NHRA for sale? 3/15/05
Smith told a group of reporters during a news conference held after a NASCAR race at his Las Vegas track that he was having "ongoing talks" with the NHRA and had even talked to Wally Parks. As soon as I read this story which, for anyone involved in drag racing is of great importance and interest, I started calling my sources inside the Bruton Smith organization and the NHRA. They confirmed what Mr. Smith had said in the papers. He has a serious interest in purchasing the National Hot Rod Association lock, stock and barrel and has had conversations about the possibility of buying the NHRA. Actually, this is not the first time that Bruton Smith's name has come up in conjunction with rumors about trying to buy the NHRA; he made overtures to purchase the sanctioning body in 1999. This is just the first time I can recall Mr. Smith saying so in public. Interestingly, after Smith's announcement to the press, veteran Southern California motorsports writer Louis Brewster of the Inland Valley Daily Bulletin wrote a news story concerning the Bruton "Bombshell." For his story Brewster called both NHRA VP of Public Relations and Communications Jerry Archambeault and NHRA's chairman of the board, Dallas Gardner, and asked them about Mr. Smith's quote. Mr. Archambeault denied that there were any discussions between Bruton Smith's organization and the NHRA. Gardner also denied the report. Let's see if I've got this straight -- a man who owns three NHRA-sanctioned tracks and promotes four POWERade national events tells the press that he has had talks with the NHRA about possibly buying the organization, and the VP of Communications and the Chairman of the Board of the NHRA either say they have no knowledge the talks are taking place or deny they ever happened. Who is a poor journalist supposed to believe? Well, for this one I'm going with Mr. Smith. I have been speculating in my columns and in news stories since I first got a look at NHRA's tax returns for 2002 and 2003 that the budget cutbacks, work force reductions, and searches for new and improved revenue sources from within the sanctioning body reminded me of what a corporate executive does when he is hired to make a business's bottom line better so that it will be attractive to a potential buyer. I even asked a friend of mine who has been through a couple of corporate buy-outs in his own industry to look at the situation and he said it certainly appeared that Compton's management group was trying to make the NHRA's bottom line attractive to a potential buyer. Thanks to Tom Compton's management style, NHRA's bottom line today is much better than it was in 1999 when Smith first looked at buying the NHRA. Smith's Speedway Motorsports Inc. has let it be known in the past that as a publicly held corporation the company's shareholders and Wall Street expect the company to grow and increase its value. It's pretty obvious to most observers that the France family is loath to let anyone other than their own company have a bigger position in NASCAR, so corporations such as Smith's have to look elsewhere. As a company the puts on races and manages racetracks the NHRA certainly would have some appeal to Smith's company. In his press conference at Las Vegas Smith said, "I have an interest in NHRA. We would have to change the (non-profit) status. We would have to agree on a price and what they would do with the money is up to them." So, if I am interpreting this corporate speak correctly, what will probably have to happen before the NHRA can be sold is that it would have to change its not-for-profit status. Now here is where it really gets interesting. Who exactly owns NHRA's assets? We know that there are several corporations under the NHRA umbrella besides just the NHRA that administrate the races. Does someone we've never heard of own parts of the company that controls National Dragster? Who actually owns Main Gate (trash, treasure and t-shirt concessions)? Do Wally Parks's old pals Harvey Palish and Robert E. Petersen hold some of NHRA's paper? Do the members of the board stand to benefit from any sale of the NHRA? My gut feeling is that sooner than later the NHRA, or at least the five tracks it owns or controls, will be sold and probably to Bruton Smith's SMI. If he were to own seven tracks and control almost half of the national events, Smith would have de facto control of the sanctioning body. What will the sport look and feel like if or when two corporate
giants like the Bruton Smith organization and Clear Channel control
professional drag racing? It will certainly be different, but will
it be better? That probably will depend on whether you are a professional
racer with a corporate sponsor or a sportsman racer with a mortgage.
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I
came into the office Monday morning and there was a message from
my old friend and this mag's senior photographer, Ron Lewis, telling
me about a news story in the sports section of the San Diego Union
newspaper where Bruton Smith was quoted as saying he was having
ongoing talks with NHRA about purchasing the sanctioning body. The
billionaire racing icon just happens to own three NHRA national
event tracks -- which put on four of the 23 NHRA POWERade Series
events -- so the story was big news in drag racing. 
