NEWS & ANALYSIS
NHRA cuts expenses, increases profits in ‘05
By Jeff Burk
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Once again under the stewardship of NHRA’s president, Tom Compton, the drag racing sanctioning body that claims to be the largest sanctioning body in the auto racing industry with some 80,000 members, showed an increase in gross revenues in 2005 compared to their 2004 numbers.
Their 2004 tax return showed gross receipts of $103,361,022. The sanctioning body’s tax return shows that in 2005 gross receipts increased to $107,237,835 for an increase of $3,876,815, which is an increase in revenue over 2004 of about 4.8 percent.
The total membership dues and assessments (whatever those are) for 2005 is reported at $4,140,990, an increase of about $300,000 over 2004. One interesting number we noticed is that if you divide the $4 million-plus membership revenue by the $64 that an NHRA membership costs you come up with a membership of around 64,000, instead of the 80,000 that they claim in their marketing pieces. Interesting enough, 64,000 is just about the number of copies of National Dragsters that are mailed weekly according to the publishers statement that appears yearly in that publication. [As a side note, that circulation number was over 79,000 in 1993 and has been dropping every year since then.]
They also spent about $250,000 less in legal fees in 2005 compared to 2004.
Despite many areas that show the sanctioning body was able to cut some costs, they still spent more than $7,000,000 more in 2005 than 2004, most of that coming from a $4,000,000 increase in pension plan contributions and a near $3.5 million increase in spending noted on line item 43 as “other expenses”. A look at information on the page that shows the “other expenses” reveals some interesting information.
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The NHRA actually paid more in prize money, trophies and jackets in 2005 than they did in 2004, They spent more on TV production by a half-million dollars, and paid the track operators and sponsors about a million dollars more in 2005 than they did in 2004. They also spent slightly more on insurance in 2005 than 2004, and they paid around a million dollars more on something titled “professional services” in 2005 compared to what they spent in 2004.
As far as upper management pay goes, which is always of interest to the members, President Tom Compton’s total compensation increased by about $40,000 to a total of just over $661,000. Senior Vice President Graham Light got about $30,000 more in 2005. On the other hand Chairman of the Board Dallas Gardner’s compensation dropped by about $100,000.
One last factoid: despite increasing revenues by about $4,000,000 in 2005 the sanctioning body ended up with less net assets at the end of 2005 than 2004.