Volume X, Issue 5, Page 53

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It’s time for NHRA management to give the racers a piece of the action

The one complaint that almost all of the sportsman and professional owners, drivers, and crews have is that they haven’t had a purse increase in a decade or more and, by God, it’s time they did.

I agree with them but I also understand that, despite what most every one of those who write letters to this magazine raging against the NHRA machine says, there are some viable if not convincing reasons for the NHRA management’s reluctance to increase purses across the board.
 
First, like it or not the NHRA needs to the get the track owners of the national event venues to go along with the idea, and I think that those folks may not be all that interested in paying out more of their share of the proceeds from a national event. Many of them aren’t that happy with the risk they take for the reward they get in the way of PROFIT after an NHRA national event. Understand that rain or shine, bad crowds or good, profit or no profit, the racer purse at an NHRA, IHRA, NMCA or ADRL event generally gets paid regardless. Believe me, that hasn’t always been the case for racers.

Second, the NHRA and the track management take a serious gamble every time they stage one of these events. There is no guarantee of success promoting outdoor events. Think about this for a minute: Just the guaranteed racer payout for the average NHRA race is around $700,000, and it’s around $350,000 for an IHRA event. Before any other expenses get covered or profits made, the purse money comes out. And trust me, series sponsorships don’t cover that expense – you don’t think the Coca-Cola Company is paying the NHRA around $15,000,000 a year to cover prize money, do you?

Despite what you conspiracy theorists out there may think, promoting outdoor races at any level is a serious gamble and can lead even the most wealthy among us down the road of fiscal ruin. Just ask former IHRA owner Billy Meyer about that sometime.

Based upon some personal research, I believe the average IHRA event and NHRA event return about 10-15% on investment. I have a good source that says the management at Houston Raceway Park invested about $3,000,000 to stage and promote their NHRA national event, and they turned a profit of around $300,000 after settling with the NHRA. That’s a hell of an expensive gamble to get a ten percent return.

You can probably use that same formula for an IHRA, ADRL, or NMCA event. At least in Vegas when you make a large bet you know they are going to spin the wheel or deal the cards and you have a chance to beat the house; in outdoor racing sometimes the houseman just scoops your money off the table and shuts the game down.

Because of the gamble, the NHRA must start the season with money in the bank so that one or two failures in a row don’t put them out of business. Don’t think that could happen? Again, ask Billy Meyer.

But on to the matter of a purse increase. I’ve explained some of the reasons why there is some reluctance on the part of the NHRA management to raise the racer payroll, now let’s talk about why it is imperative that they do so.

First, for the good of their relationships with the professional racers they need to give them a least a token raise. Most of the NHRA sponsors have been secured in part or totally by the pro and sportsman racers or team owners. Without those racers’ efforts the NHRA would be screwed. The sanctioning body keeps hiring firms to help them market the brand but thus far all of those hires have been abject failures. Lucas Oil, Jegs, Oakley, UPS, Budweiser, the U.S. Army, Rockstar and Monster energy drinks, and American Smokeless Tobacco, just to name a few, were brought to the table by the racers, not the sanctioning body. The NHRA owes them a reward for their efforts. The racers need to feel that the NHRA management and tracks appreciate their efforts, and a handshake and a pat on the back isn’t going to be enough.

Second, Tom Compton and his staff continue to proudly tell anyone that will listen that the organization is making more profit each year and can back that claim with their tax returns. Guys who haven’t had a raise in over a decade and are told they aren’t likely to get one just love to hear that. It is difficult for NHRA’s or any sanctioning body’s racers to understand why they can’t get even a token raise when the facts indicate the money is there. 

So here’s the issue. Tom Compton and his management group keep telling all of us the NHRA is more successful than ever, and then they spend the profits on pay raises for them, their staff, new towers, and luxury box seats, and capital investments but no pay raises for the stars of the show. In fact, in the case of sportsman racers, NHRA has cut the payout! So as a racer, and especially if I’m a professional racer, I have to be asking myself when will I start sharing in the success of the organization?

As a small businessman I’ve learned that it’s not so much the amount of the raise that counts as it’s the act of giving a raise. Those that are contributing to the success need to feel like they are appreciated.
As good as the NHRA management team and other sanctioning body teams may be, they have either forgotten or choose to ignore this basic tenet of good business management and personnel management. 

They keep saying that they have to re-invest in the business of drag racing so that it will be more successful (i.e. make more money). And if the racers ask for more money management’s stock answer is, “Get it from your sponsors.” That, gentlemen, is a callous, uncaring, unrealistic and frankly stupid management style and it only further infuriates your racers and their sponsors, especially those that also sponsor the NHRA too. 

The truth is that no intelligent racer seriously believes that the NHRA or any sanctioning body can raise the purses to a level that will allow them to make a living or even break even. But it is reasonable for them to expect to share in the success they are in large part responsible for.

The NHRA’s Tom Compton and his board of directors need to take a look at their finances at the end of the fiscal year 2008 and take some of those millions of dollars of profits and monies on hand and earmark it for the purses and/or points funds. The racers would just like a token increase, an indicator that they are appreciated for something other than a profit center to be “monetized”. As businessmen/racers they are tired of seeing new towers, new suites at the NHRA-owned tracks and raises for the board, and trying to understand how that helps them or their sponsors.

It’s time for the NHRA to invest in their product and I don’t mean the tracks or management, I mean in the race teams without which nothing else would exist. And if NHRA truly wants the racers to be their partners and work with them, how about beginning to treat them as equals instead of poor and stupid relations that have stayed at the table too long. It just requires basic People Management 101! 


jeffburk@dragracingonline.com