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October 30, 2014

Mark Miles

Will Power

THE MODERATOR:  Welcome to today's IndyCar conference call.  Earlier today the 2015 Verizon IndyCar Series schedule was released and features many highlights, including 17 race events, two new race venues, a total of six ABC and 13 NBC SN event broadcasts. 
The diverse calendar of events, which features six ovals, six road courses, and four temporary street circuits, includes a total of 13 markets making a return to the calendar for 2015. 
Growth in the schedule with new markets in Brasilia, Brazil and New Orleans, continuity in the broadcast schedule with ABC returning to broadcast the first domestic race of the year in St. Petersburg, the Angie's List Grand Prix of Indianapolis, Indianapolis 500 qualifications, and the 99th running of the Indianapolis 500, as well as the doubleheader in Detroit. 
NBC SN will broadcast a total of 12 races, including the final eight of the season. 
A new market also will host the Verizon IndyCar Series championship finale, which will be held at Sonoma Raceway on August 30th. 
Joining us today is Mark Miles, the CEO of Hulman Motorsports, the parent of IndyCar and the Indianapolis Motor Speedway. 
Momentum last season and the 2015 schedule represents another step forward in the strategy you outlined last year.  What are some of the highlights of the 2015 calendar from your perspective? 
MARK MILES:  I like the lead-in question, because that's the way we look at this.  We're pleased with this schedule and we think that observers will see that we're making progress in implementing the strategies that we've laid out and have been talking about for well over a year now for the Verizon IndyCar Series. 
We think that this schedule will help us continue to grow our fan base, both through our broadcasts and digitally as well as at the tracks themselves. 
Just some highlights from my perspective.  We are really delighted to welcome two new markets, New Orleans and Brasilia, to the Verizon IndyCar Series.  Our partners in both those places are making big investments.  They're racing people.  They're open-wheel, IndyCar people.  You'll have a chance, I'm sure, to meet all of them and know that they are as excited about being part of the Verizon IndyCar Series as we are about having them.  They'll be important and I think long-time members of our series. 
This calendar expands the season from 22 weeks in 2014 to 25 weeks in 2015.  As we look ahead even to 2016, I think there's the potential for us to get to 28 weeks, maybe 29 weeks.  So the way I look at it is, what we're doing is we're expanding the season and sliding it forward into the calendar year because we have a very strong view that that will allow us to be in the optimal space of weeks and months for our television audience to grow and our digital audiences to grow, for us to promote the sport. 
We showed really good progress that's been talked about with the first part of that strategy appearing by ending on Labor Day weekend in 2014.  This year will be our first chance to show the whole of that strategy as we end on the weekend, as it turns out, before Labor Day, but start earlier.  It's actually an expansion in the number of weeks for the series itself. 
It also shows us beginning to develop the international strategy that we've talked about.  That means a couple things.  We've said for some time I think there's the potential for ultimately maybe four international races in the period from the U.S. perspective after the Super Bowl in early February into as late as the middle of March.  Then once we get to that point, this schedule moves the series into North America and stays there until the finale and the championship is decided. 
We're very pleased that Brasilia is the first race to join us in this strategy the beginning of March.  I can tell you while Brasilia is alone at this point for 2015, there are ongoing, very active conversations that are serious with three other countries at this point.  We remain bullish and more confident than ever in our ability to expand that part of the series in February. 
The other comment I'll make is about Labor Day.  Our intention over time is not just to start earlier, but it is to have the culmination, the finale of the championship, in the States on Labor Day weekend.  This calendar doesn't do that.  It concludes with Sonoma the week prior.  We're delighted.  I think Sonoma will be a great place for us to have our finale.  Everybody around the series knows lots of people want to go there.  It's a great track.  It will be good for us. 
But we intend to own the Labor Day weekend.  There are, again, very active discussions with possible new cities that would be joining the series that particularly want to be on the Labor Day weekend.  They think it will be perfect for them. 
Our options as they are developing are in major markets, they're in great time zones from the point of view of the broadcast of the finale.  We're very, very bullish about being back with the finale in a great market on Labor Day weekend for 2016. 
Those are just some of the highlights.  Everybody appreciates that making these schedules is cooking some kind of omelette.  There's so many considerations ranging from our own strategies related to growing the sport, the number of people who take us in, our fans that engage at tracks, on television, digitally, along with considerations as to what markets we're in, and balancing, to some extent, the types of racing we do from oval to road course to city streets, and making sure that we're in places where our promoters can accommodate all their own local considerations, that they're not conflicting with other events going on in those markets. 
We think we've made real progress.  We think we'll be able to with this schedule to continue to expand the fan engagement with the Verizon IndyCar Series.  We think it represents good progress. 
THE MODERATOR:  Will, you'll be defending your first series title in 2015.  What are your thoughts on next year's calendar? 
WILL POWER:  I think it's a very good balance with six ovals, six road and four street courses, maybe a couple more street courses in the future.  I'm very excited for it to begin there in Brasilia.  We've raced in Brazil before.  You always get massive crowds there.  They're very passionate about IndyCar racing. 
Then the finale, I think Sonoma has been a great track for me, a really nice area to wine and dine sponsors.  I couldn't think of a better location to finish the series. 
Really looking forward to the championship.  I kind of like the amount of back-to-back races.  It keeps you motivated, keeps you on your game.  It's about just being consistent week in, week out at every type of discipline.  I think that's what makes IndyCar so special.  To win a championship, you can't be good at just one discipline, you must be able to win at all three disciplines:  on the roads, streets and ovals. 
THE MODERATOR:  Let's open it up for questions for Mark Miles and Will Power. 

