Analysis: Indy Lights growth under threat following scholarship reduction

A considerable disagreement has arisen between Indy Lights and some of its leading competitors in recent days after it emerged that the series has significantly and unexpectedly reduced its scholarship package relative to previous years. The conflict also threatens the series’ recent growth and may affect its attractiveness to teams and drivers from around the globe.

By Jeroen Demmendaal

First reported by Racer and Marshall Pruett earlier this week, Indy Lights competitors found out at the annual end-of-season winners’ banquet that 2022 champion Linus Lundqvist would receive a USD 500,000 cash prize – and not much else. Set against the scholarship packages in previous years, valued at around USD 1.2 million, this year’s prize pales in comparison. And yet this is not the first time this issue surfaces.

Already in January, F1 Feeder Series learned from internal Indy Lights documents that the 2022 title would translate into a USD 500,000 cash prize for the winning driver. But when asked by F1 Feeder Series, several team managers and drivers said they were not worried about this change and were convinced that under the new ownership of Penske Entertainment, Indy Lights would be even more attractive.

There was an anticipation and expectation that the scholarship package would consist of a cash element as well as other benefits such as an engine lease and a tyre contract. The combined value of such a package would have been well north of USD 1.2 million and would make it a lot easier for any Indy Lights champion to negotiate a step up to the NTT IndyCar Series.

The sense of anticipation was also strengthened by the addition of in-season prize money worth USD 700,000 related to poles and victories – for example, drivers pocketed USD 20,000 for a race win in 2022. This was a new revenue stream for drivers and teams and reinforced the general idea that Indy Lights under Penske Entertainment would grow in overall attractiveness.

A problem that needs fixing

Now that this expectation has been proven wrong, with several teams and drivers taken aback by an unexpected reduction in the scholarship package for the champion, the Indy Lights organisation has a problem on its hands that needs fixing.

Take communication first. While the documents seen by F1 Feeder Series in January were clear in mentioning the cash prize only and no additional benefits, a press release issued by the series on February 22 stated explicitly that “the 2022 series champion will receive a scholarship and additional benefits to use toward a 2023 NTT INDYCAR SERIES entry”.

This confusion notwithstanding, at the very least there seems to have been a big miscommunication between Indy Lights and its competitors. Team managers and drivers assumed there was much more to the scholarship package than has proven to be the case, leading to the current impasse.

The same disconnect has surfaced elsewhere. For example, ahead of the season finale F1 Feeder Series found that some drivers were unaware that there was a cash prize awaiting the second- and third-place finishers in the championship. While this was a pleasant surprise for them, it seems Indy Lights still has some work to do in making sure all competitors are fully up to speed with what applies.

A unique selling point

Secondly, it’s ironic that this issue arises just as Indy Lights is growing apace. As F1 Feeder Series reported earlier this month, our latest estimate suggests that the 2023 grid may contain as many as 20 cars. HMD Motorsports will expand to eight cars next year, while new entries by Cape Motorsports and Legacy Autosport as well as the expected return of Juncos Hollinger Racing come on top of continuity at Andretti Autosport, Abel Motorsports and Force Indy.

It’s likely that this growth in car count is partly based on expectations about an ever-improving return on investment for drivers and teams. The old USD 1.25 million scholarship guaranteed any Lights champion a drive in the Indy 500 plus two other races at minimum. That very powerful and unique selling point, especially for prospective drivers from series in Europe without scholarships, has now lost a lot of its strength.

Because while USD 500,000 is nothing to sniff at, it’s only a starting point for any driver trying to put together a budget for a season in IndyCar. Even a deal for only the Indy 500 requires more than the half a million now awarded to Indy Lights champions. The conclusion, then, is that Indy Lights has managed to make itself less attractive to drivers, especially those outside the US. If nothing changes following this week’s events, the series’ position in the global battle for talent may very well be affected.

Header photo credit: Gavin Baker Photography

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