Changes at NHRA

5/30/2007
Source: HD Partners Acquisition Corporation

NHRA ASSETS SOLD

HD Partners Acquisition Corporation Announces Proposed Acquisition of NHRA Pro Racing From the National Hot Rod Association

SANTA MONICA, CA--(MARKET WIRE)--May 30, 2007 -- HD Partners Acquisition Corporation ("HD Partners") (AMEX:HDP - News) (HDPU - News) (HDPWT - News) and the National Hot Rod Association ("NHRA"), the world's preeminent drag racing organization, today announced the signing of a definitive agreement under which HD Partners will acquire all of NHRA's professional racing assets, including the NHRA POWERade Drag Racing series, together with a broad set of rights to commercialize the NHRA brand. Upon consummation of the transaction, the acquired assets will be held in a wholly owned subsidiary of HD Partners named NHRA Pro Racing. The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

Eddy Hartenstein, Chairman and Chief Executive Officer of HD Partners, said, "We are extremely excited by this truly unique sports media and entertainment opportunity, which provides an ideal platform for our management team to leverage their skills and expertise in creating and marketing compelling entertainment experiences and building strong brands. NHRA President Tom Compton and his team have done a remarkable job positioning the NHRA POWERade Drag Racing series as one of the country's top motorsports events. We see tremendous opportunities in working closely with Tom, who will become President and CEO of NHRA Drag Racing, to take the sport of drag racing and the overall NHRA experience to the next level."

Wally Parks, Founder of the NHRA, said, "Today's announcement represents a monumental milestone in the 56-year history of the NHRA. By virtue of the agreements we have reached with HD Partners, we are positioning the NHRA POWERade Series for great future growth and success, while at the same time are assuring the long term vitality of the NHRA."

Upon closing of the transaction, Eddy Hartenstein will serve as Chairman of NHRA Pro Racing, and Tom Compton will assume the role of President and CEO and be a member of the Board. Robert Meyers, HD Partners' current Chief Financial Officer, will become the Chief Financial Officer of NHRA Pro Racing. Peter Clifford, currently Executive Vice President and General Manager of the NHRA, will become executive director of the NHRA, as well as a consultant to NHRA Pro Racing.

Dallas Gardner, Chairman of the Board of NHRA, said, "This transaction provides the best opportunity for NHRA to fulfill its core mandate to protect, preserve and promote the sport of drag racing. It provides long-term financial stability to the NHRA, an unhindered opportunity for the NHRA POWERade Drag Racing Series to flourish and grow, and an important strategic and long-term relationship between the NHRA and NHRA Pro Racing."

Tom Compton, president of the NHRA, said, "While we have made tremendous strides over the last eight years growing the professional side of the sport, today's announcement is the next logical step in the evolution of the sport of drag racing. This new relationship brings with it access to investment capital, additional expertise, relationships and complimentary skill sets to assist the current management team to drive key initiatives to accelerate the growth of the NHRA POWERade Drag Racing Series."

Under the terms of the agreement announced today, HD Partners will acquire:

-- The NHRA POWERade Drag Racing Series and all professional NHRA drag
racing assets and opportunities, including NHRA's existing television
broadcast agreement with ESPN;

-- An exclusive, worldwide, perpetual license to the NHRA brand for
professional drag racing activities;

-- Broad and extensive rights to commercialize the NHRA brand, including:

- Exclusive professional racing and "Official NHRA" sponsorship
and licensing rights;

- Exclusive media exploitation rights in broadcast television, home
entertainment and new media;

- Exclusive merchandising rights relating to both professional
racing and the stand-alone NHRA brand;

-- Four NHRA-owned race tracks, an additional long-term track lease in
Pomona, California and the NHRA headquarters building in Glendora,
California; and

-- A video and photo archive chronicling the history of drag racing,
which includes more than 20,000 hours of video and film.

