To Sell? Or Not To Sell? The Latest On The Rumored Sale Of NHRA
Conflicting Statements By The Principals Continue To Stir The Pot
Without Producing A Definitive Answer
By Jon Asher
Photos by Dave Kommel, AutoImagery.com, Brian Wood & Roger Richards

Unless you’ve been hiding under a rock you’ve undoubtedly heard the rumors that have taken the drag racing world by storm about the possible sale of the National Hot Rod Association to Bruton Smith’s Speedway Motorsports, Incorporated(SMI). Smith’s publicly held company (Stock symbol: TRK) owns, in addition to numerous stock car racing venues, the drag racing plants at Sonoma, California, Thunder Valley Dragway in Bristol, Tennessee, and The Strip at Las Vegas Motor Speedway. As of this writing the stock is trading at $36.55, down slightly from its 52-week high of $39.80, which was achieved early in February, before this story began making the rounds.

To suggest that Smith would have publicly spoken about his desire to buy NHRA in an effort to run up the stock is ludicrous on the face of it for a couple of reasons, not the least of which is the fact that drag racing is too small a niche activity to move the market. The second is that Smith’s personal fortune, estimated to be in excess of $1.2 Billion, ranking him among the top 450 most wealthy Americans, would hardly be impacted by a share increase of even a dollar or two.

Ironically, it was NHRA’s affiliation with SMI-owned facilities that forced the sanctioning body to abandon the policy of announcing highly inflated attendance figures in order to enhance the public’s perception of drag racing. Nothing incites a stockholder more than seeing attendance figures in the six figure area on a Monday morning only to have his stock dividend fail to reflect that revenue later in the year. Simply put, publicly held companies can’t afford to fudge their figures (See Worldcom, Martha Stewart, et.al. for further evidence).

This is far from the first time that rumors have circulated about the possible sale of the not-for-profit drag racing association. Along with an unknown number of offers that may have come in over the transom, we do know of at least two firm offers, the first of which came from Texas Motorplex owner Billy Meyer, who tendered an offer during his tenure as the owner of IHRA. Meyer’s offer was quickly rejected and in hindsight appears to have been little more than an effort on his part to stir things up. A second offer, reportedly in the double digit millions range, came from a consortium of drag racing-affiliated individuals, at least one of whom had a background with a trophy company. An NHRA official called that offer "silly" at the time, pointing out that even if it had been for $50 Million it would have been too low, as the association had the capability of earning that much in profits in ten years or less.

Smith has previously had conversations with NHRA founder Wally Parks and others regarding his on-going interest in purchasing the sanctioning body and all of its assets, which includes significant real estates holdings. Among those are Gainesville Raceway, Atlanta Dragway, National Trails Raceway and Indianapolis Raceway Park, all the site of successful POWERade Series national events that help fill the coffers of NHRA because there’s no splitting the profits with a track owner.

The latest Smith statements regarding his interest in the purchase of NHRA came in stories penned by Louis Brewster of the Inland Daily Bulletin in Southern California on March 14, with a follow-up on March 17, and by Jeff Wolf of the Las Vegas Review Journal dated March 18. Both came about as the result of statements Smith reportedly made during separate interviews regarding LVMS and his relationship (sometimes somewhat strained) with the France family-owned NASCAR empire.

Smith told Wolf, "I have an interest in (purchasing) NHRA," a comment he reiterated to Brewster, and while some NHRA officials made light of the whole thing, few would deny the very real drag racing credentials held by these two journalists. Brewster has been covering all aspects of drag racing for a number of years, and has often broken stories that have had major impact, not the least of which was his revelation that NHRA president Tom Compton had apparently tried to cover up an embarrassing DUI arrest in Los Angeles. Wolf, whose background runs the gamut from his having been the PR director for Firebird Raceway in Chandler, Arizona, where he worked closely in all facets of NHRA national event promotion, to his stint as motorsports editor of the Arizona Republic, is also well versed on the sport.

But, as is so often the case, when either of these journalist has written a positive piece about NHRA they’ve been lauded, while their sometimes negative revelations have resulted in a chorus of "That’s just Louis," or "Here’s another example of someone who doesn’t understand the inner workings of NHRA," when in truth the exact opposite is the case.

In an effort to dig through this Torco's Competitionplus.com has spoken with Bruton Smith, Wally Parks and others. Here’s our complete conversation with Smith:

CP: Are you currently in negotiations to purchase the National Hot rod Association?

SMITH: I wouldn’t say that. What’s your definition of negotiations?

CP: Are you talking dollars and cents?

SMITH: No. No, we’re not there yet.

CP: Are you dealing with Tom Compton on this?

SMITH: It’s been a year-and-a-half or two since Tom and I were talking about this.

CP: Are you talking with Wally Parks about this?

SMITH: Wally and I have had conversations.

CP: How recently?

SMITH: I won’t pinpoint that, but let’s say within the last ten days.

CP: If you’re unable to purchase NHRA would you consider forming a sanctioning body of your own?

SMITH: No, I will not.

CP: Are you contemplating now putting a dragstrip on the grounds of Texas Motor Speedway?

SMITH: Well, I don’t know yet.

