just as we're talking about domestically, that all of our fans are aware of where the programming will be available.

Q. Terry, how is Direct TV going to work into this? Potentially trying to draw the casual fan over to Versus so they can find it.
TERRY ANGSTADT: We've enjoyed not a long relationship, but a very good one so far with Direct TV. I don't know if you've seen their cross-channel promotion spot that is dedicated to IndyCar racing. They have stepped in and really hit the ground running.
We're very hopeful that this will continue in this new arena. Again, a little early to say. In fact, our contact, we were attempting to chat this morning on this, and is not available till Monday. But we think it will continue to be a very good relationship.

Q. The international distribution, in the past I believe ESPN International did all the distribution. As I read the press release today, I believe the races on ABC will be ESPN International distribution. Is there any chance that the Versus races would also go out that way or will it be a country-by-country deal?
CHARLIE MORGAN: I think there is a chance that could be a continuing relationship. Again, as I indicated previously, those rights and the decision on how we'll do the distribution we'll do in partnership with Marc and his organization at Versus. But I think all potential distribution methods are kind of currently on the table for us to examine what will be the most effective.
As Tony said, we started this process, one of our primary goals was giving our fans, both locally and worldwide, the most access to the most programming so that they could follow our sport. And that will certainly be the guiding principle on determining how we distribute internationally.

Q. Marc, can you give us a breakdown of subscribers between basic digital and satellite.
MARC FEIN: I cannot. I can do a follow-up with our PR person. I don't have that information. I'm not sure what we release in that area. Again, I know we are able to everyone everywhere.

Q. Scott, what will be the criterion for the four races?
SCOTT GUGLIELMINO: The criteria for the four races, again, I think Charlie might have hit on this earlier. We basically haven't really got into the detail there in terms of which races are going to go on which networks at this point.
There are a lot of things that go into it. I mean, certainly there's the discussion earlier about kicking off the season and which way makes the most sense for the property. There's also, from our perspective, obviously having the 500, that gives us a nice platform to promote from. That's certainly going to be something we're going to be looking at from our kind of centric spot.
I think there's also from our spot lead-ins and things like that, live lead-ins with similar demographics. Things like that all play into it for us. Again, I think it's something that we together have to discuss and figure out the best solution for.

Q. Tony, if the world is constantly changing, why a 10-year deal?
TONY GEORGE: Well, I think we're in the midst of a 45-year deal with ABC that has overtime reviewed. It doesn't seem prudent from either one of our standpoints to enter into a three-year deal. I mean, it takes some time. For that portion of our partnership, you know, 10 years is not that long. I think also Versus is a wholly owned subsidiary of Comcast. It's a leader in technologies. Those types of things are very appealing to us. We think it's going to put us on the leading edge of those technologies as they develop.

Q. Terry, when Tony mentioned constituents, how were the fans consulted?
TERRY ANGSTADT: Well, you know, it's interesting because our fans are not shy about emailing all of us personally.
TONY GEORGE: Unfortunately, they all figure out my email address.
TERRY ANGSTADT: Tony's in particular, which then all gets forward to the rest of us (laughter).
Our fans are very vocal. We absolutely do appreciate the passion our fans show. And one of the things they are not shy about voicing their opinion on is when occasionally we will have a challenge, if we'll either come in late or have to leave early, whatever those challenges might be. So we think we know that not only are owners, drivers, fans, venues, just generally speaking to increased programming with a consistent message from all of those groups. So the ability to learn the personalities of Tony Kanaan and Scott Dixon and Dan Wheldon, deeper than we do now, and to be able to get to know a St. Petersburg more, all of the enhancements that just more exposure, more programming can bring, is important.
So we know that our current fans and hopefully future fans will appreciate the ability to just interact more with our sport.
CHARLIE MORGAN: In addition to that, we certainly do from time to time through a variety of venues market research to understand the behavior patterns of our fans and our viewers, both in the feedback that comes back from that overtime and really just in watching their behaviors. For instance, one of the things that was probably pretty readily observable to everyone is that when one of our dynamic stars was shown outside of his fire suit and helmet on Dancing With the Stars, the interest in him and our sport expanded. Again, literally seeing how people respond to those kinds of behaviors is another sign to us of when we have the opportunity to expose these drivers, not just in competitive mode, but beyond that, we've seen a positive result from it. That's another way we measure our fan response.

Q. Marc, I read that you have just signed a new interactive broadcast partner that will provide real-time content for the online fans to go along with your NHL and college sports packages on Versus. Is there any chance we may see something like that with the IndyCar Series telecast next year? To that end, what are your other plans on expanding the scope of the series beyond broadcast media?
MARC FEIN: That's the fun part that we're all looking forward to, the Indy guys and us, sitting down and figuring it out. The ink has just dried, but certainly we'll be having those meetings. I think we are all in agreement that anything we can do to enhance the viewer experience, we should do it. What site that lives on, we will all talk about that, too, to see how to maximize that.
But what you did read is something that we've done with some of our other sports with Jack for the company to just get a different experience. And I think we're going to be kicking around lots of great ideas, some of which will never make it out of the conference room, I'm sure, and others which will and hopefully will turn out great.
I think that's the fun part now that we're all looking forward to getting into it.

Q. How far away are we from live broadcast of the Firestone Indy Lights Series races? What will this new agreement mean as far as focus and programming about the Indy Lights Series?
CHARLIE MORGAN: The Indy Lights product will be a Versus product. To be perfectly honest, we have not yet really had the opportunity to get with Marc and his folks to discuss the exact broadcast windows, length of window, and live versus tape on that. I can't give you a direct answer on how close we may or may not be.
In general, though, and I'll let Marc expand if he'd like to, the Indy Lights, the Firestone Indy Lights, definitely was a part of the broader package that we were discussing, and I think Versus was excited to have added to their arsenal of IndyCar and IndyCar-related programming.
MARC FEIN: Well said. Pretty much what Charlie said, we're excited to have all the product coming to us from this deal. In one way, shape or form there certainly will be Indy Lights on our network. But, again, that's something else that is, as I keep mentioning, part of the fun process and meetings that we're going to have over the next few months to figure out what to do on that front.
THE MODERATOR: Gentlemen, thank you for joining us today. We appreciate that. Congratulations to all sides on today's announcement.