The recent Brickyard Grand Prix weekend at the Indianapolis Motor Speedway played host to a meeting between Penske Entertainment’s leadership and the owners of the teams who comprise the NTT IndyCar Series.
Among the topics discussed at the private gathering was one of growing interest for all involved in the series as the subject of creating an expanded Leaders Circle partnership system, similar in concept to the former CART IndyCar Series franchise system, or NASCAR’s charter system, was presented.
Unlike Formula 1 or NASCAR, where teams’ guaranteed access to compete in each race is a commodity that holds exceptional value, IndyCar does not have a business structure in place where the small business owners who compete in the series own their access; teams can come and go and new entries are welcome with no buy-in fee.
IndyCar’s Leaders Circle program is the one business link between the series and its teams where the top 22 finishers in the annual entrants’ championship are offered a guaranteed prize money package worth $915,000 in exchange for committing to compete in every round. The contract is not transferrable from one team to another as a commodity, and it can be lost if a team’s entry falls outside of the top 22.
Soon after purchasing the series in 2020, Roger Penske expressed an interest in developing some form of charter-like system where IndyCar’s team owners would hold some form of equity with their entries, and after the subject fell largely silent for quite some time, it was included in the Brickyard meeting agenda where a few concepts were floated for feedback.
“The first thing is I thought it was a terrific meeting,” Penske Entertainment CEO Mark Miles told RACER. “It was about 15 subjects; all of them really had to do with metrics about how we’ve got a lot of momentum, there’s a lot of growth in all the audience metrics and the like. How the investments we’ve been making are paying off, and we thanked the teams and drivers for theirs. And we talked about next steps on lots of things.
“No plan was presented for charters or anything like that. We did talk about the shared objective of creating a system which would allow the key teams – and I’m not trying to define them because that is one of the things that would have to happen; they have to be defined – but for the key teams to lock in value and be able to, over time, have an economic interest in our growth.
“So that topic was brought up. Several things that would have to be thought through were identified. Which teams? How many? What year? And the point was to say, ‘We haven’t forgotten about prior conversations about this topic,’ and we are looking forward to, in the weeks and months ahead, continuing discussions and individually to get lots of feedback from different teams over time. It was a good conversation that the key teams are eager to be part of the process to think it all through and eventually come up with something.”
IndyCar introduced nothing that was remotely formal or final in the meeting, but some interesting ideas were shared – and commented on by team owners – that could form the framework of a future system that is heavily modeled on the Leaders Circle program. At present, teams are limited to having three entries eligible for the Leaders Circle, with exception of Andretti Autosport, which has a fourth entry grandfathered into the program. Chip Ganassi Racing, which also fields four full-time entries, will have all four of its cars place well inside the top 22, but the fourth entry is not eligible for a contract because it isn’t grandfathered, and RACER understands the future program could place a strict three-entry limit for all teams with no grandfathering of additional entries into the program. The same number of 22 Leaders Circle contracts was mentioned, but with a twist where those 22 entries could be guaranteed to start at every race, including the Indianapolis 500.
Although the 22 guaranteed entries would serve as 22 individual commodities owned by those teams, an at-large concept was explored where a certain number of non-Leaders Circle teams would be welcome to compete in the series, and if they were to finish inside the top 22 in entrants’ points, a meaningful seven-figure payment would be made to the Leaders Circle team(s) who fell out of the top 22 in this merit-based competition.
Other related items were also raised, but as Miles reiterated, everything about the subject is conceptual at this stage. “I would just emphasize that those kinds of things were used as examples of things to think through,” he said.
IndyCar is also searching for an original name to refer to its entry equity program that isn’t a derivative of another series’ system.
“People use, ‘charter,’ ‘memberships,’ ‘franchises,’” Miles added. “It might simply be a way to formalize and create equity in the Leaders Circle. We’re not trying to knock off anybody else’s system. We’re trying to work through what could make sense in the IndyCar system and culture and allow the key teams to have an asset value that grows as the series becomes more successful.”
The biggest question left to answer regarding an IndyCar entry equity system is whether its “key” teams will be asked to pay for each entry at some assigned value point, or if the series’ longstanding entrants will be awarded those commodities by Penske Entertainment.
“The short answer is no,” Miles said. “We have not arrived at anything on any of that. I can imagine doing this where there isn’t a buy in. I don’t think it would be about having an equity interest like a shareholder. There’s lots of different ways we might go about it.”
At the moment, there’s also no specific timeline for introducing the program.
“There’s nothing yet on which teams, how many teams, how they’d be selected, when it might take effect,” Miles continued. “I can tell you this, we did say whatever this might end up being, it’s not going to be based on this year’s results for next year.”