CP: How soon do you think your discussions with NHRA might come to fruition?

SMITH: I can’t speculate on something like that. I’m a (potential) buyer, and if (NHRA) becomes an absolute seller, then there I am.

CP: We had a conversation with Mr. Parks and he had some very nice things to say about you.

SMITH: Well, I’m glad to hear that because I know that people have talked to him about me because he’s got to be sure that if he sells there’s got to be someone there to take what he’s done to the next level. That they’ll treat (NHRA) with care and that sort of thing.

CP: From your observations of NHRA, what do you think that organization needs to get to the next level?

SMITH: I cannot get into that because if I do it will look like I’m slamming them and I don’t want to do that. If I’m a buyer, or if I become an owner then we will do a lot of the things we’ve been talking about in-house. We’ll try to make (NHRA) bigger and better.

CP: Would you consider making an investment in the organization without taking over absolute control. In other words, would you consider becoming a Board member?

SMITH: No sir! I’m not interested in that.

CP: In other words, only absolute control?

SMITH: That’s correct.

CP: If you did take control, would we be correct in assuming that since you already have a good infrastructure of experienced drag racing people already in your employ that those people would take over in the management area?

SMITH: First off I would want to make sure we let all of the (current NHRA) employees there know that we would keep all of the current employees. I would not be interested in terminating anybody. We’d keep everybody. I’d rather just build rather than tear down something. I’d want to build it.

CP: Would you consider moving the organization’s headquarters from California to somewhere like Indianapolis?

SMITH: Here again these are the decisions we would make at a later date, but would certainly not be making them at this point.

CP: Considering the three dragstrips that you currently have, are you satisfied with their performances in terms of revenues?

SMITH: Well, I’m never satisfied. I don’t want this to sound wrong, but I want to make money. That’s what I do. All of the businesses that I have, we make money. That’s why I’m here, that’s why I enjoy what I do, and I enjoy it tremendously because it’s something that keeps me moving in the right direction.

CP: Considering that Las Vegas has two NHRA POWERade national events now, would you like to see events added at Bristol and Sonoma?

SMITH: Here again that’s something we’d have to come to an agreement with with both NHRA and the facilities. If we got to the point where we thought we could do it then we’d certainly be inclined to do that.

Torco's Competitionplus.com also had a conversation with Wally Parks during which the much venerated founder of the National Hot Rod Association expressed his admiration, respect and personal affection for Smith and his operation.

But, with that said Mr. Parks also emphasized that during his one conversation with Smith regarding a possible purchase he’d told him that the organization was satisfied with its current position and was not interested in selling. At that point Smith told Parks that he hoped he’d be kept in mind if that situation ever changed, with Mr. Parks assuring him they would. "That’s all there was to it," Mr. Parks told us.

Mr. Parks later learned that Mr. Smith had made his comment about a possible purchase during the NASCAR weekend at LVMS, but since "NHRA is a non-profit company, you just don’t sell those. It’s been blown way out of proportion and (all of this talk) will eventually go away," Mr. Parks said.

Mr. Parks did acknowledge that his conversation with Smith was fairly recent, but again emphasized that it was a conversation only, and that no formal negotiations are underway or even contemplated.

"I don’t want to make (Mr. Smith) the bad guy on this," Mr. Parks said. "He’s certainly not the first person to be interested in buying NHRA, but we’re not for sale. From my standpoint it’s one of several inquiries NHRA has had, but we’re not interested in selling. That’s it. There’s no secret about our having fielded offers. Bruton certainly has all of the qualifications, all of the eligibility and certainly all of the money if (NHRA) were for sale, and he would certainly be one of the first to be given consideration, but at the present time there’s no truth to any of this. I do think Bruton is serious about this, and we owe him a lot of loyalty for what he’s done with his tracks, and he’s certainly qualified, but we’re not even considering a sale."

NHRA vp of communications Jerry Archambeault was succinct in his denials of a possible sale during the just-completed Gatornationals. "NHRA is not for sale," he said repeatedly. Further, Tom Compton also said that if Bruton Smith had made a definitive offer to purchase the organization to Wally Parks, he would have heard about it due to his close relationship with the organization’s founder, and he’d heard nothing to that effect.

Among Smith’s employees with considerable drag racing management experience is George Elliott, the former publisher of Popular Hot Rodding Magazine and also the former president of the International Hot Rod Association during the time it was owned by Prolong Lubricants, and now a major player in the Smith-owned Zmax Micro-lubricant operation. He said he had no personal interest in ever getting involved in running a sanctioning body again, and had heard nothing internally about a potential purchase by Smith.

So what, really, is the bottom line here? Based on our conversations with the principals involved it would indeed appear that Bruton Smith has an interest in purchasing and operating the National Hot Rod Association while at the same time appearing to have no interest in forming his own sanctioning body with his three tracks as the anchor point. Smith obviously has every right to express a public interest in making this kind of purchase, but if the sellers aren’t interested in moving forward, the issue is really moot. Thus it appears as if the status will remain quo, and things will continue as they are for the foreseeable future.

What do you think? Drop us a line at comppluseditor@aol.com.

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