Q.  Mark, I know that you wanted to end on Labor Day weekend.  Was the fact that it falls a week later in 2015 than it did in 2014, the NFL is going to open up that weekend, the reason why this is going to end on August 30th, the same date it ended this past year when Labor Day was September 1st? 
MARK MILES:  Not really.  When I say we want to own Labor Day weekend at least in racing, I mean it, and I mean Labor Day weekend.  It's a holiday, as you know, in the States that moves around, kind of shifts with the flow of the calendar.  That is our objective. 
It just was a weekend, one week later, that didn't work for Sonoma, and didn't work for our other existing promoter. 
As I said, we're one week earlier on the end than we would normally plan to be, and plan to be in in 2016.  I think that's actually more than offset by the earlier start. 
To us it's a little bit like Indianapolis and Memorial Day weekend.  We think that three-day weekend is a really great opportunity, the right city, where it should be a big market ideally, and hopefully it will be a market where everybody doesn't go to the beach, and they're ready to celebrate a fabulous holiday weekend in their city. 
We expect to be there in 2016.  That would have been our preference for this year, but it just didn't work out with our existing portfolio of promoters. 

Q.  How close was Dubai to being part of the 2015 schedule?
MARK MILES:  Well, I hope I've spoken more about the UAE, sort of the Middle East, than I have any particular emirate.  I'll just leave it by saying that there is real interest in the Middle East, and we continue to try to wrestle that to the ground. 

Q.  Mark, when you talked about progress on the schedule, the second half of the schedule, there's a lot of date shifting, Pocono, Toronto, Fontana, all new dates.  How important is date equity going forward considering you have a lot of races shifting dates from where they were this year?
MARK MILES:  That's a good question. 
As far as I think about it, date equity is really a high priority.  I spent a lot of years in tennis.  The way I think of it is, I'd prefer people never thought of using the normal calendar where they think about March 8 or March 29 or April 12, I want them to think Brasilia, St. Pete, NOLA.  You want to get there where you have the same dates, same weeks year after year.  But it's a goal, a direction, a lot easier said than done. 
The changes here, which you're right, are pretty considerable, really related us trying to accommodate local promoter concerns.  Frankly, I'll go ahead and explain some of that. 
It's no secret that the Toronto event was challenged by the fact that the Pan American Games will be in Toronto in what I would call its traditional date.  That's a big event for any country.  It takes about three weeks to organize.  It would really require most of the same facilities we have for our race there. 
Everybody worked really hard to find another week that worked.  We appreciate the flexibility of the partners in Toronto.  Frankly, our own teams, as well.  There was a lot of discussion about moving Toronto there where it represents a lot of back-to-back weekends of being on the track.  I for one was just delighted to see the paddock come together and say, Absolutely, Toronto is an important venue to us, and if we can't be exactly in the traditional week, we have to at least keep them on the calendar.  That was part of starting a number of changes.  Once Toronto moved, you have Fontana looking for a better week for themselves.  You get a little bit of a domino effect.  This is how things sorted out. 

