HOW NHRA's $120-MILLION SALE FELL THROUGH

In mid-2007, things were looking up for the National Hot Rod Association, the NHRA, for over 50 years the nation's premier promoter and sanctioning body for amateur and professional drag racing. HD Acquisition Partners seemed a money-flush suitor, and described themselves thusly on their website: "HD Partners Acquisition Corporation is a special purpose acquisition company formed in 2005 for the purpose of effecting merger, capital stock exchange, asset acquisition or other similar business combination, with one or more domestic or international operating businesses, in the media, entertainment or telecommunications industries." HD Partners Chairman Eddy Hartenstein, founder of DirecTV, led the charge on buying NHRA. (Angie McBride leaves the line on a Pro Stock Motorcycle, below, Ashley Force is a top Funny Car driver; NHRA has always welcomed women in the sport as fans, team members, owners, sponsors and racers, well-ahead of all other motorsports in the US).

And this group was offering around $120 million for the NHRA, lock, stock and Wally Trophies. Though there was a lot of snickering by long-time NHRA followers and some of the sport's more savvy businesspeople, feeling that HD was getting away with buying NHRA for much less than it was worth, as things worked out, everyone, in a sense, became a loser.

In January, 2008, months after HD's purchase of NHRA had been trumpeted worldwide while fans and participants hoped for the best, HD Partners decided against the deal, and in fact, in April of this year, HD Acquisition Partners was itself dissolved, liquidated, they were, as Mel Brooks might have said, ka-put.

Bruton Smith, a wealthy and successful drag racing strip and NASCAR track owner and promoter, might be waiting in the wings to make a new attempt to take over NHRA.

The episode left NHRA and its top officers looking foolish, to say the least, with the final drama happening just days before the running of NHRA's annual season-opener, the Winternationals, at Pomona, CA. Quietly, though, many of the sports' biggest promoters and sponsors and racers were happy with the outcome, glad with NHRA continuing as the sport's biggest sanctioning body. And all involved knew that if another buyer was to be found, $120 million would be the minimum, the starting bid, as it were.

Here's how Jim Peltz in the LOS ANGELES TIMES wrote about it in February of this year:

“I felt like someone punched me in the stomach,” NHRA driver Ron Capps said shortly after shareholders  of HD Partners Acquisition Corp. rejected the deal. HD Partners executives did not comment on the failed deal. The Santa Monica company would have paid $121 million for NHRA’s Glendora headquarters building, four race tracks and its Powerade Drag Racing Series. NHRA planned to use the money to finance its popular amateur racing program, and HD Partners hoped to run the Powerade series as a for-profit business.

Some drag racing industry insiders believe that the deal fell apart because of the troubled financial markets. Others suspect that savvy investors were leery of investing in a lesser-known racing circuit that lagged far behind the popular NASCAR series.

“I think the real bean counters on Wall Street looked at [HD Partners] and said, ‘What are you thinking?’ ” said Jeff Burk, publisher of DragRacingOnline.com. “I think they started to wonder, ‘Where’s the pot of gold at the end of the rainbow?’ ”

Longtime drivers and team owners were stunned last May (2007) when NHRA announced plans to sell most of its assets, including its pro racing circuit. “In years past, the NHRA said that selling anything was pretty much a closed issue,” said longtime racer and team owner Don Prudhomme. “Then, lo and behold, someone figured out how to sell it.” (End of TIMES story excerpt). (NHRA's top personality, John Force, drives a classic Mustang while Carroll Shelby waves at a Ford Motor Company event; Force has suffered through the death of a team member and his own near-death crash in the past year, and he now says he is committed to leaving a legacy of safety in the sport).

Another factor which might have affected how the NHRA looked to HD was the non-profit status of NHRA. Formed in 1951 as a group dedicated to traffic safety, taking drag racing hot rods off the streets of America and putting it on professionally-run race tracks, the group has remained a non-profit to this day. This status affected how NHRA could handle their own money made from TV rights and other ventures.

When I interviewed several Top Fuel an Funny Car drivers in the 1990s for a British TV show, all of them said that NHRA had, for lack of a better term, put its claws into each of them, trying to control every aspect of the products each driver could sell at their own souvenir trailers at the races or by mail or internet sales. One of them told me that NHRA "allowed" the drivers to "keep" just 10% of monies they made selling items with their own image or name on them, giving 90% to NHRA. "And we signed those contracts if we wanted to race," she said. (Wally Parks, in suit on right, and his wife Barbara, seated, talk to young racing fans about the NHRA at a Los Angeles event in the 1950s).

Many teams and drivers feel that the non-profit status might have made sense when NHRA began, but as  time has gone on, more and more of the organization should have been made a for-profit business. This way, even while its non-profit status could have been sustained, but relegated to a separate foundation, such as the NHRA Museum in Pomona, CA, and other appropriate uses, it would free-up other cash for needed track repairs and other high-cost maintenance jobs. Such a plan might have been able to achieve everything NHRA was trying to do, remaining a sort-of home-town safety-oriented group, but allowing whatever growth the market would bear as far as its four best-known and professional classes (Pro Stock Motorcycle, Pro Stock, Funny Car and Top Fuel).

In the meantime, though, while some in the NHRA's executive suites might be looking out their Glendora, CA, office windows, looking for Bruton Smith bringing baskets of cash down the smoggy 210 Freeway to lay at their feet, unfortunately NHRA has been going through one of the most tumultuous periods in its 57-year existence, none of it doing with the HD acquisition. With founder Wally Parks having passed away in September, 2007 at age 94 and many of its early personalities long gone from the scene, a fourth generation of well-financed teams and racers are taking the sport into the 21st century, having to deal with serious questions of safety which need to be handled realistically, professionally and transparently.

The fans, racers and sponsors demand and, more importantly, deserve, no less than that.