In an effort to help its mid-level and smaller teams, plus put more money in everyone's pocket at Indianapolis during May, the IndyCar Series is bolstering and restructuring its earnings distribution.
Beginning next year, a program called IndyCar TEAM: Team Enhancement and Allocation Matrix, will award a minimum of $1.2 million to each car entered to compete in the entire 2008 IRL season, including the Indianapolis 500.
The existing event purse formula will go away, but the Indianapolis 500 purse will increase by 25 percent.
And the IndyCar Series champion will continue to receive a $1 million bonus, as in past seasons, with second through fifth place in the final point standings getting end-of-season bonuses of $250,000, $175,000, $125,000 and $75,000, respectively.
"TEAM is an expansion of the series' Leader's Circle Program and further enhances the value of racing in the IndyCar Series for all of our team entrants," said Brian Barnhart, IRL President of Competition and Operations.
"This is a baseline program designed to increase as the series grows and as we are successful in attracting sponsors and enhancing league revenues."
In conjunction with the announcement of the IndyCar TEAM program, Indianapolis Motor Speedway officials announced that the purse for the 92nd Indianapolis 500 will grow to at least $13.4 million, a 25 percent increase over the record $10.67 million purse paid out in 2007. Any full-time starter will be guaranteed at least $300,000.
"As the Indianapolis 500 and the Indianapolis Motor Speedway approach some historic milestones in 2009 and 2011, it's only appropriate we strengthen the incentive to compete in 'The Greatest Spectacle in Racing,'" said Joie Chitwood, President and Chief Operating Officer of the Indianapolis Motor Speedway. "The new purse structure for the Indy 500 will help all entries earn more money than ever during the 'Month of May.'"
The winner of the 92nd Indianapolis 500 could receive at least $2.5 million, a 42 percent increase over the record winner's payout of $1.76 million awarded to Buddy Rice in 2004. The runner-up could earn at least $1.25 million, with the third-place finisher earning at least $750,000. Fourth- and fifth-place finishing cars will be guaranteed bonuses of $475,000 and $375,000, respectively.
It's a simple formula. If you have a two-car team, you're guaranteed $2.4 million for running all 16 races in 2008. According to IRL team managers, that will help give teams a jump start on finding sponsorship.
"I think it's a good thing for the health of the series," said Robbie Buhl, the former IRL driver who co-owns the two-car Dreyer & Reinbold effort with Dennis Reinbold. "We need to have 20-plus cars and we can't be shortsighted - we need to be stronger."
Mike Hull, longtime team manager for Chip Ganassi Racing, echoed Buhl's thoughts.
"Increasing revenue to the teams is vital to the long-term success of the series and it's a big step forward in a series that already pays good prize money," said Hull. "If you know coming in you're guaranteed $1.2 million, then a smaller team can work backwards and go out and find somebody to support the rest of the program.
"It's a positive situation."
Scott Roembke, who calls the shots for Rahal Letterman Racing, also gave the proposal a thumbs-up.
"In basic principal, we'd be for it and I think it's a good move to try and shore up the teams from top to bottom," said Roembke, whose two-car effort with Ryan Hunter-Reay and Scott Sharp sports major sponsorship from Ethanol and Patron tequilla.
"As a team, we don't budget the prize money because obviously, it fluctuates year-to-year and we end up spending it on crash damage or
whatever. Whether you had a bad or good year, you would know what's coming in [under the new plan], so that's a good thing."
For an original IRL member like Greg Beck, who couldn't keep up with the rising costs of competition, this guaranteed revenue could put him back in play.
"It has the potential to get us back full-time, because it provides a financial anchor and it makes it easier to go back to old sponsors when you're already to 'X' point," said Beck, whose last full campaign was 2001 with Billy Boat driving, when they finished fourth in the points on a $1 million budget and three full-time employees.
"It makes it more equitable for a smaller team."