Q.  When you're going in and making a schedule, how much do you look at other series' championships and does it open up a can of worms if it becomes a conflict with sports car schedules or other drivers or staff might want to compete? 
MARK MILES:  Well, the last part of that question may be slightly different than the way I first think of it, if I understood it the way you intended it. 
I mean, the first thing we do is work with our broadcasters to find the best possible windows.  In the first instance, as I already mentioned, we want the season to run in the right window, the right months and weeks, if you will.  As I've said, we're convinced that we can expand the season and slide it forward, ultimately having a couple more races and more weeks on the calendar but in a period where we have sort of more tailwind for the broadcast audiences to grow and for us to promote it generally.  There's that first point. 
After that, we work with the broadcasters to look at everything else that's going on as best we can.  For example, my understanding is that NASCAR hasn't finalized all their windows, but if we just look at the NBC part, which is obviously new for next year of what we understand about their schedule, I think we're hopeful that there will only be maybe one NBC Sports Network conflict or overlap between NASCAR and IndyCar, which is good.  It's down from two this year, if that's the result.  We're very cognizant of that.  We want race fans to be able to take it all in. 
The last part of your question was more from the driver's point of view.  I think that is a consideration.  We want to stake out for the Verizon IndyCar Series the weeks that make most sense for us, but we also are happy if our guys can have some opportunities to pursue other series.  But it's probably in that order as we think about those metrics. 

Q.  Mark, a question about Pocono.  How difficult was it to find a different date?  How would you describe the negotiations there?  Lengthy or... 
MARK MILES:  I think it was a partnership discussion.  They made it clear to us, as you really well know, race weekend this year, they were concerned about the holiday weekend, wanted to see if there wasn't another opportunity for them.  That was very much the focus more than the terms and conditions, was the date.  That's where you kind of get into this musical chairs, domino, pick your favorite metaphor, for scheduling.  They have other events that you know about that they need to accommodate. 
It was not contentious.  It was a good effort between two partners.  I think they think that this is a pretty good place to land for them. 

Q.  Mark, is this the only time that Sonoma Raceway can expect to hold the season-ending race?  You said you want it on the Labor Day weekend in the future.  Is that date out for Sonoma? 
MARK MILES:  Only as 'forever' is a long time.  I can't see that far. 
But I've said what I meant.  We think the world of Sonoma.  It's really important to us to be there, for that to be a vibrant, successful stop on the series. 
As far as I know, Labor Day weekend they don't think works well for them.  We want, as I said, for the reasons I said, to end on Labor Day weekend.  It may well be that this is kind of a one-off opportunity.  I would never say 'forever.'  That's probably the most likely scenario as I see it at this point in time. 

Q.  Will, can you anticipate how having the final at Sonoma might change the racing strategy in that race?  Sometimes the event becomes a fuel strategy race more than anything else.  How do you think that's going to change the actual racing? 
WILL POWER:  I mean, obviously when it comes down to the championship, there's usually only two or three people in it.  It will only affect those people's races. 
I see it being very similar to what it's been in the past.  Definitely had some pretty eventful races there over the last couple years.  With the changes they made with the hairpin and so on, it's created passing, so it's not quite the procession it was before.  I think it will be really good, I do.  We all love going there.  It's a very good racing track. 

