Q and A on why the sale of NHRA
Q: Why did NHRA enter into this transaction?
A: After careful consideration, the NHRA Board of Directors determined that this was the best opportunity for NHRA and its mandate to protect, preserve and promote the sport of drag racing for a number of reasons. First, it provides long-term financial stability to NHRA. Second, it provides the NHRA POWERade Drag Racing Series with an unhindered opportunity to flourish and grow with access to capital, key relationships and complementary skill sets to build and grow the professional series into a major sports entertainment property. Third, NHRA's Board of Directors believe that the important long-term strategic relationships that will remain between NHRA and NHRA Pro Racing, including the perpetual sanctioning relationship, will be of great benefit to the future strength and growth of sportsman and amateur racing as well as professional racing. And finally, this transaction will leave NHRA debt-free, financially strong, and ensure NHRA's long-term viability as the leader in the sport of drag racing.
Q: What are the other key elements of the deal?
A: NHRA Pro Racing will conduct professional drag racing while NHRA will focus on amateur and sportsman racing. NHRA Pro Racing has also entered into agreements with the association under which NHRA will provide racing operations and all sanctioning services to the new company. Finally, NHRA Pro Racing has been granted a set of rights to commercialize the NHRA brand, including rights related to the association's video and photo archives, multi-media products, new publications and merchandise.
Q: What type of relationship will exist between NHRA and NHRA Pro Racing? How will the two companies be structured to compliment each other?
A: The parties have established a long-term relationship which we believe facilitates the growth and expansion of drag racing at all levels as well as the optimization of the overall NHRA brand. NHRA will continue to focus on amateur and sportsman drag racing as well as National DRAGSTER, NHRA membership services and youth and educational programs. NHRA will sanction all NHRA Drag Racing events, including the NHRA POWERade Drag Racing Series events in perpetuity. In addition, NHRA will forever be involved in creating the rules that govern the sport. NHRA Pro Racing will focus on professional drag racing and the overall commercialization and expansion of the NHRA brand.
Q: How will this transaction help grow the NHRA POWERade Series?
A: NHRA Pro Racing brings with it a host of complimentary skill sets, substantial experience and key relationships to build upon the tremendous success we have currently achieved and take the NHRA POWERade Drag Racing Series to a new level while creating a totally unique sports entertainment asset with substantial near- and long-term growth potential. In addition, access to additional capital will be available to support new initiatives designed to build and grow the sport of NHRA POWERade Drag Racing.
Q: Will NHRA continue to have involvement in professional racing?
A: Yes. NHRA will sanction all NHRA POWERade Drag Racing Series events in perpetuity. In addition, NHRA will forever be involved in creating the rules that govern the sport.
Q: Does this effectively mean NHRA has been sold?
A: No. NHRA remains a non-profit corporation and will continue its original mission as a vibrant, active leader in the drag racing community, by virtue of both its ongoing role running amateur and sportsman racing and its ongoing relationship with the new company providing racing operations and sanctioning services to the NHRA POWERade Drag Racing Series. In fact, NHRA will be stronger than ever and extremely well positioned to pursue its core mission of promoting, protecting and preserving the sport of drag racing.
Q: Who owns NHRA now?
A: No one owns NHRA. It is a non-profit corporation and will continue to focus on amateur and sportsman drag racing, offer its membership program, publish its weekly publication National Dragster and continue its youth and educational programs. And because of the perpetual sanctioning relationship with NHRA Pro Racing, it ensures NHRA will continue its role as the premiere drag racing sanctioning body.
Q: Who will run NHRA? Who will run NHRA Pro Racing?
A: NHRA will be run by Peter Clifford, who will report to NHRA's Board of Directors. Tom Compton will become the new President and CEO of NHRA Pro Racing. In order to ensure a smooth transition and provide for continuity, agreements have also been reached for Peter to provide consulting services to NHRA Pro Racing, and for Tom to remain on the NHRA Board of Directors. In Peter's role as a consultant to NHRA Pro Racing, he will continue to assist Tom in managing many of the same day-to-day activities for which he is currently responsible.
Q: Who is NHRA Pro Racing? Who is HDP?
A: NHRA entered into an agreement to separate its professional series assets, including the NHRA POWERade Drag Racing Series, together with a broad set of rights to commercialize the NHRA Brand, and transfer those assets to a new company called NHRA Pro Racing, a wholly-owned subsidiary of HD Partners Acquisition Corporation, a publicly traded company.
HD Partners is a special purpose acquisition company that was formed for the specific purpose of acquiring a company in the media, entertainment or telecommunications industries. HD Partners is led by Eddy Hartenstein, who served as president and CEO of DIRECTV through its growth to become the world's leading digital television service with over 12 million customers and over $7.7 billion in annual revenue. The HD Partners team has substantial experience in managing and growing branded entertainment services.
Q: What is the make up of the management team at both companies?
A: Given the strong and deeply integrated relationship between NHRA and NHRA Pro Racing, both management teams will be working together. With that said, the management team assignments have been identified as follows:
NHRA Pro Racing: Tom Compton, President and CEO; Robert Meyers (of HD Partners), Chief Financial Officer; Gary Darcy, Senior Vice President Sales & Marketing; Glen Cromwell, Vice President National Event Marketing; Jerry Archambeault, Vice President Communications & Public Relations, Don Kraushar, Vice President-National Event Business
NHRA: Peter Clifford, Executive Director; Graham Light, Senior Vice President, Racing Operations; Adriane Ridder, Vice President Publications; Linda Louie, Vice President & General Counsel.
Q: What happens between now and when the deal closes?
A: It will be business as usual at NHRA between now and after the deal closes.
Q: When do you expect the deal to close?
A: Although the closing date cannot be predicted with certainty, we expect the deal to close prior to the end of the year.
Q: What happens after the deal closes?
A: NHRA Pro Racing will begin to operate the purchased assets and NHRA will continue to function as a non profit organization and operate the retained activities.