IndyCar Charters–Great or Not So Much?
For better or worse, IndyCar now has a charter system. This is similar to NASCAR’’s charter system that has been in existence since 2016. I have stayed mostly silent on this topic for one main reason – I didn’t feel I knew enough about it to speak halfway intelligently on it. Plus, nothing was official until yesterday morning. Now that it has become official, I think I understand enough about the basic framework to at least discuss it – although I’m not sure what my overall opinion is.
Think of it as a tangible ownership that a team owner can sell to another team, if they decide to close up shop for whatever reason. It buys a team a seat at the table. Some have compared it to owning an NFL franchise. I think it may be more like owning a Permanent Seat License (PSL). Whenever you decide you want to stop buying season tickets, you can sell your seat license to someone else.
To read The statement from Penske Entertainment President Mark Miles, it sounds like all owners were unified and in complete agreement on the charter system. To read the article from Marshall Pruett at Racer.com, that was not entirely the case. Two of the ten fulltime owners had balked and were refusing to sign on the dotted line as recently as this past Friday. Apparently, Roger Penske had conversations with both and encouraged them both to sign off on the final proposal. By the end of the weekend, they had.
In all honesty, I can’t tell if this is a good thing or not. It may be years before anyone knows. This looks ripe for the law of unintended consequences. There are some things that make a lot of sense to me, but other parts of it make me scratch my head.
The biggest question I have is why did the Dale Coyne Rule remain in the final draft? If you haven’t been following the charter story, there is a clause in there that allows no more than three drivers per entry in any given season. This past season, Dale Coyne had four drivers in the No. 18 entry and six in the No. 51. That will not be allowed going forward under the new charter system and I have not heard a good explanation why that is.
Dale Coyne could not have fielded two full-time teams without putting several different drivers with budget. It also brought a lot of drivers into the series for a few races and exposed them to other teams that might be in the market for a new driver in the future. What if a team starts with Driver A in the car, but Driver A gets injured early. Driver B might be a very suitable replacement for the next race, but has a commitment to another series for the rest of the season. That forces the team to move on to Driver C, still early in the season. Maybe Driver C isn’t working out and the sponsor is unhappy. Under this plan, the team is stuck with Driver C.
I am unsure what happens if the team makes a switch to Driver D. I have not read the entire final draft. If someone knows the answer to what the consequences are, I would be very interested to know.
Teams were issued charters based on the number of entries they fielded over the past two seasons. No team was issued more than three charters. There are only 25 charters total. A team can still field a car without a charter, but they will not be guaranteed a spot on the grid that has been capped at 27. With PREMA bringing two cars for next season and not being issued a charter, if 28 cars or more show up on any given weekend. One of the non-chartered cars will go home. Has IndyCar reached the point where we can afford to upset a sponsor by sending a car home?
NOTE: None of this applies to the Indianapolis 500. All cars will still be required to earn their spot in the Greatest Spectacle in Racing.
This is why Chip Ganassi Racing is scaling down. Marcus Armstrong has already moved over to Meyer Shank Racing. They can still run four cars, but only three will be protected.
I am also confused why PREMA was not issued any charters. They made their intentions known quite a few months ago. Will they ever be issued charters? Will they have to buy a charter from a team when they shut down, if they want one? Does this not discourage participation by new teams?
So far, I’ve identified new obstacles for young aspiring drivers and new potential teams that did not exist before Monday. Oh, and if a team wants to run an extra car like Rahal did at Portland, they will be in danger of being sent home.
A charter does not improve an entry’s chances of making the Leader Circle. That cutoff line is still around 22, even though there are 25 charters in existence.
I get the fact that a current entry owning a charter is guaranteed to make a race, and that this now provides a vehicle to allow an owner to cash out when they decide they are none with the racing game. But there is even an angle for that. Penske Entertainment still owns a portion of all charters and they get a portion of the sale of any charter. If I was a team owner, I’m not sure I would love that idea.
Another question I have…is there anything that prevents a team owner from acquiring a fourth charter? No more than three were issues, but if Chip Ganassi wanted to pay top-dollar for one of the Juncos Hollinger charters to protect the remaining four entries he currently still has, is that allowed?
Right now, there are still a lot of questions on the charter system. Even though all ten owners eventually signed off on it, it’s obvious that not all were thrilled with this. You know Team Penske is fully on board, and Chip Ganassi was very vocal in his support. Ed Carpenter and Larry Foyt both represent some of the smaller teams. I saw no supportive quotes from Michael Andretti or Zak Brown. That doesn’t mean they are opposed to it, but I never saw any quotes at all from them mentioned.
Monday night, I saw a lot of comments on social media from people wondering why anyone would object to a charter system. While I recognize a lot of positives, I also have many questions about this.
This has been heralded as one of the greatest days in the history of the NTT IndyCar Series. It may be, but I would like for someone to explain why.
George Phillips
Oilpressure 
September 25, 2024 at 5:16 am
One huge negative of the charter system is that it has eliminated two top cars from the series. Ganassi going to three cars from 5 is definitely a loss for the series. Also when Penske bought the series I thought it would be a good thing. Now with their cheating and iron fist running everything and the lack of joy and fun they bring to the series I feel Penske buying the series was the worst thing that could have happened and I’m not on board with their charter system either.
