During breakfast at Charlie Brown’s on Main Street across from Indianapolis Motor Speedway last Tuesday, the owner of the diner had a message for Roger Penske and IndyCar’s Mark Miles.

“You surprised me. And if you surprised me, you surprised everyone!” the owner said.

It was one day after Penske, 82, had announced a blockbuster purchase of IndyCar and IMS in a deal shrouded in secrecy. It makes the business titan only the fourth owner in the history of IMS, which has existed for more than a century.

Sources said Penske agreed to pay between $300 million and $350 million to the Hulman-George family to acquire the racing assets of Hulman & Co., which also include the IMS Productions company. Both Miles, president and CEO of Hulman & Co., and Jonathan Gibson, Penske Corp.’s executive vice president of marketing and business development, declined to confirm the purchase price.

Hulman & Co. Chairman Tony George, whose family has owned the track since 1945, told reporters last week that he put the deal together with Penske in six weeks, after originally approaching Penske about it at IndyCar’s season finale in September at
WeatherTech Raceway Laguna Seca.

Miles said the sides kept the talks to only about 10 people in total, enough to get the monumental deal done quickly but also small enough to do it without the news leaking to the media. Now, after almost 75 years of ownership by the Hulman-George family, the sport is suddenly looking toward the future with its most successful stakeholder running the entire show.

“It was bittersweet for all the family, but as Tony said, they had taken their stewardship as far as they could,” Miles said. Ultimately, “Roger gave them the comfort that they were leaving it in good hands.”

The matriarch of the Hulman-George family, Mari Hulman George, died last year, and the company sold its Clabber Girl baking powder company earlier this year for $80 million.

The family considered several options in recent months for the racing assets, including bringing on minority investors or partners while keeping the majority stake. The family only decided to sell entirely late in the summer, said Miles, who predicted that Tony George will end up as a minority investor.

Miles said there were multiple bidders for the assets. Media reports last week identified one of them as Liberty Media, which also owns Formula One. Sources last week told Sports Business Journal that Endeavor looked briefly at buying the property in recent years. Endeavor, however, was not involved in this round of bidding.

Penske’s winning bid garnered a relatively positive reaction from the racing industry because it leaves the series in the hands of a well-respected businessman who is deeply familiar with IndyCar. A poll on the Indianapolis Star’s website had a 93% approval rating of Penske being the buyer.

Bobby Rahal, co-owner of Rahal Letterman Lanigan Racing and a former IndyCar driver, told Sports Business Journal he was thrilled with the news.

“For me, and for those of us in the series who have any involvement, you’ve got to be super pleased,” said Rahal. “He’s had tremendous success in racing, but I think it’s his credibility as a businessman that is going to drive the growth of the series and the 500. Roger doesn’t do things just to do them; he does them to make them better.”

The deal, which is expected to close in January, was done through a newly formed subsidiary of Penske Corp. called Penske Entertainment Corp. Allen & Co. was Hulman & Co.’s financial adviser, while its counsel was Ice Miller.

Gibson said Penske Corp. has a long history in owning and operating events and racetracks, so this fits in well with its capabilities. Penske built Auto Club Speedway (now owned by NASCAR) in California, once managed Michigan International Speedway and still manages the annual Belle Isle Detroit Grand Prix that has IndyCar and IMSA races.

Team Penske has won the Indianapolis 500 a record 18 times, so the venue is deeply intertwined with Penske himself and his corporation.

Despite that racing pedigree, work remains to be done to grow the IndyCar Series. IMS has been the moneymaker of the Hulman & Co. portfolio, helping to underwrite the series that has traditionally not turned a profit. Media partner NBC Sports reported a 9% increase in IndyCar viewership for this past season, with an average of 1.105 million viewers per race. Attendance was up at roughly half of the series’ 17 events, while flat to slightly down at the others. The Indy 500 has seen a renaissance in attendance since the 100th running in 2016, now routinely bringing out 300,000 people on race day.

Penske is getting right to work. He was at IMS last week with his team taking a tour of the facility. Miles and Gibson said Penske executives plan to meet this week with IndyCar/IMS executives to discuss sponsorship strategy.

Sponsorship and media rights are two of the areas where IndyCar’s revenue still pales in comparison to that of NASCAR. Terms of NBC’s media rights deal have never been disclosed, but they are widely believed to be far less than the $820 million annually that NASCAR gets on average from Fox Sports and NBC Sports.

Bringing in more corporate partners figures to be a major goal of Penske. NTT Corp. is the IndyCar’s title sponsor. The series’ official corporate partners roster has several major openings, and selling a title sponsor to the Indianapolis 500 could be explored. The track has sold presenting rights to the race, but the first two companies that have bought the asset have been relatively unknown brands in PennGrade Motor Oil and Gainbridge.

Steve Lauletta, the former president of Chip Ganassi Racing, said the sale represents the perfect opportunity for IndyCar and IMS to re-evaluate how they sell sponsorships. Lauletta worked personally with Penske during a prior stint at MillerCoors, which remains a Team Penske sponsor.

“The opportunity for IndyCar to differentiate themselves from other racing series has now taken a step forward because Roger brings a level of thinking and business acumen that is going to be something to be leveraged for the benefit of the speedway and series,” said Lauletta. “With that, and the contacts and respect he brings, it is only going to amplify the momentum in a much faster way than it would have been if it continued on the current path.”

At last week’s news conference, Penske was surrounded by his top lieutenants in Penske Corp.: Gibson, President Bud Denker and Penske Motor Group chairman Greg Penske. Gibson will be involved with IndyCar’s sales and marketing, but is not expected to take on an official title at the series. Penske said he expects to keep the current executive leaders of IndyCar and IMS intact.

Penske Corp. also will be focused on strengthening the stability of the team ownership model. Penske said he will take steps to ensure conflicts of interest are not raised, including stepping down from his role as a race strategist for one of Team Penske’s IndyCar teams. Team Penske President Tim Cindric is expected to continue to operate that organization.

Among the ideas raised last week by industry executives is to either look at a franchising model like what NASCAR has done with its charter system, or give team owners a stake in Penske Entertainment Corp. Gibson said it was premature to discuss specifics for strengthening team ownership.

Penske also said he is interested in leveraging the massive real estate of IMS to turn the track into an even bigger entertainment destination. Both Miles and Gibson declined to say whether Penske is interested in building a mixed-use development, and Gibson said it is too early to say how much Penkse will invest in the facility.

Other topics that Penske voiced support for last week include the much ballyhooed idea of doing a NASCAR Cup Series/IndyCar doubleheader weekend, and his support of NASCAR continuing to run the Brickyard 400 at IMS.

Fans are interested in whether Penske will implement guaranteed entries into the Indy 500 for full-time IndyCar teams, a controversial topic that Penske has previously voiced his support for as a team owner. There is also the question of whether Penske, one of America’s top-selling car salesmen, can help IndyCar acquire a third engine manufacturer to complement Chevrolet and Honda. Penske said he wants to keep the 17-race schedule roughly the same, but IndyCar has been looking into adding one or two more races, potentially one outside North America.