IndyCar, NASCAR Programs Designed To Lure Teams, Help Competitors

By Bruce Martin

It takes a full field to stage a competitive race and in today’s high-cost world of auto racing, sometimes it takes a little extra incentive to ensure a full field.
That is true at the highest level, as both NASCAR Sprint Cup and now the IndyCar Series have their own incentive programs in place to reward season-long participation.
IndyCar announced the TEAM program Oct. 3. The acronym stands for Team Enhancement and Allocation Matrix and guarantees payments of $1.2 million per team competing for the entire IndyCar Series season, including the Indianapolis 500.
In addition to the guaranteed $1.2 million for participation in the series, teams will compete for bonuses of $35,000 for first place, $25,000 for second, $20,000 for third, $15,000 for fourth and $10,000 for fifth at each IndyCar Series race outside of Indianapolis.
While this program differs somewhat from NASCAR’s Winner’s Circle program, the objective remains the same as the early 1980s when Jim Hunter, currently NASCAR’s vice president of communications, the late Bill France, Jr., Jim France and Jim Foster formulated a program to reward participation of teams that competed the entire schedule in what was then called Winston Cup.
“That’s a good step on their part,” Hunter said of the IndyCar TEAM program. “It will really help IndyCar owners, especially the owners that don’t have sponsorship. That’s an excellent plan for them. I think that’s a great plan for them.”
Hunter recalled the philosophy behind NASCAR’s creation of the Winner’s Circle program nearly 30 years ago and how it continues to be a viable concept.