The NHRA POWERade Drag Racing Series currently consists of 23 national events held at locations across the country. These multi-day events, which can draw as many as 125,000 spectators over three or more days, provide fans, racers and sponsors a unique ability to interact with each other through access to the racer pit area. In addition, NHRA's Nitro Alley display and interactive area located at each national event provides fans with a race-related entertainment experience, including the ability to get behind the wheel themselves in motorcycle and funny car simulators. All 23 national events are aired exclusively on ESPN2.

The NHRA will receive approximately $121 million in total consideration, consisting of approximately $100 million in cash, approximately $9.5 million in HD Partners common stock and the assumption by HD Partners of approximately $11.5 million in debt and liabilities. In addition to retaining its non-professional racing activities and sanctioning role, the NHRA will continue to offer its membership program and publish its weekly publication National Dragster. The closing of the asset purchase and related transactions is subject to stockholder approval, regulatory clearances and other customary closing conditions.

HD Partners will file a Current Report on Form 8-K with the Securities and Exchange Commission, which more fully describes the transaction.

In connection with the proposed acquisition, Morgan Joseph & Co. Inc. served as financial advisor to HD Partners and Latham and Watkins LLC were HD Partners' legal advisors. Duff & Phelps, LLC provided a fairness opinion to the HD Partners board of directors.

A nationally recognized investment banking firm provided a fairness opinion to the NHRA board of directors in connection with the transaction and Morrison and Foerster were the NHRA's legal advisors.

I don't think that will have much of an effect on the ordinary fan, but I wonder what effect it will have on the pros. :HMMM:

If you listen closely, You can hear taps being played.

(The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.) COPIED FROM NHRA WEBSITE


How can a non-pofit corporation that is said to be MEMBERED OWNED be sold??????? and to who gets the 121 million???? all of the members of NHRA????
I am a member i guess i will be checking the mail box for my share :LOL: .

Sid

Yeah, look real close every day :)

Is this one of the Humpy Wheeler companies????

Pretty much all your membership entitles you to is National Dragster, a rule book and some decals. And maybe some insurance. I don't think the members ever owned NHRA.

Pat

i hear it also:(

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Originally Posted by nitrowarrior

If you listen closely, You can hear taps being played.

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It's odd that the NHRA is "non-profit" given that they (1) put on 23 national events that draw quite a few people, (2) sign major sponsors who pay major money to advertise, and (3) return such crummy monetary awards back to the racers. How can they NOT make a profit you ask? One way is to pay huge salaries to a select few at the top, run an inefficient, government-like operation that blows money or accumulate a large slush fund....my guess is the first one; the huge salaries. There is a legal difference between a "non profit corporation" and a "not for profit corporation"

It appears that the professional part of the org is separated from the little-guy amateur part....am I reading it right?

Mike in Tucson

Now we get the 100 dollar tee shirts,get to see corny commercials all over the air waves and also get to pay out the nose to get in the track,The vendors at the track will be hit for more money,the parking goes up,and if its not profitable ,no racing in your area.
Also the little guy will have no chance because of the money it will cost to participate.Basically its going commercial like nascar did or selling out if you like that term better.
Garbage advertising and initiate the if you talk bad about us screwin you ,you get fined or banned.
You know how its went in the past when his type of sale/merger goes down...........probably try to get em on unleaded 93octane too:LOL:

As of this morning, HD's stock was up to 8.26. Initial price was 8.00. Maybe we all ought to buy some stock and get the money back we'll spend at the track. :LOL:

The capacity for negativism that some possess astonishes me even with all the years I've had to observe it repeatedly.

Here's some info on HD Partners; http://sec.edgar-online.com/2005/12/...3/Section4.asp

If you take the time to read (and learn) you'll see the management team is made up of the principals who built Direct TV. I would guess they see an opportunity to better promote, and grow, the NHRA brand. Given that they are professionals at building entertainment based companies (at least one) their odds of being right are better than those of say...................oh, some hot rodder who's never built any kind of company. Yeah, they could fail too, that's what the free market allows.

