Explained: IndyCar’s rumoured charter system, and how it will impact the series

The IndyCar Series is currently toying with the idea of “charters” as a way to guarantee entry for a certain number of cars in every race. The system still hasn’t been officially signed into law — but many fans are vehemently against the concept.

Today, we’re going to explain just what IndyCar intends with its proposed charter system — and how that may impact the IndyCar field.

IndyCar charters, explained

In effect, a charter guarantees a car entry to every race, and it also guarantees those entries a certain amount of money at the end of the season. NASCAR implemented a similar charter system several years ago as a way to create value and stability for teams and sponsors beyond the physical assets of the team.

IndyCar, which is run by Penske Entertainment, is now looking to implement its own version of the charter system. These charters effectively create a direct business relationship between the teams and the series in which they run. NASCAR created this value with a charter system in 2016, while Formula 1’s Concorde Agreement serves effectively the same purpose.

In IndyCar’s current proposal, 25 charters will be available for the series’ entrants, though each team would only be limited to three charters. Charter eligibility would be determined from the results of the previous season’s entrants’ championship.

Beyond representing the value of the team, each charter would also guarantee entry into every IndyCar race. We’ll return to this in a moment, because the subject of guaranteed starting spots at events like the Indianapolis 500 remains a sore spot for many American open-wheel fans.

While IndyCar does not currently place a “cap” on the number of cars allowed to compete in each race in the same way that NASCAR does, rumors have swirled that this could become a likelihood in the future — particularly as crowded fields have become an issue on street circuits like Toronto and Detroit this season.

Most IndyCar circuits are built with 27 pit stalls available; at those tracks, if more than 27 cars were to enter the race, charters would provide guaranteed entries to 25 cars while the remaining entries would be required to compete for the final slots on the field.

Further, charters will be tied to Leaders’ Circle contracts. In the Leaders’ Circle program, the top 22 cars finishing in the IndyCar championship are awarded additional prize money at the end of a season in order to help maintain the team.

Currently, any team can compete to be eligible for Leaders’ Circle money; however, chartered entries would make it impossible for non-chartered teams to compete for that funding.

Several obstacles have impeded Penske Entertainment’s attempts to introduce the charter system. First, the initial proposal would have required teams to purchase charters for $1 million each — a proposal that was initially shot down.

Now, the proposed charter system would offer 25 charters at no cost, with the monetary value accruing afterward.

The second big obstacle involves the idea of 25 guaranteed starting spots for full-season cars at the Indianapolis 500.

Though the Indy 500 traditionally features a 33-car starting grid, part of the magic of the race has been the fact that any car can race in it, so long as that car qualifies for the race.

In 2018, for example, full-time driver James Hinchcliffe failed to qualify for the Indianapolis 500. Instead, he was “bumped” out of the starting field by one-off driver James Davison.

Though many fans were upset that one of their favorite drivers would not be able to compete in the race, an emotional Hinchcliffe stated, “Nobody screwed us. The system didn’t fail us. We failed us.”

While Hinchcliffe could have asked his rookie teammate Robert Wickens to vacate his seat (because at the Indy 500, cars — not drivers — qualify), he opted against that out of respect for the rules that have dictated the iconic race since the early 1900s.

But that’s not the only sore spot with the 25-car guaranteed entry field. Back in 1996, this exact same rule was placed in effect during the IndyCar Split.

At the time, two rival American open-wheel series had formed: one sanctioned by the owners of the Indianapolis Motor Speedway, and one founded by a group of disaffected team owners. That latter series had grown more popular than the former, and so the former made the decision that 25 of its cars would be granted guaranteed starting spots on the Indy 500 field.  That meant that only eight cars from the rival series would be able to qualify for the race.

Now, there is no second series to contend with this time, but the pain of that so-called “25/8” rule still lingers. If guaranteed starting slots become part of the charter system, the Indy 500 may become an exception.

Understanding IndyCar history:

👉 Explained: The chaotic history of the IndyCar split and reunification

👉 Seven reasons why US drivers like Logan Sargeant struggle to make it in Formula 1

How charters will impact IndyCar

Now that we’ve discussed charters, it’s time to look at how a charter system may impact the current IndyCar grid.

The biggest issue will likely come at Chip Ganassi Racing, a team that currently fields five cars. Ganassi would only be able to guarantee three cars a charter. Of course, Ganassi could field an additional two non-charter entries — but because the IndyCar field is expected to grow with the introduction of the two-car Prema team in 2025, that would leave two CGR cars open for bumping.

It’s going to be a challenge for Ganassi to determine which cars gain a charter, and what drivers will pilot those cars. The Nos. 9 and 10 of Alex Palou and Scott Dixon are obvious choices; the No. 8 car will likely be grandfathered into a charter thanks to its 2023 performance.

But that doesn’t mean current No. 8 driver Linus Lundqvist will remain with the team, as No. 4 driver Kyffin Simpson brings ample funds. No. 11 driver Marcus Armstrong may be left out in the dust.

Other concerns arise as teams like Meyer Shank Racing look to expand, while the incoming Prema team will have to purchase charters rather than be offered them at no cost, as the team didn’t participate in the 2023 IndyCar season.

If Ganassi opts against fielding two non-chartered cars, Prema would have much less to worry about — but there are no guarantees at the moment.

Further, there are no guarantees about the current charter proposal overall. Penske Entertainment had hoped to have a deal squared away prior to the Indianapolis 500, but teams have requested revisions before they’ll agree.

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