Q.  Mark, this year we had with Mikhail Aleshin the first time a Russian in the IndyCar Series.  Is there any plan for you to have a race in Russia to the IndyCar schedule?  Question number two, also for the future schedule, is there any possibility we can see Elkhart Lake again have an IndyCar race? 
MARK MILES:  On the Russia question, big country, big market, big investment in a new track in Sochi.  Mikhail is very well-known in that country, I think very popular.  As kind of a general matter, interesting from our perspective.  In today's world, it's complicated.  As you probably know, a number of countries, including the United States, have some sanctions that have been imposed, so there would be legal matters to sift through.  We just have to look at everything to make sure that made sense.  But I would not rule it out sometime in the future. 
Elkhart Lake, I think I've said before, one of the first things that occurs when one takes the job that I now have is drivers, team owners, race fans love Elkhart Lake and would love to see us get there.  It has our attention.  There's been, I don't know, two, three times a year contact with George there.  Maybe someday I guess would be my answer. 
Again, what has to happen is we've got to look at all these factors.  We have to do our best to be in the markets that we believe will help us grow our total audience and the series itself optimally.  Anytime we add a race, we're getting close to the point where if we add races, especially in the U.S. summer, we almost have to take a race out because, as you can see, it's quite full. 
We do want to think about the impact one race to another if it's in the same region.  We realize we have a lot of races in the Midwest, not so many in some of the other highly populated regions of this country. 
There's a lot going on there.  We have a lot of admiration for Elkhart Lake.  I certainly won't say we will not be there, but we haven't been able to see how that works so far. 

Q.  Will, how different has it been for you as a champion in this off-season?  Has it changed over other off-seasons?  How do you expect it will be different for you when the season starts in March? 
WILL POWER:  It's been a big relief winning the championship, honestly.  Having finished second three times, close second, it's something I worked toward for 15 years.  It's been a great off-season.  Really great going home.  Got a great reception in Toowoomba.  They gave me the keys to the city, whatever that means.  I can get into any club or whatever at any time (laughter). 
Felt good.  Every time I think about it, this is what I worked for, finally got it. 
Looking toward next season, to me I think I'm going to be more relaxed about it, obviously motivated as ever.  But I won't have that weight on my shoulders of being the most winningest driver in IndyCar in the last five years but not winning a championship.  I won't have that wondering feeling, Am I ever going to win one?  I think it will just be about executing and trying to win another championship, an Indy 500, in a more I hate to say relaxed manner but calm manner, you could say. 

Q.  Mark, you've done a great job explaining all the factors and juggling of various things that go in to making a schedule.  Maybe some fans out there might not understand what goes on, maybe some media members, including myself, but behind-the-scene efforts that you do to satisfy that fan support, all the planning that goes in.  Can you put that into a few stages that you would share with fans? 
MARK MILES:  It's kind of a Gordian knot.  Everything is connected. 
For us, we tried to start the process with a clear strategy that is all about growing our fan base.  I think sometimes we have to ask the teams to not make concessions but to work extra hard to accommodate that.  
An example is those consecutive weeks that we have on the calendar for 2015.  As I said, I'm delighted they were all willing to do whatever it took really to make sure we were able to preserve our run in Toronto. 
Anyway, you have a strategy, and then you get a pretty good handle from all your existing tracks and promoters about their existing needs.  Inevitably every year there will be some reasons from the local perspective that something changes, and that can start kind of a musical chair or domino process.  If you want to try to find something different for one city, you're highly likely to affect another one.  If you try to move that one, you involve another one.  Just gets as long as a piece of string. 
So the process takes a lot of work.  One thing that we know for sure is it's not over till it's all over.  You can think you're down to the one last issue you have to solve, but solving it makes you go back and involve a city or race you thought you had placed. 
It's a little bit complex, although it's not rocket science.  It takes a lot of good work on the part of teams.  I think our team here gets better at it all the time.  It involves C.J. O'Donnell, our marketing group, who relates directly to the promoters on all things not racing directly.  Derrick Walker and his team, they're thinking about it, always representing the technical interests in the paddock, team owner, driver interests in the process, who are knowledgeable about every place in the country we could race.  Then a number of us are involved with our broadcasters, always looking at that. 
I do think we made progress on that front.  Again, I think it was evidenced in the growth, to some extent, of the television audience this year. 
I think we are unusual as a sport in today's world in the States.  In the past we sort of locked in a calendar mostly from the point of view of local considerations, then kind of went to the broadcasters.  We feel like that has to be more balanced.  We have to involve the broadcasters, along with our promoters and the teams, from the earliest discussions about the potential for change because we've got to find the best possible windows for our television audience. 
So it's complicated and it takes longer than we think.  This year I thought we might get it out a little earlier than we did.  But it's out.  It's always about getting the best possible result.  I would take the opportunity to just compliment our paddock and our partners and our team for working through it. 

