Why did Fox invest in IndyCar and what happens next?

Few announcements manage to be both understated and seismic, but Fox Corporation’s investment in IndyCar is one of them.

In the end, a simple press release was chosen to reveal the biggest shift in IndyCar’s ownership structure since Penske Corporation purchased the series in 2019 from Hulman & Company.

No executives were made available for further comment, no financial information was officially disclosed, and even some senior employees were unaware of the move until just before the rest of the world found out.

Yes, the Wall Street Journal (WSJ) reported a transaction price between US$125 million and US$135 million for a one-third stake in IndyCar, but the championship is distancing itself from hard numbers.

In an age where Formula One generates US$403 million in a single quarter – which is considered underwhelming – and one of Nascar’s 36 charters can go for as much as US$40 million, IndyCar is perhaps wise to keep quiet on that front.

So the focus is less on the nuts and bolts of the transaction, and more on what this new collaboration could achieve.

Any questions concerning Fox’s commitment to IndyCar have been answered now that the broadcaster is a co-owner of the series.

Still, questions linger about what this means for IndyCar and how it will evolve from this point on.

How did we get here?

To better understand Fox’s decision, it’s important to first revisit IndyCar’s history. Two key moments have defined how the series stands in the modern era – and both nearly brought the championship to collapse.

The most recent was the Covid-19 pandemic, which shook sport globally. IndyCar, though, was especially vulnerable due to its precarious financial state.

Had Roger Penske not purchased the series the year prior, IndyCar might not have survived. His acquisition provided long-term stability, allowing the championship to better withstand the unprecedented challenges of the pandemic.

Penske’s efforts deserve recognition as the series enters this new era with Fox. In addition to taking ownership, the motorsport veteran has invested heavily, including around US$50 million in renovations at the Indianapolis Motor Speedway (IMS).

The second pivotal moment was the infamous ‘split’ in 1994, which became arguably the most consequential turning point in IndyCar to date. Although the series reunified with Champ Car 18 years ago, the scars remain.

That power struggle devastated the popularity of open-wheel racing in the US and TV viewership has struggled ever since. While this year’s Indianapolis 500 recorded its largest audience in 17 years, season-long figures still rarely exceed one million viewers.

For perspective, the average audience during the 1993 season, the final year before the split, averaged 4.12 million viewers. This year on Fox, IndyCar has surpassed one million viewers just three times outside of the Indy 500.

Roger Penske (right), commonly known as ‘the Captain’, should be commended for keeping IndyCar afloat during the Covid-19 pandemic, but has received criticism around a perceived lack of marketing (Image: Getty Images)

How is the broadcast partnership performing?

Now is a good time to evaluate how the first year of the broadcast partnership between IndyCar and Fox is progressing, especially as this can help explain the company’s direct investment in the series.

The season started well with 1.42 million viewers tuning in for the opening race in St Petersburg. However, since then, Detroit and Gateway are the only other races that have broken the one million viewer mark.

Overall, IndyCar’s performance on Fox can be considered solid but not spectacular. Yet, the viewership for St Petersburg, Detroit and Gateway tells an intriguing story.

At the start of the broadcast partnership, Fox created three advertisements centred around star drivers Josef Newgarden, Pato O’Ward and reigning IndyCar champion Álex Palou. These aired during Fox’s coverage of the Super Bowl, which is typically the most-watched TV programme of the year in the US.

The National Football League’s (NFL) championship game took place just under a month before the start of the IndyCar season. The series subsequently debuted on Fox with the most-watched non-Indy 500 race since 2011.

As mentioned earlier, the marketing campaign also contributed to massive numbers for this year’s Indy 500 and that momentum carried over to the next two races on the schedule: Detroit and Gateway.

Evidently, when Fox puts its full marketing weight behind IndyCar, viewers tune in.

Why has Fox bought a stake?

The deal not only makes Fox a major shareholder in IndyCar but also includes a multi-year extension of the pair’s broadcast pact, which BlackBook Motorsport understands will now run until the end of the 2030 season.

Fox has gained long-term stability to evolve the product and promote the overall offering more consistently but, crucially, now has an ownership stake that means it will further benefit from any resulting growth in the series.

Fox may have taken cues from its partnership with the Ultimate Fighting Championship (UFC), having held the broadcast rights to the mixed martial arts (MMA) organisation between 2011 and 2018.

During that time, Fox helped turn the UFC into a commercial behemoth but was ultimately powerless to stop it moving to ESPN, where it continued to grow.

For context, the UFC’s enterprise value was pegged at US$12.1 billion in 2023, which was an extraordinary rise for a sports property that had never been on commercial TV before its Fox deal.

Fox, which already co-owns the United Football League (UFL), doesn’t want the same thing to happen again with IndyCar.

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How will IndyCar benefit?

The series is set to get a marketing overhaul, which will address a long-standing shortfall in this area.

While IndyCar undoubtedly benefited from its coverage on former media partner NBC, the championship’s visibility suffered due to inconsistent platform distribution and limited promotion.

Penske did publicly commit to spending US$17 million on marketing for the 2023 season. However, that figure pales in comparison to the cost of the three adverts aired by Fox during this year’s Super Bowl, each reportedly shown in a slot commanding a fee of US$8 million.

Indeed, Penske has faced criticism for being too conservative when it comes to marketing spend, most notably from Michael Andretti who urged ‘the Captain’ to “sell the series” if he was unwilling to invest.

As well as Andretti’s blunt comments, McLaren Racing chief executive Zak Brown has been vocal about the need for change. Unsurprisingly, he welcomed the news of Fox’s investment.

“They believe in the series and its potential, and they’ve already shown the marketing power they can bring to grow the sport and its exposure to new fans,” said Brown.

“Eric [Shanks, chief executive of Fox Sports] and I have had many conversations on his ideas to broadcast and promote IndyCar, and there will be a lot of exciting things to look forward to.

“With this new enhanced commitment with Fox, I’m more confident than ever in where the series is heading into 2026 and beyond.”

Zak Brown (right), pictured here with Pato O’Ward, is a vocal presence in the IndyCar paddock and has consistently pushed for better marketing of the series (Image: Getty Images)

This highlights the tonal shift IndyCar needs as a whole, so expect to see more consistent, year-round marketing rather than activity peaking only at the Indy 500.

Opportunities should also present themselves for the series on the international stage, with the first key step being the finalisation of a race contract in Mexico City. BlackBook Motorsport understands that negotiations have hit a bump, but expectations remain positive that a deal will be closed.

Beyond this, IndyCar arguably has more international growth potential than domestic rival Nascar. Notably, IndyCar sits on most of the major broadcasters in Europe and boasts a roster of high-profile drivers from the continent.

As a US-based media rights partner, Fox may previously have had little interest in pushing international expansion. But with its deeper involvement, that growth now directly benefits the company. While IndyCar has talked a big game about creating international events with very little to show for it, this is an area where Fox can provide real strategic guidance.

With both parties aligned on the same objective, it will be fascinating to see how IndyCar changes with the Fox machine behind it.