FOX Sports Buys 1/3 of IndyCar

Today we woke up to the bombshell announcement that FOX Sports has purchased a 33% stake in the Penske Entertainment Corporation, the parent company of IndyCar and the Indianapolis Motor Speedway for an estimated $125M-$135M. This is just the latest in a series of moves by traditional linear sports media companies to acquire ownership stakes in the properties they broadcast. This is an emerging strategy to future-proof their interests and ensure that they keep their seat at the table as viewership patterns change and the industry continues to embrace streaming and social media as the new marketplace to sell their wares.

The 33% ownership stake that changed hands today is one of the most significant deals of its kind compared to previous deals involving stick-and-ball sports. FOX does own 50% of the UFL but average viewership is already well below IndyCar and falling year over year. FOX has a similar deal with the BIG10 in college sports as well.

IndyCar’s ratings have risen significantly in FOX’s first year as broadcast partner. While FOX touts a 31% increase across the board, the Indy 500 contributed disproportionately to that figure. Indy 500 viewership jumped 40% to 7.05M average viewers, its highest number in 17 years.

This success hasn’t come without some notable teething problems.

The graphics package has been unreliable with missing or inaccurate timing and scoring data and other visual glitches.

The broadcast uplink failed completely in the closing stages of the race at Thermal which was ultimately blamed on poor power infrastructure failing in the desert heat. Thermal has not been popular among IndyCar fans and was ultimately cut from next year's schedule. The Thermal Club would make a convenient scapegoat if there had been a more serious failure on FOX’s part like many believe. We may never know what really happened since the owners of The Thermal Club are eager to please and hopeful for IndyCar to return. They will never contradict the accepted narrative.

Several key race moments have been missed by the broadcast this season, most glaringly at Toronto where FOX went to commercial under caution but failed to return to the race before the green flag waved. Instead fans returned to see the aftermath of another crash, a five car pileup which saw Jacob Abel’s car resting on top of Josef Newgarden’s. Other missed action throughout the season can be easily forgiven but missing a restart is the cardinal sin of motorsports broadcasting and is completely indefensible.

But, Fox did get some key things right this year and I’m more than happy to give credit where it’s due.

“Keeping the band together” was a great move in my opinion. The on-air personalities, namely Townsend Bell, James Hinchcliffe, Georgia Henneberry, and Kevin Lee had an established rapport and are very well liked by most IndyCar fans. Providing that continuity in the transition from NBC Sports may not have been the sexy choice but it was the intelligent choice. Where FOX did flex some muscle was in the addition of Will Buxton to the booth. Buxton’s motorsports broadcasting resume is a long one and certainly was not a risky pick for the job. In recent years Will Buxton had become one of the most prominent faces associated with F1’s recent ascension in North American popularity, thanks in no small part to Netflix’s Drive To Survive. It was a shrewd move by FOX to poach such a beloved personality from IndyCar’s biggest commercial rival and the move has paid off.

There have been some technical wins too. The return of the in-helmet “Driver’s Eye” camera has added a more visceral experience for the viewer. For years fans have felt a bit disconnected from the drivers since the addition of the aeroscreen and this new angle effectively bridges that gap. The addition of the “Ghost Car” graphic overlay has been fantastic as well and is something I’d love to see more of as the technology is refined and directors find new ways to utilize it on the broadcast.

By far the biggest driver of this year’s increased viewership is FOX’s commitment to air all 17 races on “Big FOX.” Having all 17 races on broadcast television, free to any American with an antenna or an internet connection, has been a massive win for the series in terms of reach. This is in stark contrast to NBC’s tenure as broadcast partner where most races bounced between multiple cable channels (even mid-race) and 1-2 races per year were locked behind a paywall on Peacock or NBC Sports Gold with no way to watch the race on linear television.

This is not and has never been a cash grab, Mark Miles made that clear in October when the broadcast rights were first sold to FOX.

"We did not do the deal which would have afforded us the greatest rights fee, this is the deal that made economic sense but more so was far and away the greatest reach, and that -- you could think about it as our willingness to invest by taking less for the growth of the sport through the greater reach."

Roger Penske reiterated after today’s sale that they were not looking for capital when FOX approached them with this ownership deal and that the decision was based on this year’s ratings success and his belief in FOX as a true partner to grow the sport. “It was a pretty easy question to say yes to.”

Today’s deal also extended FOX’s broadcast rights deal beyond 2027 but the number of years was not disclosed.

It’s important to note that the CEO of FOX Sports is Eric Shanks, a Hoosier himself who grew up attending the Indy 500 and by all accounts has a real passion for the sport. Roger Penske has always been incredibly protective over the sport he loves even before spending a sizable chunk of his net worth to buy the series and operating at a steep loss during Covid just to keep the series alive. Selling the series, even a percentage of it, is not something The Captain would take lightly. This ringing endorsement of Shanks and FOX after less than a year of broadcast partnership tells me everything I need to know about their commitment to IndyCar.

Anyone who watches multiple racing series on a regular basis can see that the quality of the racing product in IndyCar is far greater than other series with higher ratings and deeper pockets. The growth potential is enormous and FOX can see that clearly. Now with more skin in the game, FOX is poised to drive that growth for years to come. With FOX’s shrinking NASCAR footprint, IndyCar seems to be their answer to fill that wheel shaped hole in their portfolio.

Marketing has always been IndyCar’s achilles heel. This year’s Super Bowl ads were the best promotion we’ve seen in years and with key phrases in today’s press releases like “star-building” and “year-round storytelling potential” I am beyond excited to see where FOX takesthe marketing strategy in the coming years.

I think the most important takeaway from today’s news is this quote from Eric Shanks: “The blueprint is there. We know what this sport can be.”

The comment section is on X @BenScruggsGP

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