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Apr 9, 2005

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Bruton & NHRA – What's Up ?

By Phil R. Elliott

There have been many stories on the Internet about O. Bruton Smith’s interest in purchasing NHRA. You’ve probably read one or two and formed an opinion as to just what would happen if this man, who has been on Forbes 400 Richest Americans (http://www.namebase.org/sources/gW.html) list for about ten years, actually purchases one of the strongest sanctioning bodies in the history of motorsports.

Not me. I'm going to wait and see on this one, and will not stand for or against -- yet. I can certainly see how Mr. Smith could make things at NHRA worse but believe he could also make things way better.

Several of the drag race webzines have taken their shots at this story, causing literally hundreds of forums and blogs to overflow with mostly negative opinions. Very little of this froth is factual, with a couple exceptions. When he tired of all the supposition, Jeff Burk actually did a telephone interview with Mr. Smith (http://dragracingonline.com/innerview/vii_3-brutonsmith-1.html).

During the week preceding the NASCAR “cup” race at his own Bristol Motor Speedway, Mr. Smith was interviewed for the Bristol Herald Courier by my friend David McGee -- an ex-Drag Review editor like I am. (http://www.TriCities.com/servlet/Satellite?pagename=TRI%2FMGArticle%2FTRI_BasicArticle&c=MGArticle&cid=1031781940873).

Between those two articles, we get an idea of Mr. Smith’s intent.

On the other hand, NHRA spokespersons, from president Tom Compton on down, categorically deny that discussions are even taking place.

According to Smith, he recently spoke to Wally Parks about purchasing NHRA. And though he admits to discussing such possibilities with Compton over the past year, Smith also made it clear that his financial dealings were with Parks, who as the organization’s founder has the proper credentials for decision-making. Smith even suggested that he and Parks had similar visions for the future of NHRA. It has been my opinion for a very long time that Wally’s vision and that of the present NHRA management is about 180-degrees apart.

I'm not certain the rumored discussions are actually under way. But this much discrepancy always throws up flags of all colors in my cynical mind. After all, NHRA used that same “categorically deny” phrase when asked about such things as Modified Eliminator and Pro Stock Truck right to the very moments the two eliminators were dismissed.

And, while I hate that bankers interested only in bottom line numbers currently run NHRA, I have watched Mr. Smith evolve his corporation and the purchases he's made. The Charlotte, Las Vegas, Bristol and Sears Point tracks are certainly major examples of what he can do in relatively short periods of time. As an example, during the final stages of the Charlotte rebuild, the state wasn't moving fast enough on a new section of 4-lane that was to be a major access to/from his track so Mr. Smith loaned North Carolina the money to "geterdone."

What Smith has stated -- about spending $100 million in the first year to improve NHRA tracks and increase their marketing department -- sounds good to me.

So, some of the stated opinions out there in bloggerland have been, “I think (Bruton's) even more of a ‘it's all about the money’ person than NHRA,” and “I think right off the bat you could kiss Stock, SS & Comp goodbye.”

It gets worse. One person suggested that Mr. Smith “is known for being a ruthless businessman. No thanks, Bruton -- stay away from NHRA. It's screwed up enough now, we don't need a megalomaniac moneygrubber running the show.” Or how about this person who claims to be more than a normal race watcher? “This guy will gut NHRA if he gets his hands on it -- it will be PS, PM, TAD, TAFC TF, FC, & Top Fool Harleys.” Another flat stated, “I think this guy will immediately ditch ANYTHING that is not mass-marketable.”

Another looked at both sides of the equation pretty well. “I’m all for NHRA not being bought but I can see the things (Smith) has done at the tracks he has purchased. Like Sears Point … He vastly improved the race track and the drag strip … to accommodate more paying customers.”

Bruton Smith and Speedway Motorsports, Inc. has been doing quite well for the most part. Stock has gone up and stockholders remain happy with the decisions that have been made. To continue that trend, Mr. Smith and his many advisors must search for additional revenue creators.

Let’s look at some history. When Mr. Smith purchased Bristol International Raceway from Larry Carrier, the property included Bristol International Dragway. Smith hired Jeff Byrd to manage the facility, including overseeing a huge reconstruction project. Spectators and racers that had been attending events at either track felt that both were fairly adequate. No one had any idea just how far Mr. Smith wanted to go. I was not a fly on the wall during initial conversations between Byrd and his new employer. I do know that Smith had very little background in dragracing. He’d looked at the records and felt the dragstrip and its pits would better serve the oval track as camping and parking areas. It was Byrd who introduced Smith to marketing folk from R.J. Reynolds and NHRA, and it was that initial meeting that sparked the dream of a Winston Invitational that evolved into a full-fledged and very profitable NHRA national event. Without Jeff Byrd, these potential NHRA buyout stories would not be circulating at all.

