NEWS & ANALYSIS
Bill Bader puts his share of the IHRA up for sale
Words by Jeff Burk
7/6/06
In the June 28th edition of the National Speed Sport News a “For Sale” ad appeared which offered a minority interest of the IHRA for a sum of $2,000,000. The ad referred potential buyers to Kevin J. Ruic, an employee at various times of both the IHRA and former IHRA president and owner Bill Bader and a long time friend of Bader.
It’s vary rare that the public sale of a large sanctioning body (or a piece of it) occurs, so DRO decided to look into the situation since it had the potential to have an affect on many of the readers of this publication.
What we discovered was as follows. An IHRA spokesman verified that indeed a portion of the IHRA was being offered for sale and, surprisingly, that two seats on the five-person board of directors would go with the sale of the 25 percent stake in the organization. The IHRA would offer no other comment on the sale.
DRO talked to several sources familiar with the offer and got some very interesting details, not the least of which was that the seats on the Board that went with the purchase were those currently held by Bill Bader Sr. and Jr.
DRO also learned that the other three members of the board include Aaron Polburn, Charlie Mancuso, and a third person who is an executive with Live Nation, the owner of the sanctioning body. The assumption would be that those three people would vote as a block, which would mean that anyone other than persons approved by or beholden to the rest of the board members would be basically powerless to affect the decision and direction of the sanctioning body.
Generally companies that have shareholders and boards also have agreements that provide for approval of any new members and the option of matching any bona fide offer of an outside buyer before a sale goes through. You would have to assume that a company as large as Live Nation would have these safeguards in place.
One potential buyer for the IHRA shares was reportedly mega team-owner Evan Knoll, whose Torco company already is the series’ largest backer. The rumor that Mr. Knoll was going to purchase at least a share of the IHRA was floated in another online publication earlier this year. Supposedly, the original asking price from Bill Bader for his share of the IHRA of around $1.5 million became too much for Mr. Knoll. A source told DRO that Mr. Bader was offered less than the 1.5 by Mr. Knoll and refused it, hence the “For Sale at $2,000,000” ad.
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One other prospective buyer told me he was told that the IHRA deal is returning about nine percent annually on the investment. Based upon what I’ve seen this year I believe that the IHRA is doing well enough to deliver on that claim. The immediate question is why would anyone including Bill Bader want to sell a property that was returning an annual profit of almost 10 percent? Of course Mr. Bader has always marched to the beat of his own drum.
So, at this point if there is anyone out there that wants to own a 25 percent stake in the International Hot Rod Association and apparently is willing to not have any real say on how the sanctioning body is run they can have that distinct honor for about $2,000,000 (or perhaps less). Oh, and they probably have to convince the current members of the board that they will go along with the status quo. Apparently Evan Knoll, who has invested much more than that dollar amount in drag racing teams and series that basically offer no return on investment, couldn’t see the benefits.
In the meantime, the IHRA continues to be the most colorful, innovative and non-traditional sanctioning body in motor racing history, and for a couple of million bucks you could be part of the deal.