SMI Will Buy the NHRA

8/4/2008

Okay fans, I now believe that the Bruton Smith organization is ready to purchase the NHRA. Despite the fact that both Smiths, father and son, have said recently that although they were interested in the past in acquiring the NHRA now that issue was on the “back burner,” I can’t find any quotes that say they have “no interest” in buying the NHRA. The signs are all there; you just have to read them.

There can be no doubt for anyone who has paid just a little attention to Tom Compton and his NHRA management team in recent years of two things: 1. The NHRA is for sale and 2. You can’t believe or trust in a management team that blatantly lies to the press, the fans, the sponsors and the racers.

For months and months after the Bruton Smith organization leaked the news that they were trying to buy the NHRA or at least some part of it, everyone on the NHRA staff from Anthony Vestal to Jerry Archambault to Tom Compton repeatedly told all of us the big lie:  “The NHRA is not for sale!”

Then, suddenly, they announced that they were going to sell the professional classes, all of the tracks they own, their contract with the Pomona fair board, and even the sanctioning body’s headquarters building in Glendora to Eddy Hartenstein’s HD Partners group.

When those of us who had been constantly assured that the NHRA wasn’t for sale found out it really was, were we supposed to believe some scenario where on a whim Mr. Hartenstein drove over to Glendora one day, knocked on Tom Compton’s office door and said, “Hi Tom, I’m in an acquisition mood. Why not sell me the NHRA?” And Tom answered, “Well, Eddy, I’ve repeatedly told the fans, sponsors and racers the NHRA isn’t for sale but since I don’t answer to anyone or have to ask anyone’s permission to do anything, let’s make a deal.” It was all just a coincidence? Tom wasn’t trying to sell the NHRA, was he?

If any of you out there still believe that Tom Compton, Dallas Gardner, Peter Clifford and all rest of the current management (with the possible exception of Graham Light) aren’t looking to sell the NHRA, cash in and then get out, you just haven’t been paying attention to the way Corporate America has been doing business for the last 100 years or so. Or to how the NHRA has been run since Wally Parks and Dallas Gardner installed Compton as president, told him to make the business profitable and allowed him to purge the organization of executives who actually had experience managing a successful drag racing sanctioning body.
 
So, now we know that the NHRA is for sale. And it is evident that Tom and the rest of the board are doing whatever is necessary to make it attractive to potential buyers. Instead of investing in the infrastructure of the NHRA itself they’ve spent a lot of the sanctioning body’s money on hiring ex-GM engineers, expensive public relations and marketing firms, and building luxury skyboxes.  That’s what a corporation does when it wants to make itself more attractive to buyers, especially after it has been vetted and turned down by the bankers as a bad investment. 

So, you are probably asking, what has happened recently that has me believing the Bruton Smith organization is ready to pull the trigger and announce their  buying of the NHRA  at the opening of their new four-lane Charlotte dragstrip in mid-September?

Part of the answer is that recently a couple of sources close to the Bruton Smith organization told me so. Around the first of the year, soon after the HD Partners deal went dark, I started getting calls telling me Smith was negotiating with Tom Compton. Naturally both parties denied this. [Understand that no one working in an organization like Bruton Smith’s or the NHRA could verify a deal like that on the record without getting fired.] So, this has to be a matter of trust for me.

My sources also tell me that the primary stumbling block to making a deal is that SMI is not going to pay the inflated price offered by Eddy Hartenstein’s group for just the pros and the NHRA property.

Anymore, I trust my sources more than any on-the-record PR guy. I quit listening to those guys because they have their company’s agenda foremost. I called Tom before the HD Partners deal fell apart and left him a message saying I was hearing that the deal was in trouble. His spokesman called me back to say he had personally talked to Tom and there was absolutely no basis for my concern. Well, we soon learned the truth of that statement.

Want another sign? Fast forward five months. Bruton Smith goes to war in Charlotte with the local political figures to make sure he gets what he needs to build his drag strip. He uses up a lot of his personal influence in the Charlotte area to force the building of that track down the locals’ throats. I wondered at the time why a businessman of Bruton’s skills would take the risk he did if promoting drag racing was just a casual enterprise for him.

At the same time the Smith organization was on a buying spree of existing oval tracks and was spending lots of cash, but the popularity of NASCAR started dropping noticeably and drag racing apparently was enjoying a rise in fan popularity. And Smith didn’t get the race dates he wanted from NASCAR.

After years of admitting he would like to own the NHRA and reportedly making several serious tries to do so, recently Bruton Smith suddenly soft-pedaled the idea.  Up to now Smith hasn’t held many press conferences without speaking on the subject of buying NHRA. A sudden turnaround about that subject makes me suspicious, I admit.

During the NHRA event at Sonoma (a California track owned by SMI) DRO’s Darr Hawthorne asked Bruton Smith’s son, Marcus, about buying the NHRA and, according to Hawthorne, Smith was visibly uncomfortable talking about the issue. At the time I questioned why talking about the possible acquisition of the NHRA might make him uncomfortable.

Another blip on my radar scope is the four-lane track Smith is building in Charlotte. The current NHRA administration has never endorsed a four-lane track, but in interviews and conversations Bruton Smith has mentioned the four-lane drag strip and his thoughts of running four cars down the track at the same time. Now he has built a four-lane track. I don’t think he spent the extra money it took to do that on a whim. I think he did it because he already knows what changes he is going to make when he takes over the NHRA.

Late last week I got yet another call from a source close to the organization saying that the word they were hearing was that an announcement of the NHRA sale “could” come at the debut of the Charlotte track.

Also, during a recent press conference in Charlotte the SMI management team let it be known that the press conference coming to announce the official opening of the new Charlotte dragstrip would include representatives of almost all of the NASCAR teams and their sponsors. I have asked myself why SMI would make a full-court press to get the NASCAR teams and sponsors to that kind of function. Perhaps to announce a new opportunity for those race teams and sponsors? What better group to announce the new NHRA in front of? What a way to kick off the NHRA second-half season! 

Two last observations.  In my opinion Tom Compton and the NHRA board want to sell the sanctioning body. They’ve already tried once and they will do so again. The only way they can make the really big bucks is to make that happen. During his presidency of the sanctioning body Tom has never faced the financial uncertainty that the series, major sponsors, and teams are facing now. Neither he personally, nor the sanctioning body, has ever suffered the ire of the press like they are getting now. Being the president or a vice-president of the NHRA isn’t a fun or glamorous job these days. For a guy like Tom Compton, who came to the job because of his business acumen not his experience in, or love of, drag racing, the current situation has to be agonizing, especially when less than a year ago he thought he was about to cash in on all of the hard work he has done. I think he has already left the job mentally.

As for Bruton Smith, his son, Marcus, and his SMI organization, I think they are chafing under the iron hand of the NASCAR’s France family. The Frances are not going to relinquish any power any time soon.  I think Bruton Smith and SMI will remain with NASCAR for the cash it delivers, but Smith is ready to see what he and his management team can do running their own national automobile sanctioning body, especially if they were able to do it and at the same time get ownership of the NHRA’s most prestigious and profitable tracks. For a publicly traded racetrack-management company that kind of acquisition would seem to me a “no brainer”.

Bruton or Marcus Smith may not announce the purchase of the NHRA at Charlotte this year, but I think there is a good chance they will. If they don’t, I’ll take bets and give good odds that it isn’t a matter of if but just when that Bruton Smith buys the NHRA and Tom and his team are strapped into their platinum, golden, or brass parachutes and are out the door.  

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