MOORESVILLE, N.C. — After more than a year of negotiations with team owners and other stakeholders in the series, IndyCar announced on Monday its charter system.
Owners of 10 teams have accepted charters for 25 entries competing in North America’s premier open-wheel racing series, beginning immediately.
“This is an important development that demonstrates an aligned and optimistic vision for the future of our sport,” said Penske Entertainment Corp. President and CEO Mark Miles. “I want to extend my sincere appreciation to our team owners for their collaboration and ideation throughout this process. Ultimately, we’re pleased to have a system in place that provides greater value for our ownership and the entries they field.”
This is the first charter system to be introduced in NTT IndyCar Series history. A chartered entry is guaranteed a starting position on the grid at all NTT IndyCar Series races, excluding the Indianapolis 500. An entry also must be chartered to qualify for the annual NTT IndyCar Series Leaders Circle program — an annual award program, which compensates the 22 top finishers in the prior year’s NTT IndyCar Series championship.
The terms of the initial, long-term charter agreements are committed through the end of 2031.
Charters were extended to team owners based on full-time entries over the previous two seasons with a maximum of three awarded per team.
The chartered 2025 IndyCar teams include AJ Foyt Enterprises with two entries, Andretti Global with three, Arrow McLaren with three, Chip Ganassi Racing with three, Dale Coyne Racing with two, Ed Carpenter Racing with two, Juncos Hollinger Racing with two, Meyer Shank Racing with two, Rahal Letterman Lanigan Racing with three and Team Penske with three.
“I appreciate the efforts made by the IndyCar and Penske leadership groups as well as all the owners to get this charter system started,” said Larry Foyt of AJ Foyt Enterprises. “It is incredibly challenging to get a large group of owners to agree on something, and certainly there was some give and take but, in the end, I believe this is a path that is beneficial for all of the owners and for IndyCar, while also maintaining the availability for open competition.”
Prior to the Bommarito Automotive Group 500 at World Wide Technology Raceway in August, Miles explained the reasoning behind the charter system to NBCSports.com.
At that point, Miles had met with each IndyCar Series team owner privately to discuss the outline of the charter system.
“We asked if they could give us the first step, which is sort of some registration information about details of who owns what amounts of which teams,” Miles said at the time. “And then they’ll have to designate kind of the official representative to us and some of that sort of registration stuff by the end of August.
“But we haven’t set a deadline. We’re getting comments. I called most of the team owners this past week and seems like they got to get through it. There is some legalese in it, but it seems like it’s well received.”
The 2024 NTT IndyCar Series season concluded with the Big Machine Music City Grand Prix at Nashville Superspeedway on September 15. The charter system was not announced then, as the focus was on crowning the season-long champion, but team owners at Nashville had already agreed to the structure.
“We’ll sign it,” McLaren Racing CEO Zak Brown told a private group of reporters that included NBCSports.com, The Associated Press, Indianapolis Star and Motorsport.com on September 15. “I have found that there’s nothing material in there that drives for us any substantial incremental value. So, if the hype was this is going to be a big thing and be great for the foundation of an IndyCar team, I haven’t seen those benefits. So, I’ll sign it.
“It’s not bad. I think it’s good that it’s a first step. But there’s no revenue-sharing model.”
Some team owners sought guaranteed starting positions for the 33-car starting lineup for the Indianapolis 500, but that was met with bitter resistance from the fan base that follows IndyCar. To many of those most vocal critics, it reminded them of the 25-and-8 rule that was implemented by the Indy Racing League in 1995 that led to CART teams boycotting the 1996 Indianapolis 500, which guaranteed 25 of the 33-car starting positions to the top 25 teams in IRL points. The remaining eight positions would be CART teams that had to qualify for the race.
That led to the infamous split between CART and the IRL, with many fans turning on the sport and never coming back.
“At Indy, I don’t have a guaranteed spot,” Brown said. “It really only helps, from my perspective, in an event if a race is oversubscribed.
“If we had a shunt in qualifying or a shunt like we had yesterday and couldn’t qualify, I’m protected to make the race.
“From what I can see, that’s what I’m getting.”
IndyCar championship team owner Chip Ganassi was part of the NASCAR charter system before he sold his charters to Trackhouse owner Justin Marks in July 2021, beginning with the 2022 NSCAR Cup Series season.
Ganassi believes IndyCar’s charter system is a good first step to protecting a team owner’s value and equity in creating a team.
“Every single question that everybody in the IndyCar paddock has had about charter system is like a repeat of 10 years ago when they did NASCAR charters,” Ganassi said. “You feel like just saying to somebody, ‘Don’t worry about that. This is what will happen.’ It’s just a carbon copy.
“They are all valid questions. It’s not like they don’t know what they’re talking about, but they’re all questions with anyone with a modicum of business acumen would ask. But the net positive is just incredible.
