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INDIANAPOLIS -- The Indy Racing League announced a new prize fund allocation system Tuesday that is designed to provide a more stable financial platform for existing and prospective IndyCar Series participants.

Teams committing to run the full 16-race IndyCar Series schedule in 2008 are guaranteed at least $1.2 million in funding, with additional cash prizes awarded to the top five finishers in each race.

Created as an extension of the IndyCar Series' Leader's Circle Program, the IndyCar Team Enhancement and Allocation Matrix (TEAM) system essentially promises the equivalent of second-place prize money to every full-time competitor at every race. League officials said funding is guaranteed for at least 24 entrants, although IndyCar Series fields generally had 18 to 20 cars in 2007.

Only seven of the 17 drivers who ran all 17 races in 2007 won more than $1.2 million in prize money.

"The TEAM program further enhances the value of racing in the IndyCar Series for all of our team entrants," stated IRL president Brian Barnhart. "It's important to note that this program will increase as the series grows and we're successful in attracting new sponsors and enhancing league revenue.

"We feel this is an important step in strengthening our current teams while positioning us as the premier motorsports destination for potential teams looking to move to the next level."

Full-time IndyCar Series teams are guaranteed $300,000 for the Indianapolis 500 even if they are bumped from the race, with the remaining $900,000 earmarked for the other fifteen races on the IRL schedule. In addition, race wins are worth $35,000, with prize money descending to $10,000 for a fifth-place finish.

Prize money for the Indianapolis 500 also receives a significant boost. The Indianapolis Motor Speedway and the IRL promise the winner of the 92nd running of the 500 will receive no less than $2.5 million -- a 30 percent increase over the race record of $1.76 million set by Buddy Rice in 2004.

The overall purse for Indy of $13.4 million represents a 25 percent hike.

"It's only appropriate we also strengthen the incentive to compete and participate and win 'The Greatest Spectacle in Racing' as we approach some very unique milestones in our history in 2009 and 2011 [centennials of IMS and Indy 500, respectively]," said Indianapolis Motor Speedway president and COO Joie Chitwood.

At Indianapolis, the second-place finisher will net at least $1.25 million, and the third-place runner will take home at least $750,000. That's more than double what those finishing positions earned this year.

One-off Month of May entrants for the Indy 500 are guaranteed a minimum of $270,000.

"These numbers are there for a reason," Barnhart said. "That should be enough money to pay for your full-month engine lease, as well as your tires for the entire month of May for one-off cars. The full-season program at $1.2 million is the same deal. That pays for your full-season engine lease and your tires for the year.

"It's our way of providing stability for the teams and improving the business model," he added. "We're hoping to attract new [teams], and it should benefit everyone, whether it's teams that are well-funded and have all the sponsors, all the way down through each and every team involved in the series."

Figures provided by the IRL showed that all existing teams would have made more money in 2007 using the TEAM program, with increases ranging from 11.4 percent for Rahal Letterman Racing to A.J. Foyt Enterprises' 27.1 percent.

Reaction to the TEAM program was positive at both ends of the financial spectrum on the IndyCar Series grid.

"It's a good future investment into the teams for the series," said Dreyer & Reinbold Racing co-owner Dennis Reinbold. "Anytime somebody gives you more money to run in a series, it helps. I think it impacts everyone in a favorable manner and it's a win-win for everyone. It's nice of them to take the additional money they have coming in and investing it in the teams."

Andretti Green Racing ran four cars full time in 2007 and expects to do the same in 2008. The IRL says AGR would have netted 26.3 percent more income under the 2008 TEAM system than the $8.25 million in prize money its drivers won this year.

Indianapolis 500 winner and IndyCar Series champion Dario Franchitti came out with about $4 million either way. But AGR co-owner Kevin Savoree said he believes smaller teams have even greater potential to benefit from the TEAM program.

"It's a great mix of both," he said. "By basically rewarding every entrant with what amounts to a second-place based on the old prize money formula, I think it's going to be great for everybody -- small teams and big teams. And then when you look at what they have done with the Indy 500 while still having championship money available, it makes it exciting for the bigger teams.

"I think it's awesome. They've done a great job thinking through how it will affect everyone."

The IRL didn't divulge specifics about how or when the TEAM program funds will be released to participating teams. The unspoken goal is to add cars -- and by extension, value -- to the IndyCar Series field.

"I hope it encourages more people to look at the series," said AGR co-owner Kim Green. "If we could have the problem of more than 24 cars trying to run in the series, that would be a great problem to have."

"I think all IndyCar Series fans want to see 30-car fields from a competition standpoint, as do the promoters," added Texas Motor Speedway president Eddie Gossage. "If this program ensures full fields for promoters and stability for the team owners, I think it's a great concept for the health of the sport."

John Oreovicz covers open-wheel racing for National Speed Sport News and ESPN.com.