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NHRA being Investigated by the IRS
- Thread starter SundayNiagara
- Start date
mick
Nitro Member
bruce, you may be wrong with specifics / how you worded your comment;
but i believe your general meaning has merit.
i believe powerade stated gatorade would have no part in the nhra.
for a short period the nhra enjoyed participation from rockstar, vis viva,
monster energy, then grandfathered in these 3 sponsors as full throttle
took over as series sponsor; stipulating that if they pulled from the series,
they could not come back as long as full throttle held series sponsorship.
red bull vs. monster vs. rockstar + huge numbers of
lesser brands sponsoring everything 'extreme', the nhra is left with
'full throttle', a series sponsorship IMO so inexpensive, why would coca-cola
even want to sponsor a team/s, not to mention recent sales either flat or declining, yet coca cola has wide distributing network with hansen natural
(monster energy), so in essence coke has approx. 10% of US market with
full throttle (4th or 5th best selling?) and also profits from distributing monster
with approx. 30% of US market; not a bad deal IMO; yet monster and others
apparently still 'out' of the nhra
watch out, soon it will be called 'The Relentless NHRA Series'
back to the topic - for what it's worth.........
two new NHRA board members recently, one an
experienced attorney specializing in corporate finance
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Bruce Edwards, you’ve made some good points. But at the same time, things change over time. Remember, there was a day when fuel cars first ran points meets voluntarily, and then were pretty much “forced” to in order to gain national event entries.
I remember a press conference years ago in conjunction with one of the first Gatornationals, which was followed by a Q&A with some NHRA brass. I’m pretty sure Wally was part of it. Anyway, this was back in the mid-70s, and a good friend of the sport, a guy who shot astonishing movies of the early days, the late Woody Hatton, decried the fact that there wasn’t much room left for any “little guys” in Funny Car. I don’t remember who provided the response from NHRA, but it was sincere, heartfelt and honest. He merely talked about the changing times, the increasing costs of racing at all levels, and the very real prospect that in the very near future all of our Top Fuel and Funny Car teams would be totally full-time and professional. He was pretty much right-on. Woddy was disappointed, but I also remember he accepted the response as indicative of what was to come.
Regarding Cory, J.R. Todd, Tommy Johnson, Jr., Hilary Will and so many other highly talented and motivated people that are on the sidelines, we have to face the fact that with increasing costs there are naturally going to be far more qualified drivers then there are cars for them to drive.
When some of the sport’s wealthiest team owners have decided, for whatever reason, to stop spending their money on racing that means only those capable of marketing themselves proficiently are going to make it. It also means that, should they sign, say, a sponsor for $1.5 million, they’re not going to have enough money to fund their own team, so they’re going to have to “invest” that money with an existing team. Suppose they can buy a ride in a now-parked car for $1 million, pocketing the other half million as a salary. How much effort are they going to get from that team owner for $1 million, when we all know it costs somewhere between $3M and $4M to be a championship contender?
Chris Cook, the letter wasn’t anonymous, and it wasn’t a letter in the first place. It was a press release generated by the law firm stating that the letter had been sent to the IRS. It was all about generating publicity for themselves and, potentially, their “case” with the IRS.
Regarding the rulebook issue, it’s hard to fault NHRA for this decision. There are now over 70,000 “members” of NHRA, but only a percentage of them are active competitors. Let’s just say there are 25,000 racers. Why should NHRA waste the money in printing 50,000 books that will never be opened?
Just as an FYI, the Calgary Stampede, one of the largest rodeos in North America, adopted this scenario two years ago, offering their multi-page media guide online and only printing a very small number. It saved them a bunch of money.
Joe Sherwood, I can’t provide specific dollar expenditures, but consider things like:
Developing, testing and “approving” a tire for use.
Manning the national events with crew, transporters, equipment and product.
Paying for their own probably outrageously expensive liability insurance policies.
Producing and shipping the tires from the plant to the track (and some of those tires are made in South America).
I don’t question Virgil Hartman’s individual situation regarding tires, but do not believe it’s an across-the-boards situation.
Bruce, throughout the recent history of motorsports series sponsors have demanded, as part of their deal, an exclusivity of sorts. That’s why Winston demanded and received exclusives in terms of cigarette sponsorships in NASCAR and NHRA. When it became POWERade NHRA agreed that no other sports drink (Gatorade) could become a major sponsor. The shift to Full Throttle opened up the sports drink category to anyone who feels like playing, but closed off the energy drink market segment (such as 5-Hour Energy, Red Bull, etc.). However, since there were energy drinks already participating, they were grandfathered in, but with restrictions. Those energy drinks could only remain active with the teams they were already signed with. So, in order for Monster to remain they had to stick with Kenny Bernstein, which was a bad deal for Monster. Suppose they wanted to sign with Schumacher? Could not do it. Notice that all of those energy drinks are gone, and in retrospect it appears that most of these deals were more flash than substance.