September 25, 2024 at 5:26 am
Charters were awarded based on entries for the 2023 season. That is why PREMA didn’t receive one.
September 25, 2024 at 5:59 am
It’s not very encouraging for new teams like Prema is it? Is it just a way to limit entries so current teams are “worth more?” will it effectively end any meaningful “bump day” activity in the future?
September 25, 2024 at 6:31 am
I understand the team owners wishing to create financial value for themselves.
I agree however that there will be hidden consequences.
Your point re driver changes means PE will need some form of driver contract body to facilitate driver changes over and above the maximum allowed if such a situation occurs.
I’m interested in where budgetary responsibly lies in certain areas. For example marketing. This to me lies with the series owners yet if they spent $100m the charters would benefit through additional revenues coming from sponsors. Will the series expect some financial recognition to their investment. On the other side of the coin. If the series does not spend what is deemed sufficient amounts on marketing will the charterers ( excluding one team ) become restless and organise themselves in argument with the series owners.
As long as the racing is good I’m relaxed.
September 25, 2024 at 8:18 am
IndyCar does things that make one scratch their head. The hybrid thing was a cost burden on the team owners and for what? To attract prospective OEMs? How’s that working out?
The charter thing is intended to give owners some skin in the game, but doesn’t that only work if someone on the the outside looking in sees value in said charter and is willing to spend big bucks to buy it from that owner one day? If an owner decides to retire from the sport, and a prospective owner says, “I’ll buy your shop and equipment, but your charter isn’t worth any money to me.” What’s IndyCar do then? Turn away a potential owner/competitor? I guess I don’t fully comprehend the whole thing. I’ll admit that.
September 25, 2024 at 8:51 am
That’s the risk they take however the charters have not cost them anything directly. They get $1m per annum instead. Yes. It’s cost massively in terms of the workshop and infrastructure. This is the opportunity to get that back. If the series is healthy then I see other interested parties looking to buy existing charter teams and there already is one, Prema.
September 25, 2024 at 8:57 am
Professional sports over their still relatively young history have proven that the cartel-like nature of franchises/charters creates value for their holders and, on some level) prestige for the granting organization. Of course, this only works as long as there is demand from the outside to participate in the sport, otherwise the values crash to effectively nothing (which is why pro sports teams folding generally portends doom for their league). Racing can be a fickle sport (the Manor F1 team folded not even a decade ago) and Indycar itself has quite often not seen full time grid sizes as large as even 25, so there does seem to be some risk to this move if the series cannot keep demand from potential owners high.
That said, I don’t like charters because they are antithetical to the traditional nature of auto racing competition. I don’t like the idea of limiting grid size for reasons beyond track space and safety. And I especially don’t like the “Dale Coyne Rule” because it is asinine (though I would be shocked if it did not have injury contingencies). Now, I also say these things as someone who risks essentially nothing in the sport.
September 25, 2024 at 10:05 am
Remember the talk of Abel Motorsports, Pratt & Miller, and Dreyer & Reinbold, having aspirations of being fulltime IndyCar teams? Yeah, that’s all over now.
This series continually does things that push me away and leave a nasty taste in my mouth.
September 26, 2024 at 3:57 am
They can buy an existing team if one is for sale.
September 25, 2024 at 10:47 am
a “shadow” Indycar?
a Charter President?
a Charter Union?
September 26, 2024 at 11:39 am
Sending entries home at tracks does only make sense when the pitlane is full.
If the track has got pitlane space for more entries than 27, these should be allowed to start. Superspeedways might look empty that way. I would not rule out a return of the Series to a superspeedway during the running time of the new charter.
Also, the hardest hit of this goes to the Ganassi organisation who now reacts to this by closing down 2 successful fulltime entries. A sanctioning body should protect a longstanding team from such a development instead of willfully letting it go through it. Their rivals might even benefit from this unvoluntary restructuring.
Also, it looks like the pay driver keeps the seat whereas the more proven talents don’t.
The so-called Coyne rule is most likely also going to favor drivers with more budget ober drivers with more talent but less budget because it’s way harder to add a car should a driver with budget appear once all chartered seats are already taken.
It must feel pretty weird to Prema that they are now effectively unable to earn a Leader’s Circle program for their 2nd season by scoring enough points in the 1st.
Also, it’s way harder for those Indy-only teams to move up to fulltime competition.
Are the chartered teams going to have it easier to find sponsors over the non-chartered teams? Most likely that.
September 27, 2024 at 10:05 am
Chip was the first team owner and maybe the most vocal in support of the charter system. Over the last twenty years his average entry per season is 3.45 cars excluding any one off 500 entries. Some years he ran two cars.
Prema joined the series knowing exactly the situation regarding the charters.
September 27, 2024 at 9:37 am
I wouldn’t blame Prema if they were a ‘one and done’ next season. I don’t like the fact that cars may not make a race even if they’re are plenty of pit boxes to support them.
September 27, 2024 at 10:01 am
They will make every race apart from possibly the 500 if more than 33 cares entered and they were to be bumped. Otherwise you 25 charters and 27 entries. 27 allowed to race.