After Frank Wheeler, one of the original founders, committed suicide on May 27, 1921, Jim Allison bought his shares making Allison the largest stockholder at 56.75%. Carl Fisher had moved to Miami Beach where he was busy developing Miami Beach and was planning an upscale development in Montauk, Long Island. Having lost interest in the Speedway and needing money for his real estate developments, he approached Allison to purchase his shares, however, the valuation was problematic. Allison wrote to Fisher, “Regarding the fair price for your stock in the Speedway, it looks that you are looking at it from slightly the wrong angle. If you have your way about it, the track should be valued as a simple real estate proposition.” Allison estimated the maximum value of the real estate was $326,400 and that might be ten percent high. In 1922, Allison unsuccessfully attempted to find a purchaser for the track as an operating entity at $648,000.
Despite the 1923 Indianapolis 500 being the most successful since its founding with an estimated 150,000 in attendance, the owners were not sure of the track’s future. Fisher explained in the May 31, 1923, Indianapolis News, “We have accomplished what we set out to do when we built the speedway here. At the time it was built American cars were far inferior to European race cars. Our object was to establish a racing institution in Indianapolis where we could make tests on American racing cars and build up the American cars to the standard of the European cars. The last few 500-mile races have proved that we have accomplished our purpose.”
There were two underlying issues. The first, which caused the owners great angst, was a campaign initiated by Perry Faulkner, the American Legion’s Indiana commander, to make “all commercial sports” in Indiana illegal on Memorial Day. He believed that to run a race was not in keeping with honoring America’s war dead. While The Robert L. Moorhead Memorial Day bill was pushed through the Indiana legislature, it was vetoed by Indiana Governor Warren McCray after Indiana attorney general U. S. Lesh issued an opinion that the law was unconstitutional. McCray’s veto was upheld by the Indiana Senate with a vote of thirty-three to five. This sentiment could negatively impact the valuation of the Speedway as an on-going entity.
Additionally the Speedway track’s and equipment needed approximately $200,000 worth of repairs. Given the growing size of the crowds, they needed to add at least two additional stands, improve the garages, and provide modern field equipment. The three remaining shareholders would need to finance the improvements. Given Fisher’s investments in Miami Beach and Montauk, providing his share of the funds would be challenging.
On June 11, 1923, Fisher relinquished the presidency of IMS and Allison became the president in addition to being the largest stockholder. Like Fisher, Allison spent considerable time in Miami Beach and the two would travel to Indianapolis for the race, but the daily decision making had been turned over to others, primarily Ted “Pop” Myers.
Still seeking a purchaser for the Speedway, in 1926 Fisher approached Tommy Milton, the first two-time winner of the Indianapolis 500, to sell the property for $100,000 less than an offer from a developer. Milton quickly declined. He believed that if owning the Speedway wasn’t fun for Allison and Fisher, it would not be fun for him. Instead, he expressed an interest in investing in Montauk.
Fisher was already overextended supporting the development of Montauk and Miami Beach when the Great Hurricane of 1926 hit Miami Beach on September 11, 1926. He desperately needed money to support his efforts at Montauk and to begin rebuilding Miami Beach. Meanwhile, Jim Allison had suffered a heart attack and was in declining health.
In July 1927, World War I flying ace and former race driver Eddie Rickenbacker approached Carl Fisher about purchasing his shares in the Speedway. Fisher was interested and wanted $500,000 for his 31.25% interest in the Speedway. They were unable to make a deal. On September 1, 1927, a consortium headed by Rickenbacker purchased a majority interest in the Speedway. The amount of the purchase is frequently reflected as $750,000, however, the Indianapolis newspapers reported the transaction was believed to be for $1,000,000. Perhaps the differential is the continuing minority ownership by Fisher and Allison.
To support the purchase, $700,000 in mortgage bonds were issued with interest at 6.5% with a 1942 maturity. A new legal entity, the Indianapolis Motor Speedway Corporation was established, and the property was transferred from the Indianapolis Motor Speedway Company. The deed transferring the 433 acres and improvements was signed by Jim Allison and Ted “Pop” Myers. The new board of directors consisted of Rickenbacker as President, Ted Myers as vice president and general manager, Omer Rains of Detroit as secretary and treasurer, Indianapolis attorney Paul Y Davis, vice president of Indiana National Bank Edward D. Moore, Carl Fisher, and James Allison.
Rickenbacker told the Indianapolis Star on September 2, 1927, “My heart has always been in the racing and the automobile business. We will continue to keep the track as a great laboratory for any of the automobile factories that care to use it in the experiments for which it was used privately for years. It has long been a dream of mine to have a part of what is admitted to be the greatest race in the world.”
Amazingly, rumors started that the track would be moved to Detroit, Rickenbacker’s base of operation. Ted Myers quickly responded, issuing the following statement in the November 20, 1927, Indianapolis Star. “There will be a race in 1928, the same as usual. It is absurd to think that the track could be moved. It is of brick and concrete construction and could not be moved.”
Nobody could predict the challenges that Rickenbacker, as president of the Speedway, would face in the upcoming years—the October 1929 stock market crash, the Great Depression, and World War II which would shutter the track.