Penske Entertainment is getting closer to presenting its team owners with what it hopes will be the final version of its first charter program.
The company, which owns the NTT IndyCar Series, is aiming to share the initial framework of the charter with its entrants leading into its marquee event at the May 26 Indianapolis 500. Meaningful progress has been made with the initiative, but an equal number of questions and ramifications must be considered before it’s ready to execute.
“There’s been a lot of conversations; we’ll have more,” Penske Entertainment CEO Mark Miles told RACER at the recent Thermal Club event. “I think everybody understands it may not be exactly what every single individual wants, because they don’t all want the same thing. But the important thing is getting it started and hopefully that’s before the 500.”
Modeled in some ways after NASCAR’s charter system, which was introduced in 2016, IndyCar’s charter intends to create monetary value and security for its team owners who populate the series with their entries for the entirety of the annual championship.
In contrast to Formula 1 and NASCAR, whose teams are in a direct business relationship with their series, and whose entries have become highly lucrative commodities for the owners to sell, IndyCar teams have come and gone for most of the century without a price placed on their entries and the related access to the IndyCar field.
The former Carlin Racing IndyCar program was a perfect example of the situation, where the British team bought cars, assembled a respected two-car effort, competed for four seasons, ran out of funding, and sold its cars and equipment to another team. But since its participation took place prior to the formation of a charter system, its entries held no commercial value and they had no access to sell. Carlin disappeared without turning a profit upon its exit.
With an eye to applying a more business-like structure between the series and its independently-owned teams, the formation of a charter system was spoken of as an ambition by Roger Penske when he purchased the series and the Indianapolis Motor Speedway late in 2019. The motivations behind the program were varied.
One major facet was establishing a structured entry process that would reward IndyCar’s long-standing entrants; it would serve as the antidote to allowing newcomers the same opportunity to compete in races like the Indy 500 while having no ‘skin in the game.’ The perceived imbalance was cited as an issue that could be addressed by issuing charters that provided the established entrants with a guaranteed place for their cars on every grid.
Brand-new teams were spoken of as being able to buy their way into the series, provided there were enough charters made available, to tie those teams to IndyCar through investment in the series.
Using charters as a type of deed for team owners to not just hold and use as an ensured gateway to compete in the series, but to sell and profit from upon transferring to another entrant, was the other key point of interest mentioned by Penske.
Towards the end of 2023, Penske Entertainment pitched a previous and more detailed version of the charter to IndyCar owners. It was rejected within 24 hours after the series attempted to take $1 million per entry from the team owners. In response to the harsh rebuke, the initiative was parked for review after the 2024 season was completed.
But the delay to the next offseason was quickly reconsidered, and with renewed enthusiasm to try and implement a charter system by the Indy 500, the series has been proactively meeting with team owners while aiming to launch a more basic charter in the coming months.
“Don’t worry about everybody getting everything that they might have thought should be a component of it; let’s get started,” Miles said. “Then that will require it not trying to boil the ocean. So hopefully we’ll get to that point.”
The latest iteration of the charter system would make 25 charters available for the series’ entrants, with a limit of three charters per team. Determining the eligible entries for the 25 charters has been done by using the results from last season’s Entrants’ championship.
In 2023 and again in 2024, IndyCar has featured 27 full-season entries. Under the three-car limit, only the Chip Ganassi Racing team, which fields five entries, would miss out on having all of its cars covered under the charter program.
In running through the list with two IndyCar officials, both pointed to the new No. 4 Ganassi Honda driven by Kyffin Simpson and the preexisting No. 11 Ganassi Honda driven by Marcus Armstrong, which was the team’s lowest-finishing car of its four full-timers from 2023, as the entries that would not be covered under the 25 charters.
“The concept is no more than three a team. Everybody who ran all year last year, therefore, minus two that didn’t make it because of the limit, would be the 25. They’d have charters,” Miles said.
The 25 would have guaranteed starting positions at every race, with the Indianapolis 500 being the only possible exception. The subject of guaranteed starting spots at the Speedway is the one area Penske Entertainment has balked at discussing since it received a wave of critical responses from fans.
With the Indy 500 starting positions holding as an outlier that awaits resolution, the 25 guaranteed starters would be locked into racing everywhere else on the schedule.
With the possibility of one or more new teams joining the series in 2025, which could extend the full-season entry list to 29 or more, the charter system could also have a significant impact on any regular events where IndyCar it looking to place a cap on how many entries can start each race.
As Miles explains, if the entry list were to grow beyond 27, the non-charter entries would vie for the two open spots and those who are slower than the 27th-fastest qualifier would be sent home.
“We’ll probably have a limit of 27 other than at Indy,” he said. “Twenty-five would be in. So you tell me how many more there are, and if it’s more than two more, they’ll have to qualify.”
Outside of the Indy 500 and its 33 starters, the series has been able to accommodate all 27 entries on the road and street courses, and add a few more at select events. But in some cases, there are only 27 pit stalls available for use – such as at Mid-Ohio and Toronto – which would thrust Ganassi’s two non-charter cars, plus any new entrants without charters, or current teams that elect to add an extra race-by-race entry, into a battle to earn the right to stay and play on after qualifying if 28 or more entries are filed.
Connected to the 25 charter entries is the ability for those 25 to be eligible for Penske Entertainment’s 22 Leaders Circle contracts.
The $1 million Leaders Circle payouts, which serve as guaranteed prize money, have been earned since the program’s formation by those who place within the top 22 in the Entrants’ championship. Except for some light restrictions, almost every entry since the program was started in the 2000s has been allowed to vie for one of the coveted contracts.
Under the charter system, the 22 Leaders Circle contracts wouldn’t be available to non-charter entries.
“The charter gives them the right to annually try to get in the Leaders Circle for the money,” Miles confirmed.
Penske Entertainment is driven by a sense of urgency to finalize the program and bring the charter system to life, but the hardest work ahead must be resolved before it’s ready.
Of the pertinent items to cover, will the series attempt to charge its teams for each charter, and if a charter is sold, would Penske Entertainment receive a share of the sales? At the moment, both have been characterized as being 50-50.
RACER understands the forceful rejection of the last charter concept due to the $1 million price tag per entry has not deterred some within the company from wanting to make another run to get paid for the charters on the front end, and on the back end through an income-generating stipulation where Penske Entertainment would receive a percentage of from every future charter sale.