Q.  Will, what do you feel about having a fourth person on the team, one that you've raced with before?  How do you feel that will benefit the team overall? 
WILL POWER:  I think Simon Pagenaud is going to be a great addition to the team.  He's got a lot of experience.  Also his engineer came along, Ben Bretzman. 
Especially with aero kits coming in, I think it's going to be important to have that extra data.  Having four drivers coming in, debriefing, being able to try multiple things in one session, I think that's going to help us. 
I really see our team as being very strong next year.  I see four guys that are capable of winning the championship.  It's going to be an in-the-team battle I think, but I think it's great to have Simon onboard. 

Q.  How do you feel that will affect the team? 
WILL POWER:  I've kind of answered that.  I think it will benefit the team, for sure. 

Q.  I assume you still have the same fire in the belly as you did starting last year? 
WILL POWER:  More.  I've been focused on next year.  I've been really working towards it.  Just the feeling you get from winning a championship gives you motivation.  You don't want to finish second again. 
I'm very motivated, very excited actually, about the schedule, just getting in there and defending the title. 

Q.  Mark, after looking at the social media and seeing what a lot of people's reactions were to the release of the schedule, there were about three major ones that popped out.  One had to do with the timing of the Milwaukee Mile because there's a lot of fan interest to have it right after Indianapolis as it used to.  What were the impediments to having that happen?
MARK MILES:  I think I get that.  But one of the big issues there is scheduling around their state fair.  I don't have all this clear in my head, to be frank, as to when it was where.  In our discussions with them was they came to the conclusion some time ago that they did not want the race to run during their state fair.  I think that's a departure from earlier days. 
I don't know off the top of my head exactly how long it's been this way, but more recently I would say Detroit being in that week immediately following Indianapolis has been the norm.  I think it's already established a level of date equity which we've already talked about. 
Between Detroit having been there for a while now, it working out very well there, trying in a sense to schedule in a way that works around the state fair in Wisconsin, I think that's what got us to where we are. 

Q.  The other thing that seemed to come out was we have a race season that's taking over the course of around six months when, in fact, the weather would allow for eight months.  How come there isn't a desire to broaden out the fan base as it relates to the course of the weather, what that allows for in a racing season?
MARK MILES:  We think our product, our racing, is just off the charts so compelling.  If you look at how we're doing given that compared to our ambitions, the biggest opportunity to grow is to make the sport available to larger television audiences.  It's hard to imagine a higher priority.  It doesn't trump everything else.  We have to cover the country, be in the right markets.  We have to have an optimal number of races that works for our teams and for their sponsors, our sponsors. 
But the bottom line is, and I'm not sure people understand our thinking about this yet, we don't think you simply race any weekend you can have a race.  First of all, I don't think our teams are looking for a significant increase in the number of races.  There could be some growth, but it's going to be on the margins.  Under our current economic model, I don't see an opportunity for a lot more races.  We can't pluck down a race anytime there might be a place with a track that's suitable where the weather's okay. 
Secondly, given my comments about increasing the television audience, what I want is when Will Power wins the championship, he's mugged everywhere he goes.  He can get a table, but he doesn't have to go through the paparazzi to get to it.  We have to get ourselves more exposed around the country and around the world.  The best vehicle to do that is broadcast and digital. 
In this country, the reality is as clear as it can be that for the most part we are better off having a somewhat longer schedule, which we are accomplishing in '15 versus '14, but in an earlier window.  That's why I describe it as sliding the schedule for the IndyCar Series forward earlier into the year.  It's more weeks.  It will be a few more races.  It will be in the weeks where we have the best opportunity to cut through all the competition, particularly in sports in the U.S. and get more market share, more people watching us. 
That's the way we think about it in spite of the fact that there are places in the country with tracks where the weather's good. 
The other comment I was going to make, if I may, is maybe to draw everybody's attention to what I think already has been announced.  That is our sport's version of spring training. 
There will be a first opportunity for everybody to be out there together with the aero kits, which will be in Barber, March 16 and 17.  We think that's going to be a really interesting opportunity for everybody to get their first look at the aero kits, what they'll do to enhance the racing this year.  We're excited about that, as well. 

