IndyCar working to ease financial burden of shutdown for teams

Image by Phillip Abbott/LAT

IndyCar working to ease financial burden of shutdown for teams

IndyCar

IndyCar working to ease financial burden of shutdown for teams

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The NTT IndyCar Series is working on a few measures aimed at lessening the financial burden its teams will increasingly face as the stoppages related to the COVID-19 virus force cancellations and postponements of its races.

According to IndyCar CEO Mark Miles, new series and Indianapolis Motor Speedway owner Roger Penske has been the driving force behind the initiative.

“We’re trying to assist our teams in logical ways during this situation, and who better than Roger, to think about being attentive to our stakeholders, as someone who is also a team owner, and a race promoter,” Miles told RACER. “There’s no aspect of it that he does not have deep knowledge of, and he’s engaged in thinking about those teams and stakeholders and their needs while we’re unable to race.

“Roger has already communicated with owners on what he’s planning to do and working on that will be beneficial. Some of it may have to do with protecting revenue, or reducing costs, or deferring costs. And there’s some of that going on with race promoters as well.”

It’s believed three primary areas have been targeted by IndyCar’s leadership group, with Penske assembling regular paddock-wide conference calls to deliver updates.

The first is the Leaders Circle program, which was implemented more than a decade ago to replace the standard prize money payout system. With the bigger teams taking home the majority of those funds, smaller teams asked the series to level the playing field by taking the vast majority of prize money made available at each race, pooling it together, and dividing it equally among all full-time teams.

For teams who commit to fielding those full-time entries, IndyCar has awarded Leaders Circle contracts worth just over $1 million over the years per car, which is paid through monthly installments.

Although every IndyCar race through the end of April will not take place as scheduled, teams have been informed of the series’ intent to pay the first Leaders Circle installment. With annual budgets running in the $5-6 million range per entry, at minimum, receiving Leaders Circle income should serve as a valuable layer of support from IndyCar as teams prepare for more races to be canceled or postponed due to the coronavirus outbreak.

Firestone is among suppliers trying to be flexible with the race teams in these uncertain times. Image by Scott LePage/LAT

Next on the list is the annual lease for Firestone’s racing tires, which runs in the $1 million range per entry. As a company, Firestone has been among the best friends the IndyCar paddock has known, and with looming payments to be received from each team, the company has deferred those expectations.

The third and final area of relief orchestrated by Penske and IndyCar involves engine lease payments due to Chevy and Honda. With each lease falling in the area of $1.2 million per car for the season, both auto manufacturers have joined with Firestone in delaying the need for teams to pay their invoices.

Between sending Leaders Circle checks to moving the biggest competition bills out to an undetermined future date, weathering the virus-related financial storm should be more realistic for IndyCar teams in the weeks and months ahead as a result of the series’ swift action to address its paddock’s greatest concern.

 

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