At least they're trying to make something happen instead of just sitting around carping. Of course the carpers have nothing to lose. If these guys are successful in making NHRA more popular, and profitable, they'll be hailed as "greedy" (never mind the risk and effort they expend), and if they fail then the nagativistas can say "I told you so".**)

My question is still who gets the $$$$$$$$$$ ?
NHRA was sold for 121 mill with 10 mill in bills by my math that is a 111 mill profit for somebody with a non-profit corp.:HMMM:

Quote:

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Originally Posted by 1badmofo

My question is still who gets the $$$$$$$$$$ ?
NHRA was sold for 121 mill with 10 mill in bills by my math that is a 111 mill profit for somebody with a non-profit corp.:HMMM:

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The answer to the first is.........shareholders of the corp, you know, those folks who knowingly ponied up risk capital in the beginning or along the way with no guarantee of a gain.

The second is a misunderstanding of what profit is. This was an asset sale, those assets had an initial cost, plus possible improvements over time (such as the four tracks). If there is any money over and above the costs (less any depreciation) that would be a capital gain to the share holders (if there's a distribution) and would be taxed accordingly. If there's a loss, the shareholders eat that too.

Wally Parks, Founder of the NHRA, said,

I thought wally was dead? if so how could he comment?

My only worry is they are gonna cheese it out, Right now there is a select crowd that is involved in drag racing, the mainstream public could care less about it, already with the airing of driving force, your starting to see a rockstar effect , im worried with the new media exposure it will get, that it will lose its cool, and these guys will be household names, which is good for the drivers, but ultimatly bad for the die hard fans, look at nascar. I hope that with the new backing it will get better and not worse!

yeah you will get the most RETARDED people in the way in the pits, asking john force if his car has a/c or a heated seat. and the people will be flocking to pro stock in order to ask is that a v8? i like how its a 5 speed automatic. OMG i can already see the need for idiot cleansing :LOL: :LOL:

Primedia all over again?

Or just one of those send the jobs to China or simply fire the workers and loot the pension fund, strip the assets from the company by the CEO and his cohorts and bail out with a golden parachute deals?

Higher ticket prices . . . ala NASCAR.

In this day of self esteem for everyone and PC and just so's everyone is happy I recommend restrictor plates for the racers.

I'm with NitroWarrior about the taps bit....

Sat. night I watched the Topeka qualifying on ESPN and Mike Ashley and Kenny Bernstein were asked for their comments on the issue. Both seemed to think it was going to be good for the sport, but I did note a bit of skepticism on Kenny's part. Sort of like a wait and see attitude. Though Don Garlits is no longer active, I'd be interested to hear what he has to say on the subject. I know that for years he and Wally Parks had a running feud which led to the birth of the PDA in the late '60's.
Sitting in the stands Sunday at Topeka it was apparent that the majority of fans were there for the Pro classes. The lack of heads up racing in the so-called Sportsmans classes might be good for the racers, but causes quite a bit of grumbling amongst the fans.
I fully realize that the myriad of classes that existed in the '60's is outdated, but when a couple of 8.90 cars launch and then delay and sandbag at the finish line the average fan doesn't understand the concept. It makes for some pretty boring racing, if that's what you want to call it, from a fans point of view.

Gee, Imagine the NHRA taking it on the chin from so many drag racing 'fans'. They have been the mainstay for sanctioned pro/am racing for so long and still get little respect from so many. Who's better? the IHRA? that regional series. Most in cali have never heard of it. NHRA is far from perfect but puts on a good show and until something better comes along it will remain THE leader in drag racing.

Quote:

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Originally Posted by Mike in Motown

Gee, Imagine the NHRA taking it on the chin from so many drag racing 'fans'. They have been the mainstay for sanctioned pro/am racing for so long and still get little respect from so many. Who's better? the IHRA? that regional series. Most in cali have never heard of it. NHRA is far from perfect but puts on a good show and until something better comes along it will remain THE leader in drag racing.