Could Pepsi sponsor cars? Absolutely. Go sell ‘em on our sport.
Jon Asher
Senior Editor
Competition Plus.com
I remember a press conference years ago in conjunction with one of the first Gatornationals, which was followed by a Q&A with some NHRA brass. I’m pretty sure Wally was part of it. Anyway, this was back in the mid-70s, and a good friend of the sport, a guy who shot astonishing movies of the early days, the late Woody Hatton, decried the fact that there wasn’t much room left for any “little guys” in Funny Car. I don’t remember who provided the response from NHRA, but it was sincere, heartfelt and honest. He merely talked about the changing times, the increasing costs of racing at all levels, and the very real prospect that in the very near future all of our Top Fuel and Funny Car teams would be totally full-time and professional. He was pretty much right-on. Woddy was disappointed, but I also remember he accepted the response as indicative of what was to come.
Regarding Cory, J.R. Todd, Tommy Johnson, Jr., Hilary Will and so many other highly talented and motivated people that are on the sidelines, we have to face the fact that with increasing costs there are naturally going to be far more qualified drivers then there are cars for them to drive.
When some of the sport’s wealthiest team owners have decided, for whatever reason, to stop spending their money on racing that means only those capable of marketing themselves proficiently are going to make it. It also means that, should they sign, say, a sponsor for $1.5 million, they’re not going to have enough money to fund their own team, so they’re going to have to “invest” that money with an existing team. Suppose they can buy a ride in a now-parked car for $1 million, pocketing the other half million as a salary. How much effort are they going to get from that team owner for $1 million, when we all know it costs somewhere between $3M and $4M to be a championship contender?
Chris Cook, the letter wasn’t anonymous, and it wasn’t a letter in the first place. It was a press release generated by the law firm stating that the letter had been sent to the IRS. It was all about generating publicity for themselves and, potentially, their “case” with the IRS.
Regarding the rulebook issue, it’s hard to fault NHRA for this decision. There are now over 70,000 “members” of NHRA, but only a percentage of them are active competitors. Let’s just say there are 25,000 racers. Why should NHRA waste the money in printing 50,000 books that will never be opened?
Just as an FYI, the Calgary Stampede, one of the largest rodeos in North America, adopted this scenario two years ago, offering their multi-page media guide online and only printing a very small number. It saved them a bunch of money.
Joe Sherwood, I can’t provide specific dollar expenditures, but consider things like:
Developing, testing and “approving” a tire for use.
Manning the national events with crew, transporters, equipment and product.
Paying for their own probably outrageously expensive liability insurance policies.
Producing and shipping the tires from the plant to the track (and some of those tires are made in South America).
I don’t question Virgil Hartman’s individual situation regarding tires, but do not believe it’s an across-the-boards situation.
Bruce, throughout the recent history of motorsports series sponsors have demanded, as part of their deal, an exclusivity of sorts. That’s why Winston demanded and received exclusives in terms of cigarette sponsorships in NASCAR and NHRA. When it became POWERade NHRA agreed that no other sports drink (Gatorade) could become a major sponsor. The shift to Full Throttle opened up the sports drink category to anyone who feels like playing, but closed off the energy drink market segment (such as 5-Hour Energy, Red Bull, etc.). However, since there were energy drinks already participating, they were grandfathered in, but with restrictions. Those energy drinks could only remain active with the teams they were already signed with. So, in order for Monster to remain they had to stick with Kenny Bernstein, which was a bad deal for Monster. Suppose they wanted to sign with Schumacher? Could not do it. Notice that all of those energy drinks are gone, and in retrospect it appears that most of these deals were more flash than substance.
Could Pepsi sponsor cars? Absolutely. Go sell ‘em on our sport.
Jon Asher
Senior Editor
Competition Plus.com
mick
Nitro Member
are you kidding me!?, rockstar and monster are the #2 & #3 selling energy
drinks worldwide........it is a fact the nhra wants to sell to a young demographic
same as the still growing energy drink segment.
