There has been a great deal of material written concerning the SFX division of Clear Channel Communication's purchase of Bill Bader's IHRA. Much of what has been written has appeared on these very pages, but nothing that has been written for DRO or anyone else has answered the questions that have kept bothering the Burkster... Why did SFX buy IHRA, and what will their takeover do for that sanctioning body's track owners, fans, racers and drag racing in general?

Why would Clear Channel Communications, a company that, according to a recent Inside magazine article, acquired over $25 billion worth of companies in the last few years, including SFX Entertainment and Cotter Communications, buy such a relatively small property as IHRA? I've done a little research and I think I've figured out the why and what of this deal.

To understand the why you have to understand what the SFX Entertainment division of Clear Channel is about. They are basically a cradle-to-grave entertainment company that promotes, produces, and profits from concert type events ranging from mainstream music acts to monster truck events. Simply put, they control or own everything involved with putting on an event.

The parent company of SFX, Clear Channel Communications, owns around 125 of the best concert and sporting event venues in the world. They also own approximately 1200 radio stations and 750,000 billboards around the country. SFX also reportedly has management contracts with some of the music acts they book into their venues. They also promote the major indoor motocross and monster truck series in the U.S. and, while I'm not sure of the company's involvement with the motocross team, I've been told by very reliable sources that they have bought and operate several of the monster truck teams that compete on the SFX controlled circuit including the very popular "Grave Digger." Do you see what I mean when I say that SFX is a cradle to grave promotion company? They own the whole deal and make most of the money, which is only fair since they assume most of the risk.

Now we come to why I think Clear Channel/SFX bought IHRA. It's really kind of simple. SFX is in the business of putting on concerts and shows to make money. The more venues that they have, the more shows they can produce and the more revenues they produce. Buying IHRA not only afforded them access to new outdoor venues which they had wanted, but they got control of a sanctioning body at the same time.

SFX needed outdoor arenas because it's a fairly well known fact in their business that after the first of March the attendance at indoor venues drops off because during the summer months people want to get outside for their entertainment. With that apparently in mind, SFX tried to buy some racetracks last year.

Initially SFX tried to buy the tracks that NHRA owns and, according to my sources, there was a deal, but for their own reasons NHRA backed out. Tom Compton has verified the fact that SFX tried to buy NHRA and its properties. SFX also attempted to buy a group of about 10 circle tracks in the Midwest including the half-mile track at Granite City, Illinois, according to Granite city track owner Bob Wendte, but for whatever reasons that deal also fell through.

Which brings us to the acquisition of IHRA, the deal that SFX/Clear Channel did make happen.

Unlike all the other attempted acquisitions that preceded it, the purchase of IHRA didn't actually include any racetracks, at least as far as we know. But what it did was to give SFX access to a group of track owners/partners, many of whom would probably welcome the opportunity to have more money-making events at their tracks during the year. Especially events that could bring in revenue equal to or better than a drag race, in some cases wouldn't be subject to cancellation due to bad weather, and would be promoted by SFX. I would think that many track owners would view this as a win-win situation.

If you think about this from the track owner's point of view, the deal makes great sense. After all, racetracks are really nothing more than underused outdoor concert venues in most cases. A majority of races are held on weekends, but rent and expenses are 24/7 so why not put them to use during the week. Most of the tracks, especially the established tracks that have "National" events, already have the infrastructure such as parking, seating, concessions, and employees that are trained to handle the kind of crowds that come to the events. So for SFX, either buying or becoming associated with racetracks would seem to be a perfect marriage.

But, the questions remain: what will SFX do with and for IHRA and how will that affect big time drag racing? The first thing we have seen is that through their network of television and radio stations, billboards and advertising at SFX events, IHRA definitely will get more pre-race publicity. One promoter told me that for his first National Event under the SFX ownership he got 400 more radio spots in his market than he ever had before and it showed in the attendance figures. The second thing will be better public relations for IHRA and its racers with public relations giant Cotter Communications on board. (The PR/Advertising firm NHRA should have hired)

It's just a guess on my part, but I will bet that it won't be long before SFX/IHRA will be in direct competition with NHRA at all levels. This is an entertainment giant of a company used to dominating a market, managing the biggest names in the music and motorsports fields and playing before packed houses. They know that it takes marquee attractions to fill the seats and make people pay the big-ticket price and that anything less isn't acceptable. They don't appear to be an organization satisfied with being second at anything or to anyone.

Don't be surprised if NHRA starts using the tracks they own in the same manner SFX may. In the past the management at NHRA has consisted of executives who mainly came from a racing background, but that is certainly no longer the case. With NHRA president Tom Compton's background in the entertainment business, this would be an easy thing for him. A series of high profile, high profit summer concerts at Indy, Columbus, Gainesville, and Atlanta is a possibility - and if, indeed, NHRA is cash strapped as some rumors have it, why not? How about a WWF event live from IRP presented by Castrol GTX? Now there is some cross marketing!

I'll go out on a limb here and predict that IHRA will soon have a Nitro Funny Car class and purses that match or better NHRA's in all Pro classes. SFX/IHRA know that they will need the likes of Force, Bernstein, and Prudhomme if they are going to take IHRA to the top. Don't be surprised if SFX waves big bucks in front of some of NHRA's proven stars. Their past track record indicates they will do whatever they have to do and a company that had revenues of $6.9 Billion in 2000 has the resources to do whatever it takes.

I remember when Billy Meyer gave his "We're going to take IHRA to the next level" speech. I admit I was skeptical when I heard it. The SFX folks haven't said anything like that in print but I'm inclined to think they will do what Billy couldn't and actually take IHRA to the next level and, in doing so, push NHRA and drag racing in general to the next level too!!

See you at the races.

photo by James Drew

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