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If that is aimed at me let me explain something. I have been around drag racing since 1959 having worked in the timing trailer at the Nats in Detroit and I don't consider myself to be just an average fan.
My observation was relaying of what I heard of the many fans in the stands at Topeka.
As with anything they will different opinions, but the fans are what keeps the series going and if you don't listen to your base you'll not long be in business.
And no I don't think the IHRA is a better series, but the old AHRA gave Wally a run for his money in California in the '60's

My comments werent aimed at anyone in particular. I just seems that so many bash the NHRA and its the best show in town at this time. Its like NASCAR, a lot like to complain about it but show me a better program.
Im not saying its without problems but still puts on entertaining PRO racing at national events. Truth be told theres something to be said for removing the super classes at national events because they are a snore to watch. Im all for those who like to run those classes but indexed throttle stops are no fun to watch. I'd rather see 10" tire outlaws run during the pro turn around time.
I think the aquisition will lead to seperation of the pro and ama programs and im not so sure thats a bad thing.
NHRA when compared to other racing organizations still puts on a good bang for the buck program fan wise IMHO.
Im NOT trying to a smartass here but how'd that AHRA thing turn out?

Quote:

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Originally Posted by Mike in Motown

Im NOT trying to a smartass here but how'd that AHRA thing turn out?

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;) :D

I see an opportunity for anyone who starts off thinking the new owner group are a bunch of rubes who are so stupid that they'll make the program so crappy that nobody will enjoy it anymore, and on top of it will price itself so high that all the fans will be driven away. If you're confident you're right put your money together and start a new organization to do it the RIGHT way and just roll in the dough those dummies would supposedly be throwing away. If you're correct your timing couldn't be better. It's the American way........you know, the better mouse trap thing

It's all about money...NHRA needs it to grow and gain some of the popularity and fan following that NASCAR has. I remember hearing the same doomsday stuff when NASCAR picked up Winston as a sponsor....sure didn't seem to hurt NASCAR any!!!!

As for dummies roaming the pits, sounds good to me!!! They're putting down their $$$$$ to get in and this money helps the payout which helps me keep racing!!!! Any participants at an NHRA even should be treating the fans as their best friends!!!! Butts in the seats equates to money at the pay window. Ask Tech or NTF what their many years of experience has shown the amount of $$$$ it takes to run even a weekly show, let alone a divisional or national event!!!!

All I can say is well done, NHRA!!!! Now lets get the show on the road, fans in the seat, and some more $$$$ back to the racers!!!!

Quote:

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Originally Posted by Mike in Motown

Im NOT trying to a smartass here but how'd that AHRA thing turn out?

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I'm no expert on that either, but C. J. "Pappy" Hart who ran Lions for a big part of the '60's was driving force in my opinion and undoubtedly one of the greatest figures in all of drag racing. Uncle Bob can probably tell you more about it than I could.
I do know that "Big Daddy" Don Garlits had a falling out with the powers to be at NHRA in the mid to late '60's over pay out money amongst other things. I guess it was the main reason he, along with others formed the PDA (Professional Drivers/Drag Racing Association).
I know for a fact that back in the late '50's early '60's if you wanted big names at your strip you were going to have to pay appearance money and/or tow money. In '59 Connie Kalitta drove down from Michigan to take on our local hot shot Dick Vest. One of the big names I had the pleasure to flag.

[QUOTE=Dave Severson]It's all about money...NHRA needs it to grow and gain some of the popularity and fan following that NASCAR has. I remember hearing the same doomsday stuff when NASCAR picked up Winston as a sponsor....sure didn't seem to hurt NASCAR any!!!!

QUOTE]



EXACTLY!!


My point is simply this. NHRA has been there and is still THE main organizer of drag racing sportsman and pro. Faults aside its the best thing going right now and has been for a long time. Title and organizational rights of the pro side is where they feel their biggest revenue generator is and it makes no sense for new blood to mess it up.


Question to all: Should the sportsman participation at national events change, be replaced, eliminated?

Curious to see what you guys think about this.