Coca cola may be helping themselves by locking out other energy players
from the NHRA - i agree, it's their money spent to sponsor the series, but
if you look at it from NHRA's perspective, they do not have major sponsors
lining up at their door; here is the energy drink sector, still growing, selling
to youth, and here you (NHRA) are with the 5th place seller (full throttle)
locking out potential sponsors that are directly in line with your demographics.
if the NHRA feels that coca-cola has helped them to grow with their
'full throttle' brand sponsor, than so be it, but if the NHRA is flat or in decline,
which is reported 'full throttle' was as recent as 1Q 2009, then what's
the object of the exercise?
mick
Nitro Member
that would surprise me, but you may be right.
but if pepsi were to get involved, it would be with Amp; again it's a new market
segment they can increase sales and develop longterm buyers.
woops, energy drink, nhra door locked.
vegasnitro
Nitro Member
Not that long ago Del Worsham ran a Mountain Dew bodied Funny Car at a few events (and he blew it sky high at Joliet if memory serves). Mountain Dew is owned by PepsiCo.
Paul
Nitro Member
Jon, I appreciate your insights, but for me this one is pretty black and white.
There are two measures for any action, legal and moral. Even if the NHRA was on reasonable legal grounds in removing members voting rights, the way they did it definitely throws the "shady" flag for me.
I don't feel the letter they sent out to members made it all clear what their real intentions were, it more so seemed to hide them, so this doesn't pass the moral test for me.
Tricking people to take something of value away from them is "shady" even if its marginally legal.
The use of deception in the vote also runs the risk that the deception brings the legality of the vote into question.
SundayNiagara
Nitro Member
I remember when the Worsham's had "Pepsi" on their trailers. I asked Chuck about that & he said NHRA wanted him to remove the signs and he refused, saying the signs were there pre-Powerade and NHRA backed off.
mick
Nitro Member
you're rite - i remember that.....destroying it too.
wonder what their involvment was? (would have been during CSK days)
Mike Larson, nothing you say is wrong. I stand behind my statement that some of the energy drink deals we saw out there were more splash than substance. I never said anything about the strength or weakness of those brands in the energy drink marketplace. I just don’t think the racers carrying their colors ever saw much of the money. Not al of them, but some of them for sure.
But, even if Full Throttle is in the toilet, they nevertheless engineered a contract with the NHRA that forbids sponsorship from competing brands. I know of at least one very famous racer who had a deal cooking with an energy drink company that would have been good for NHRA Drag Racing in any number of ways, certainly including the fact that the racer in question would have generated significant exposure. That didn’t matter to NHRA. When the racer informed them of the potential sponsor the racer was told it was unacceptable. End of potential sponsor, end of the racer’s dream.
Sorry Mike, but Amp would not be acceptable to the NHRA under the current agreement. Anything else from Pepsico – absolutely, but not the energy drink.
And to expand on Chris Cook’s point, it was commonplace for Pepsi trucks to deliver product to the Worsham pits early in a national event. I think someone from Coke complained about seeing the truck in the pits, and the Worsham’s were told that the Pepsi trucks could only make deliveries on Thursdays after that.
The Worshams didn’t have the relationship with Pepsi. It was CSK who had the relationship. Worsham was just the spear carrier.
Paul Tichener, you appear to be anything but naïve. Do you think NHRA or any other corporate entity gives a damn about morals, ethics or anything but their own power and their own financial bottom line? They do not, and NHRA is no different from GE, GM or A-B in that respect.
I said when I posted the story that I didn’t remember every single detail, and also acknowledged that NHRA may have used language designed to “scare” the members into providing their proxy votes. I can’t be positive that that’s what took place, but I think it’s highly likely that it went down that way.
Jon Asher
But, even if Full Throttle is in the toilet, they nevertheless engineered a contract with the NHRA that forbids sponsorship from competing brands. I know of at least one very famous racer who had a deal cooking with an energy drink company that would have been good for NHRA Drag Racing in any number of ways, certainly including the fact that the racer in question would have generated significant exposure. That didn’t matter to NHRA. When the racer informed them of the potential sponsor the racer was told it was unacceptable. End of potential sponsor, end of the racer’s dream.
Sorry Mike, but Amp would not be acceptable to the NHRA under the current agreement. Anything else from Pepsico – absolutely, but not the energy drink.
And to expand on Chris Cook’s point, it was commonplace for Pepsi trucks to deliver product to the Worsham pits early in a national event. I think someone from Coke complained about seeing the truck in the pits, and the Worsham’s were told that the Pepsi trucks could only make deliveries on Thursdays after that.