“The whole idea was to give guys an incentive to have a business model to where if they did well in the current year there would be some money for them if they competed the next year and money they could count on,” Hunter said. “Back when we started it, it was in the neighborhood of $100,000 and this was in the early 1980s.”
In addition to the Winner’s Circle, NASCAR also created several other incentive programs for non-winning teams in the top 25 and the top 30 in points. Those were Plan 1 and Plan 1-C, which were started for unsponsored cars.
“Even though we didn’t have to subjectively pick who was unsponsored, it was guys we knew were not going to win or didn’t have a good chance of winning, like Dave Marcis or Richard Childress when he competed,” Hunter said. “There was a Plan 1 for them and if you finished in the top 30 in points there was a Plan 1-C. A guy who had won a race was not eligible for 1-C, so there was a race within a race between the Childresses and Marcises and the less-funded teams at that time.”
There was also a little-known program in those days for the struggling teams that was not necessarily part of the original entry blank, but one that was used by teams to survive from one season to the next.
“Thirty years ago, independent teams like Dave Marcis who did not have a lot of money and did not have a lot of sponsors, Bill France and Jim France set up a winter program so they could borrow money from a local bank in Daytona to get through the winter and build a new car for the next year and pay it back out of prize money the following year,” Hunter said. “That was personal. They did that on their own signatures.
“I don’t think anyone ever defaulted on one of those winter loans. That was back when everybody was struggling. That was very important in the evolution and building a business model to where people could do this for a living.”
The criteria for the Winner’s Circle is 10 positions that go to winning teams from last year with two spots open at the beginning of each season for the first two winning teams that aren’t currently in the program.
For instance, if entering the season one driver wins four races, another driver wins three and then many drivers win one race, if there are more than 10, it goes to point standings to determine the Winner’s Circle participant. Whoever finishes highest in the points gets that Winner’s Circle spot.
A total of $130,000 is posted by each track for the Winner’s Circle participants for the race.
Once a driver/team combination gets in the Winner’s Circle, there are certain obligations they must adhere to.
“I think what gets lost in history and the evolution of something is that it’s a car owner’s plan, not a driver’s plan,” Hunter said. “In recent years, some drivers have complained about having to make three or four appearances on behalf of the Winner’s Circle. They say they don’t get any money. That is between them and the owner. When we set it up, the impetus for the tracks to put up the money was they were going to have one of the winners of the previous year do a promotional day for your event.
“Some of the drivers coming along have been very cooperative. In some cases, we’ve had to go to an owner and say this is part of the deal; if your driver doesn’t want to do it then you are not eligible.
“I hear periodically it has outlived its usefulness, but I don’t believe that. I think it’s still important. The appearances, with the track having the use of a driver today, are huge. Promoting the event, I think that is still very important. Places like California, for example. People don’t know our sport in California like they do in North Carolina. Those appearances are very helpful.”
While NASCAR has prospered for years with its incentive program, IndyCar racing has never rewarded full-time participation outside of its point fund.
But with IndyCar fields in recent years hovering in the 18-20 car area, Terry Angstadt, president of the commercial division for the IndyCar Series, and Brian Barnhart, president of the competition division, devised a plan that would guarantee a financial base with the hopes of bringing additional teams to the series.
“When we were able to demonstrate some growth on both the sponsorship side as well as growth at the Indy 500, that allowed us to pursue a larger prize fund in total which then allowed a redistribution to make sense and give it some size and scale and importance on a 24-team level to really allow that to happen,” Angstadt said. “And from a performance standpoint, we did not want to hurt the top performing teams because we have teams not unlike other forms of motorsports that dominate the winner’s circle.
“And although to take a page out of Major League Baseball and say the New York Yankees have to have the Kansas City Royals to play, we have to make sure the Kansas City Royals are healthy. This doesn’t close everybody’s gap, but it really does give a little bit of financial predictability to the back two-thirds of the field.”
In addition to the TEAMS program, the purse for the Indianapolis 500 was increased 25 percent from $10.67 million for the 2007 race to $13.4 million for this year’s 92nd Indy 500.
First place at Indy gets $2.2 million. With other contingency awards it will exceed $2.5 million for the winner. An Indy-only team in theory could win that first place.
“We have a whole bunch of people talking Indy-only entries,” Angstadt predicted. “I think you are going to see a lot more cars at Indy. We did not want to take incentives to win away so we actually went back and re-engineered bonuses for the top-five at each race and really heavy at the top five for Indy and not only award the season-ending champ $1 million, but reward one through five. All of those are new wrinkles that made it pretty well thought out.
“The money at the back-end of the field at Indy, if you make the race, now you are guaranteed $270,000. If you make the field with any type of contingencies, you are going to be north of $300,000 for that race and that’s real good.”
The $1.2 million is a series of monthly payments starting in March that will give the teams some predictability in cash flow. Additional money is put into the season-ending point fund with the champion continuing to collect $1 million. Second is now $250,000, third $175,000, fourth $125,000 and fifth $75,000.
The success of this program remains to be seen. Only Roth Racing is new to the series with a two-car effort pledged for the upcoming season. But IndyCar officials said several possibilities continue to consider a full-time effort in 2008.
“We have multiple conversations going on with teams, some that are recognizable and some that are new,” Angstadt said. “I’m not going to make a huge prediction here, but I think we’ll see a low of 20 cars and a high of 24. That will be good for us.
“We didn’t think this was going to be the incentive that a team owner would say, ‘I have some predictable income, let’s go start a new team.’ We think it’s good for the people that do participate. Just to pick a name, Dreyer and Reinbold — those guys are good, solid members of the family and it gives them some good predictability. But for a guy to wake up and say, ‘I’m going to go start an IndyCar team,’ we never thought it would do that.”
For longtime IndyCar participants such as team owner Dennis Reinbold and Panther Racing’s John Barnes, it’s a positive step economically.
“I think this is something that needed to happen for a long time,” Barnes said. “This moves the IndyCar Series from the way it was in the early 20th century to something we needed to move us into this century. Teams need to know what they have coming in and how they can spend that with their different programs.
“Look at Major League Baseball and how the profit-sharing program has worked and benefited everybody involved. The Yankees spend a lot of money towards revenue-sharing every year and, if they didn’t do that, they’d be playing against themselves. This is, without a doubt, going to take IndyCar racing to the next level.”

NASCAR’s Winner’s Circle

How it works
The top 10 positions go to winning teams from last season with two spots open at the beginning of each new season for the first two winning teams that aren’t currently in the program. Each driver gets paired up with three races for appearances. A total of $130,000 is posted by each track for the Winner’s Circle participants for the race.

This year’s cars
• 48 (Jimmie Johnson)
• 24 (Jeff Gordon)
• 20 (Tony Stewart)
• 99 (Carl Edwards)
• 17 (Matt Kenseth)
• 77 (point switch with the No. 2 of Kurt Busch, but Busch will make the appearances instead of Sam Hornish, Jr.)
• 07 (Clint Bower)
• 5 (Kyle Busch earned the spot, but Casey Mears will make the appearances now that Busch has switched teams)
• 31 (Jeff Burton)
• 29 (Kevin Harvick)
 
Possible wildcards
Dale Earnhardt, Jr., Martin Truex, Jr., Juan Montoya, Ryan Newman, Denny Hamlin, Kyle Busch and Greg Biffle