NBC will carry the Indianapolis 500 on May 30, and according to a recent media report, it could be the last time that “The Greatest Spectacle in Racing” airs on the broadcast network. The story said NBC is close to “walk[ing] away from its TV rights deal with IndyCar” and that CBS would be the “likely beneficiary” if the two sides parted ways.
Chris Lencheski, chairman of Phoenicia Sport and Entertainment (an adviser to media companies and private equity firms), believes CBS could be a sensible landing spot for the open-wheel racing circuit. ABC (which carried the Indy 500 every year from 1965 through 2018) and FOX would also seemingly suit the sport’s needs. But he says IndyCar should avoid the temptation of placing revenue before reach. While an OTT or MVPD style service “might be willing to pay a pretty good chunk of money to acquire the exclusive rights to IndyCar, if the [platform] itself has a limited—albeit upscale—audience, the series is actually limiting themselves in the long haul.” Engagement of current and future fans aside, team owners selling commercial sponsorships and race promoters selling race entitlements need the total potential addressable audience pie to be as large as possible.
Our Take: Mark Miles, president and CEO of Penske Entertainment Corp., which owns the NTT IndyCar Racing Series, refuted the report’s “account of where [IndyCar and NBC are] in negotiations.” He said the current broadcast pact was always set to expire at the completion of the ’21 season, and with no back-end rights in the deal, IndyCar has “been free from the day [it] signed [with NBC] to talk to the marketplace” (i.e. the fact that discussions are ongoing is not particularly newsworthy). He added the open-wheel racing circuit was “definitely still engaged in important conversations” with NBC. A decision on IndyCar’s media rights future should be made within a matter of weeks.
It’s not clear why NBC would be prepared to walk away from the relationship. But with plans to shutter NBCSN by the end of 2021, NBC will have to find a home for the half of the IndyCar slate not currently airing on network television should it retain domestic broadcast rights. Presumably, USA Network, which will carry some NASCAR races next year, and Peacock would be among the options.
CBS’ renewed focus on motorsports (see: Formula E deal, launch of Superstar Racing Experience) makes it a logical home for IndyCar should a split occur, Lencheski said. Like NBC, CBS can air some races on network television, slot the balance on a cable network (CBSSN) and run practice/qualifying on their OTT service, Paramount+.
It’s safe to assume the majority of IndyCar races will air on network television next season regardless of where the rights end up. “We believe [the sport] is in the early stages of its growth mode,” Miles said. “And in that context, for the teams, our tracks and the series itself—we of course care about rights fees—but audience [size] is the highest priority. It is very unlikely we would rely solely on any of the [streaming] platforms for our live coverage in the short term.” Of course, if the goal is to maximize reach, it wouldn’t make much sense to sign an exclusive deal with a broadcaster.
While IndyCar is prioritizing eyeballs and seeks to increase the number of “live network events” (i.e. races on broadcast television) during this round of negotiations, Miles mentioned the sport does not want to be “last adopters to streaming and disruptive technologies … The alchemy here is to find an arrangement that allows [the series] to continue to have a growing audience while not altogether being on the sidelines with [digital].”
Lencheski said IndyCar would be wise to align with Amazon as a complement to its linear broadcast partner. “The smartest tactic Formula One has employed was developing the Drive to Survive anthology with Netflix,” he said. “It enabled the casual customer to get familiar with the drivers and story of F1. People relate with people. They relate with the storyline. Amazon is a perfect partner for IndyCar because they can tell a great story. They [also] have a scalable strategy that could sell tickets, licensing and merchandise, all of the things they do or are planning to do with the NFL.” Dialogue between IndyCar and the e-commerce giant is believed to be ongoing. Amazon said in a statement “as a matter of company policy we don’t comment on rumors or speculation.”
Miles did not want to comment on his conversations with any specific streaming service. But he did say the idea of signing a deal with a broadcast network and then a secondary pact with the likes of Amazon or Apple is not as cut and dry as it sounds. “Most of the linear broadcasters, if they are going to make a major commitment to you, then they want their streaming platform to be your streaming option.”
Look for IndyCar to retain its international media rights, as it has since 2019, regardless of whom it eventually decide to partner with domestically. Doing so enables the sanctioning body to capitalize on driver success (in terms of exposure or rights fees). “It’s not surprising that when you have a driver from France, who is well-known in France, who is having success or is doing something new—like Romain Grosjean—that our licensees audience goes up considerably,” Miles said. With more than half of the series’ drivers from international locales (22/34, from 14 different countries) there is an opportunity to go market by market and unlock economic value as those individuals find success. It’s worth noting that most of IndyCar’s existing deals abroad have one or two years remaining.