The Worshams didn’t have the relationship with Pepsi. It was CSK who had the relationship. Worsham was just the spear carrier.
Paul Tichener, you appear to be anything but naïve. Do you think NHRA or any other corporate entity gives a damn about morals, ethics or anything but their own power and their own financial bottom line? They do not, and NHRA is no different from GE, GM or A-B in that respect.
I said when I posted the story that I didn’t remember every single detail, and also acknowledged that NHRA may have used language designed to “scare” the members into providing their proxy votes. I can’t be positive that that’s what took place, but I think it’s highly likely that it went down that way.
Jon Asher
mick
Nitro Member
it seems as if the potential sum of money spent annually by lost energy drink
and related sponsors may be greater than the annual outlay of money
coca-cola spends for the series title rites; the deciding factor to stay with
coca-cola is most likely their multi-year agreement with nhra (don't know the #)
which is guaranteed money TO the NHRA, NOT TO a team owner.
mentioned in my earlier post that Amp would be prohibited
Jon you made point the leadership is arrogant, they know more and if is not their idea it don't fly. Maybe do need start over and revive the old American Hot Rod Association. So if Dale Earnharht Jr want to bring an Amp Energy PS Car to NHRA no deal. The most popular driver on the planet. I guest Kirk Busch but not use any Shell Racing Gas in that PS car. It is silly an really dumb to put all eggs in one basket. Leadership, NASCAR has it, anybody who wants to buy space on car is invited pay the bucks, why haven't we gone after the National Guard, the possiblities are monstrous. But in the vain of this thread we seee that leadership of NHRA has favored a few and damn the rest. GE, LG, Panasonic, and any other big conglomerate does not piss off their customer base. The deal now is excellence customer service. Go to restuareant an get poor customer service bet you don't leave a tip and if do you won't be back.
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vegasnitro
Nitro Member
NASCAR absolutely has exclusive deals. Why don't you call up RCR and ask them how they felt about Sprint putting the kabosh on ther AT+T sponsorship? Or call up Penske and ask him how he felt about having to take Verizon to the Nationwide series and the IRL instead of Cup? Or call up Hoosier Racing Tires and ask them how they feel about supplying many of the short tracker's tires around the country, but being locked out of the big show. You want to use any fuel besides Sunoco? Good luck with that.
One could also argue that NASCAR has had no leadership since Brian France took over (I would argue it started a bit before that, when Big E went into the wall at turn 4 in Daytona). The COT has been an abject failure (except for the safety features). The Chase has also been an abject failure for luring new fans and is actually screwing teams out of sponsorship dollars (most of the big teams sponsorship agreements are tiered or contingent upon making the chase to realize the full value of the deal). The move to "non-traditional" stock car markets and their cookie cutter tracks has grown old quick, and attendance is sliding backwards quicker than NASCAR knows what to do. With the exception of Daytona, Talladega and Bristol, TV ratings are lower than have been since they started their network deal. Don't get me started on their new points system.
Undoubtedly, NASCAR is the biggest and richest racing series in the USA, but that grass isn't necessarily greener, and they face the same problems every other racing series does and create their own problems the same way every other racing series does.
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I believe I have been on the right track on some issues and wrong others but I have found here are brilliant men willing to explore the possibilities. Why can't this dialog happen within the NHRA. There are solutions to what ails NHRA when you have people who are committed the organization willing to explore all possibilities to keep drag racing vibrant,relevant, and most all expanding to new horizons. I give much respect to the opinions offered in this forum because it comes from people dearly love drag racing.
clwill
Nitro Member
I think that's the operative point in all of this. If the board of the NHRA was filled with people who demonstrably love the sport, who want to work toward the long term future yet still respect the history of the sport, and who are frequent and good listeners to all the constituencies (the people who participate in the sport, the sponsors, the fans, the marketing people, etc.), I don't think we'd be having this conversation. And I doubt whoever was ticked off enough to sic the IRS on them would have been motivated to do so.
none
Nitro Member
IMO, this would be the "nail on the head moment"
Not just the NHRA, but corporate America in general.
"There's something wrong with the world today......." -Aerosmith
IMO, this would be the "nail on the head moment"
Not just the NHRA, but corporate America in general.
"There's something wrong with the world today......." -Aerosmith
Mel I really think as members/consumers we have the power to change the culture of companies/organizations treating us like red headed step children. I'm quite sure the racers would to race their cars have some fun, but if just one race out of the year you don't show up, it might bring about a better enviroment