“It’s a really good thing. And it’s going to add value to every team and, granted, it’s not the size of the NASCAR charter guarantee. But it’s a hell of a start. It’s a hell of a running start. So, I think it’s a great thing.”
To break it down in its simplest form, the key numbers to remember are 25, 3, 22, 27.
The 25 represents the total number of charters. No IndyCar Series team owner can have more than three charters.
Of those 25, entrants will compete for the 22 Leaders Circle positions. The Leaders Circle pays over $1 million to each entry in the top 22 in points that competes in every event of the season.
The 27 indicates the total number of cars that can compete in each race, except for the Indianapolis 500 and its traditional 33-car starting lineup.
That doesn’t mean IndyCar is discouraging new teams from participating in its races. If two “open” cars show up for a race (outside of the top 25 that have charters), the 25 would be in the race along with the two extra cars.
If four “open” cars show up for a race, then the 25 charters would be in the race and the four non-charter entries would have to qualify for the two positions in the starting grid.
May 28, 2023; Indianapolis, Indiana, USA; IndyCar Series team owner Roger Penske (left) with IndyCar CEO Mark Miles after the Indianapolis 500 at Indianapolis Motor Speedway. Mandatory Credit: Mark J. Rebilas-USA TODAY Sports
IndyCar owner Roger Penske with Penske Entertainment president and CEO Mark Miles befoe the start of the 107th Indianapolis 500 last year (Mark J. Rebilas/USA TODAY Sports Images Network).
“The importance of a charter is the teams now have a valuation of their operation,” Miles said. “They own an asset that’s this charter, this agreement, which, at the moment, looks like it will be for seven years.”
The charters must be applied for, and approved, by IndyCar. Teams will not need to pay IndyCar for the charter.
If a team wants to sell its charters to a new team that wants to join the series, then the team that holds the charter will have equity in what they have accumulated and built over the years.
It’s pretty much the same in NASCAR. In other professional sports, a franchise system is used.
If a city such as Charlotte, North Carolina, or Nashville, Tennessee, wants a Major League Baseball team, it can’t just start one up and take the field against the New York Yankees or Los Angeles Dodgers. It would have to gain approval from other MLB team owners for an expansion franchise with a hefty fee or purchase an existing MLB team based in another city and relocate that team to its city.
In the past, IndyCar Series team owners have built their operations, competed on the track and acquired a tremendous amount of resources, but when the team owner wants to get out of the series, the team does not have a set value.
“There are any number of scenarios,” Miles explained. “For example, if Ed Carpenter has two charters and wants a third and somebody wants to sell one, an existing team could buy a third.
“But it could be a new team.
“All of this requires approval when there’s one sold.”
By contrast, team owner Chip Ganassi fielded five full-time entries in 2024. Under the new system, he can own only three charters. The other two cars would not be eligible for charter consideration.
A new team owner could start a team and participate for the same value (outside of the Leaders Circle payments) as the team looking to leave the series or sell one of its charters.
“This is my No. 1 thing out of all of racing right now,” team owner Michael Shank of the two-car Meyer Shank Racing told NBCSports.com last month. “We have got to get this done for the IndyCar ownership groups.
“It is a tough, tough deal here. It is not NASCAR. We do not have a kind of the valuation that NASCAR does today. We need this for everybody that has invested heavily in IndyCar.”
Miles believes the implementation of the charter systems is another sign of IndyCar’s growth, and how it protects those teams that have invested in the series.
“The other thing that’s important about charters is it’s only the 25 charter cars that can compete to be in the Leaders Circle,” Miles explained. “The Leaders Circle will continue to pay the top 22.
“Those that don’t make the Leaders Circle will still have an asset they can sell — or they can try to get in the Leader’s Circle. And they also are straight in, on the grid for all the races except for the Indianapolis 500.”
The charter system is much more important for the team owners and IndyCar Series leaders than it probably is for the fans. It’s a business alliance that protects the business of the IndyCar Series.
Fans may prefer to see a series based on purely open competition, but that’s a business model that may no longer be sustainable because of the costs of racing and the dependence on multi-million-dollar sponsorships to provide competitive racing operations.
But the charter system and its three-cars-per-team limit has already had an impact on the 2025 lineup as earlier this week, Chip Ganassi Racing driver Marcus Armstrong announced he was leaving the team to join Meyer Shank Racing. With Armstrong’s departure, CGR must trim one more entry out of the four that are left for next season.
Beginning in 2025, Meyer Shank Racing will have an engineering alliance with Chip Ganassi Racing.
“The charter agreement, to me, is the single-most important piece for the future of the series,” Shank said. “I’m grateful that we all came together on this and thank the Roger Penske group for working with the team owners for getting it done.”
