IndyCar formally announced a franchise-like “charter system” Monday, following NASCAR’s lead by giving team owners a tangible asset designed to promote the series’ health.
A total of 25 charters will be distributed to a group of 10 current team owners who have fielded full-time cars over the past two seasons, capped at three per organization. Like NASCAR, the charters guarantee entry into each event — with a notable exception being the Indianapolis 500, in which starting spots still must be earned.
IndyCar owner Roger Penske, who also has a team in the series, leaned on his experience with NASCAR to help shape the charter agreement for IndyCar owners.
“The charter agreement, to me, is the single most important piece for the future of the series,” Meyer Shank Racing co-owner Michael 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.”
Though there’s been much debate about the current charter discussion in NASCAR — with two teams currently holding out from signing their renewals over protest of the terms — there’s no question the basic principle of a charter is a positive.
Prior to charters, a car owner could spend tens of millions of dollars but then go out of business if team sponsorship was lost — therefore leaving someone with only their race shops and equipment to sell.
But with charters, team owners are guaranteed an asset that they can choose to sell or grow; in NASCAR, the first charter was sold for $1 million and have been sold for as much as $40 million, with many valued higher than that.
“It is incredibly challenging to get a large group of owners to agree on something, and certainly there was some give and take,” Larry Foyt of A.J. Foyt Enterprises said. “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.”
IndyCar will begin a new TV deal with Fox next year. The initial IndyCar charters will last for seven years before they can be renewed, similar to the short-term deals NASCAR teams have signed.
“This is an important development that demonstrates an aligned and optimistic vision for the future of our sport,” said Mark Miles, president and CEO of Penske Entertainment. “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.”
(Photo: Donald Miralle / Getty Images)