Question to all: Should the sportsman participation at national events change, be replaced, eliminated?

Curious to see what you guys think about this.

I discussed this with Tech last night and we agree that heads up racing would be more popular with the fans than bracket racing. That being said, it would not be practical to go back to the class structure of the '60's as it would take forever to run a national event.
My personal opinion is to eliminate the E.T. brackets and run on national records giving staggered starts to slower cars but determined by the E.T. record for the class the car is in. That would eliminate delay boxes and sand bagging at the finish line as there would be no break-out.

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Originally Posted by NTFDAY

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My personal opinion is to eliminate the E.T. brackets and run on national records giving staggered starts to slower cars but determined by the E.T. record for the class the car is in. That would eliminate delay boxes and sand bagging at the finish line as there would be no break-out.

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That sounds a lot like competition eliminator.

First bit of bracket racing I participated in was at Lions Dragstrip.

They called it index racing I believe.

The basics were, if you were running a car turning 14.11 or so you entered the 14 second class.
Running 13.99 was a breakout and you lost.
Running a 15.0 was a breakout in the other direction and you lost.

It took care of the sandbagging situation quite well.
I only ran it a few times, but every time, late in the afternoon the cool sea air would roll in and you'd break out on the fast end.

It's not fair to have a car running 9.90's compete in the 12 second bracket class.
All he has to do is get a good start, stay with the racer in the other lane and drive around him whenever he wanted.
Saw that more than few times at the March Meet.

It is a tough question to answer, bracket racing has been good for drag racing, but perhaps it doesn't belong at the national events.

My feelings are, toss bracket racing entirely and bring in idex racing.
One of the things that make it fun is you can take your Ford coupe and run it against a Corvette and see how you do.
The mismatch in car types running a particular index class makes for some reasonably interesting racing for the spectator and a whole lot of fun for the drivers.

Let's face it, not many of us are able to compete in C/Gas and run on the record due to financial constraints for most, but building an index racer that runs high 10's isn't too difficult to do....

Its index racing now. Either by class or individual car type in comp. Comp has a lot of this covered. The enemy is THROTTLE STOPS, PERIOD!! Explain to the noob you brought to the track why the car falls on its face right after launch only to take off and run just over a number. Only to be followed by two totally diffent cars leaving on staggered starts where its ok to run under.:confused: It will never happen but IF I had my way I'd run some 10" tire outlaw, heads up stuff and a non electronic nostalgia eliminator 7.60 class to pass time between pro rounds. Oh by the way the heads up alky classes could stay.

As said, there needs to be fillers for the 75 minutes between rounds of the Pro Class. The Top Alcohol classes are great and are pretty near Pro anyway so they should stay. I much prefer the comp eliminator classes to the 7.90-8.90-9.90 classes. The throttle stops and electronics have ruined those for a spectator. They are just plain boring, though obviously popular by the number competing in them. If they must stay, then limit them to the semis and finals on Sunday, have everything else run off on Friday and Saturday between qualifying rounds. I agree some 10.5 Outlaw or Nostalgia class cars would also be great fillers. A lot of fans also like to watch the handicap races trying to bet if that SS/AA Cuda can run down the late model Mustang. Those are exciting. I would much rather see them run on Sunday than the X.90 cars.

Pat

The Top Fuel Harleys were at Topeka and they were a crowd pleaser.
When Topeka moved to late May early June the lost the Pro Stock Bikes which I think was a shame. Though I don't care much for the Suzukis, they do put on a good show and having a couple of gal riders doesn't hurt either.

Further clarification from SEMA article;

PROPOSED ACQUISITION OF NHRA PRO RACING ANNOUNCED
Editor's Note: Last week we reported that the NHRA was under new management. To clarify, the NHRA will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

HD Partners will acquire all of NHRA's professional racing assets, including the NHRA POWERade Drag Racing series, together with a broad set of rights to commercialize the NHRA brand. The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

Further, the management team at NHRA will remain intact.




Looks like no change in the management of the non-professional classes some have been discussing here.