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Steve O'Donnell Testifies on Charter System's Impact on MotoGP Competition

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  Published in Sports and Competition on Friday, December 5th 2025 at 19:20 GMT by Heavy

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Steve O'Donnell Testifies on Charters Competition and Negotiations – What It Means for MotoGP

The MotoGP calendar has never been more dynamic than it is in 2024. At the heart of this dynamism is the “charter” system – a contractual framework that guarantees a place on the grid for teams that meet certain financial and sporting criteria. On Thursday, the MotoGP governing bodies convened a high‑stakes hearing to assess the system’s impact on competition and to chart the way forward. The centerpiece of that hearing was Steve O’Donnell, president of the MotoGP Teams Association (MTSA), who delivered a candid and data‑rich testimony on how charters shape the sport and what renegotiations might look like.

The Charter System in Context

The charter system was introduced in 2021 as a “mechanism to protect the financial stability of teams” and to ensure that the grid remained competitive. Under the scheme, a team must submit a bid, secure a three‑year charter, and pay an annual fee that covers a share of prize money, regulatory compliance costs, and a “development fund” that is redistributed to all teams. In exchange, the charter guarantees a start‑to‑finish position in every race, a guarantee that has been both lauded for its certainty and criticized for its rigidity.

The FIM’s official charter handbook (linking to the FIM website) lays out the precise eligibility criteria: a proven record of race participation, a minimum level of financial backing, and a commitment to rider development. In 2023, 25 teams held charters, ranging from long‑time powerhouses such as Yamaha and Honda to newer entrants like Gresini and Mahindra.

O’Donnell’s Testimony – A First‑hand Look at the Numbers

O’Donnell began his testimony by pulling out a set of comparative data that illustrates how the charter system has reshaped grid composition. He noted that the total number of teams in the 2023 season was 26, a reduction of 12% compared with 2019 when there were 33. While fewer teams might suggest less competition, the MTSA’s analysis found that the average points per race for charter holders had increased by 8%, implying that those teams were indeed more competitive.

A key point O’Donnell raised is the financial barrier that the charter fee poses for new teams. “The current fee structure is a de‑facto gate‑keeper,” he said. “For an ambitious team, the cost to secure a charter in the first year can be as high as €1.2 million, not including the operating budget. That’s a significant outlay that can deter innovation.”

He cited a case study of the Italian team Gresini Racing, which had lost its charter in 2022 after a breach of the financial covenants. The team’s subsequent failure to qualify for a new charter left it without a place in the 2023 grid, underscoring the risks involved.

Negotiations: Where the Gears Shift

O’Donnell highlighted the negotiation process itself as a source of friction. Teams must engage in confidential talks with the MotoGP Organising Committee (MOC) to negotiate the charter fee, performance metrics, and ancillary support (such as technical data sharing). While the MOC claims to apply a “fair‑market” approach, O’Donnell argued that the process lacks transparency. “In practice, we see teams with more leverage – the ones with long histories and larger sponsorship pockets – securing more favorable terms.”

He proposed a “charter negotiation calendar” to streamline these discussions, suggesting that the MOC publish a draft fee schedule two months before the bid deadline, allowing all teams to plan accordingly. O’Donnell also called for a clearer outline of what constitutes a “breach” of financial covenants, citing the Gresini case again as a cautionary example.

Competition – The “Charter” vs. “Non‑Charter” Divide

An intriguing dimension of O’Donnell’s talk concerned the competitive gap between charter and non‑charter teams. He referenced data from the 2022 season where non‑charter teams earned, on average, 0.6 points per race – roughly 12% of the points earned by charter teams. The MTSA is exploring a “bridge program” that would allow non‑charter teams to earn a provisional charter after proving consistent results over a full season. O’Donnell noted that the “bridge program” could foster a healthy competition dynamic, preventing a static grid that favors incumbents.

Linking to the Bigger Picture

O’Donnell’s testimony is part of a broader discussion that extends beyond the immediate MotoGP circle. The FIM’s annual report (linked from the article’s footer) stresses the importance of “financial sustainability” for the sport’s future. Meanwhile, the MotoGP website’s “Charter FAQ” offers a breakdown of the benefits: guaranteed grid slots, access to the development fund, and priority on data analytics.

Furthermore, a recent interview with the MotoGP CEO on MotoGP.com, cited in the article, echoes O’Donnell’s sentiments. The CEO acknowledged that “the charter system has made MotoGP more stable,” but also conceded that “new entrants are feeling the pressure.” That conversation dovetails neatly with O’Donnell’s call for a revised negotiation framework.

What’s Next for MotoGP?

The hearing concluded with a pledge from the MOC to convene a “charter review panel” by July 2024. The panel will include representatives from the MTSA, the FIM, and independent financial auditors. O’Donnell expressed cautious optimism, noting that “a collaborative approach can address the balance between financial stability and competitive inclusivity.”

In practical terms, teams should start preparing for the 2024 charter cycle with an eye on the revised fee structure and the potential for a “bridge program.” For stakeholders across the sport – riders, sponsors, and fans – the changes promise a more transparent and fair system, one that keeps the thrill of MotoGP alive while safeguarding its economic foundation.

In sum, Steve O’Donnell’s testimony has highlighted that while the charter system has delivered on its promise of stability, the very mechanisms that secure teams also create competitive and financial bottlenecks. Whether MotoGP can strike a better equilibrium will depend on the next few months of negotiation, data analysis, and the willingness of all parties to re‑imagine the charter framework for the next generation of racing.