Sometime after the purchase of Bristol, Smith looked into the purchase of NASCAR itself. When that idea was swatted back, he looked into forming a stockcar sanction of his own, using the tracks he already owned as his base. Possibly, his motive was one of applying the pressure of a possible coup to see if NASCAR was bendable. They weren’t.

Is the current interest in dragracing a similar action?

After all the mud slinging toward a guy I guaranty none of these bloggers has ever met, there came an Email proclaiming, “NHRA has been sold.”

Some of you may have seen it, read it and recognized the author, a name I will leave out of this editorial for several reasons. He is a very reliable source but in this world of hackers and folk that seem to enjoy messing up our computers and lives, it most certainly could have been generated elsewhere.

It basically said, to “…all you folks that have feared this and those of you who have prayed for it -- it's a done deal. The NHRA has been sold to SMI.” The Email went on to give attributions and tell where the complete story would be posted. It was hard to accept in its brevity and a further problem with believability was that the website listed has been down for some time. The message finished with a confidence building, “It'll be all over the net today, so stay tuned.”

I quickly built this press release into a math problem, adding the good points, subtracting the bad, multiplying my conjecture of why Mr. Smith would want NHRA, and dividing the whole mania by the fact that it was April 1.

Oh no, had I (and hundreds of others) been hoodwinked?

Well not really because I had been suspicious of both sides of the story all along but … I do like conspiracy and a good mystery.

I had first said "April Fools!" but still thought there was a grain or two of truth. If it were a joke, "cruel" would be the correct description. If the guy listed as the sender of that Email was indeed behind the hoax -- and he is not normally a perpetrator of such things -- he has a great deal to lose. This kind of thing is frowned on heavily by NHRA and would certainly mean all future credential requests for national events would be turned down.

My math problem intensified. I went back to the other stories NHRA categorically denied. I began to wonder about the unconfirmed stories about the settlement in the class action lawsuit against NHRA by the PS Truck Owners. Could these numbers be so high as to cause NHRA bankruptcy worries? I added in the national event weather setbacks of 2003 and 2004. Suddenly, I was staring at an algebraic logarithm that had far too many unknowns for me to figure out. Like all those bloggers, I was just theorizing and totally clueless. No matter what I read, or what I could think up, I honestly had no idea.

I have heard that the 2005 NHRA national events have been doing better. Still a couple successes surely cannot compensate for the bad times NHRA has had. The “what ifs” began to outweigh the “no ways.”

I believe with all my heart that should this sale be made, Mr. Smith is certainly looking at bottom lines. And, unlike a couple of those opinions I shared above, those bottom lines have included Sportsman drag racing, at a regional and national level and the membership numbers that allow National Dragster to be such a great profit center for NHRA. It could easily be called the most successful “house organ” in history. Axing all of that seems to be a rather poor business decision.

Also, if this sale happens, it will not be some hasty get-back-at-em deal like when Billy Meyer bought IHRA (when NHRA couldn’t be had) and turned everything into heads-up eliminators. This time it will be a very thorough business dealing with every "I" dotted and every "T" crossed because of those previously mentioned stockholders that like their dividends.

In Jeff Burk’s recent sum-up, he feels that even the supposed “no sale” on the cash register will reap big benefits to NHRA and its racers. He feels that perceptions of dragracing from Corporate America just changed for the better.

Though I disagree that this chapter is over – Bruton and his lawyers may just be pulling back for another plan of attack – I agree totally that potential sponsors have just been given a little sampling of NHRA. To paraphrase Burk, if Mr. Smith sees the value in this deal, maybe we should have a second look.

But what is that value that Smith sees? Is there some sort of ulterior motive? Is it the racetrack acreage in Indianapolis, Columbus, Gainesville and elsewhere that draws him? Is it the annual souvenir concession numbers? Is it the increase in ticket sales at the national events holding closely to projections? Is it the already-in-place television package? Is it the huge membership?

People have asked me if I personally think Bruton Smith is legitimately after NHRA. I believe he is damned serious – the man doesn’t play many games.

But I don’t think the way Mr. Smith does. I can’t look at a property as diverse as NHRA and understand its multi-faceted dos and don’ts, pros and cons and ins and outs. Those Xs and Ys I mentioned above get even bigger -- it all has to be broken down by the very bean counters that I wish didn’t have to be involved.

I did think up a very weird little coincidence though. Mr. Smith's company is called SMI -- Speedway Motorsports, Inc. Billy got his money from his father's company SMI -- Success Motivation Institute.

Thanks for checking out the PhilZone portion of Draglist.com. If you have accolades, complaints, comments, questions, or if you want to share a story, please feel free to post it on the PhilZone Message Board. Phil

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