Q.  Mark, Auto Club Speedway is a great high-speed oval.  IndyCar has had great races there, including your finale this year.  Sonoma is also a great challenging road course.  What is IndyCar's reasoning on ending your season and series at a road course like Sonoma instead of the oval like Auto Club Speedway?  What were the teams' responses to this change? 
MARK MILES:  Well, I'm going to learn more about the teams' responses today, tomorrow, in the days ahead.  But I think generally what we have heard has been pretty positive feedback. 
I believe that the answer to your question is that this is the week that worked best, these two weeks, between Fontana and Sonoma worked best for both of them. 
We know that Fontana did not wish to be in the Labor Day weekend.  I think they thought from a climate, L.A. market perspective, that this week worked better for them than at the end of this calendar. 

Q.  It will be interesting to see what they do on the Sonoma road course because that's an excellent course also.  With more road courses, it gets more interesting in the series. 
MARK MILES:  One thing I learned really early on is race fans will agree about a lot of things and disagree about a lot of things.  In Indianapolis there's a lot of people who think it ought to be all ovals, and elsewhere there's a lot of people who think the most compelling racing is road courses and streets. 
What I like about the IndyCar Series, as Will already said, it's really a great test.  You have all three, super speedways, smaller ovals, a great variety that's in my mind kind of the ultimate test for these drivers and great diversity for our fans. 

Q.  Will, when you go to an oval, oftentimes there's a lot of volatility in the standings the way a driver can have a good setup, race his way up.  We've been told by a lot of drivers it's very difficult to pass at Sonoma.  If a driver goes into the final race of the year, he's 20 points out, 25 points out, does he still have the same opportunity to fight for that championship that he may have had at a high-speed superspeedway such as Fontana? 
WILL POWER:  That's a good question.  On ovals, yes, it's easier to pass for sure, especially an oval like Fontana.  But you really rely on having a good car on an oval.  If you have a bit of an off weekend, it can be pretty tough for you. 
I think Sonoma in the last two years has had some really good racing, a lot of passing and action.  I think you still have an opportunity, even if you're behind on points, to be able to get through the field if you had a bad qualifying day, make your way to the front. 
Obviously you have to have fuel strategy and that type of thing that always seems to play into the final result, but I still think it will be a very good finale. 

Q.  We all think about a couple of years ago when you had your crash, battling with Ryan Hunter-Reay.  You were able to go back out after getting the car fixed and put him in a position where he had to finish in the top five in order to clinch the championship.  It was a very long race.  Still the length of the race kind of allowed that, where with a road course race, they're shorter races in terms of laps.  Do those same opportunities still exist with this being the last race of the season? 
WILL POWER:  Yeah, I do know what you mean.  Longer race, more opportunities for stuff to play out. 
I think if you watched the road courses this year, so much plays out.  I don't think it matters the length actually of the race.  I mean, if I look at when we had the race at Detroit, I started at the front, got a drive-through penalty, all the way to the back, was able to drive to the front.  I think Dixon had a very bad qualifying at Sonoma this year, or Mid-Ohio actually.  I think it's going to be as unpredictable as it as is. 
THE MODERATOR:  Ladies and gentlemen, that is all the time we have today for our conference call.  Mark and Will, we appreciate you taking the time to join us today. 
WILL POWER:  Thank you. 
MARK MILES:  Our pleasure. 

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