more news from NHRA
 

A Message from NHRA President Glen Cromwell:
2020 is a year we will never forget. As the country and the world paused in the face of COVID-19, NHRA, like other sports sanctioning bodies, canceled and postponed events. We had to do our part to protect public health and our decisions were based on evolving governmental and public health guidance. We worked with our entire racing community, government authorities and experts to return to racing in a prudent way. Now, we are one of the few sports anywhere that’s successfully returned to operating with spectators, with protocols in place to support those operations.



Like many organizations, the pandemic impacted our finances. For example, without fans in the stands, we were forced to reduce purses. The good news is that our overall financial health remains strong and we are excited to gear up for our 70th anniversary in 2021. We are taking a bit more time to announce the 2021 national event schedule so we can have fuller information and more certainty. The schedule might look different than before – it might start later and it might start on the east coast – but it will be packed with what everyone expects from NHRA racing.



I’m truly proud to say that the NHRA is the largest and greatest auto racing organization in the world, and we have all of you to thank for that, as well as everyone else with a passion for NHRA racing. When the pandemic struck, our entire racing family focused on everyone’s health and safety. On the pro series side, we continued to work closely with our series sponsor, Coca-Cola, and their Mello Yello brand. Even though they decided to withhold a payment from us during the pandemic, they worked with us and all systems were go for their sponsorship to continue, as contracted, through the end of 2023.



Recently, Coca-Cola had a change of heart, and told us they would walk away from their agreement to sponsor our professional series -- not at the end of 2023, as promised in their agreement, but now, after being with us since 2002. We’re deeply disappointed that they’ve taken this position.



NHRA has always treated our sponsors as part of our family. Family sticks together when times get tough. But it seems The Coca-Cola Company is using the pandemic as an opportunity to break their promise. We can’t let that stand. We owe it to everyone who makes the NHRA so excellent – all our employees, teams, tracks, fans, partners and sponsors – to hold Coca-Cola to its promises.



Today, in the United States District Court for the Central District of California, we filed a lawsuit against The Coca-Cola Company. We have never filed a lawsuit like this in our history, and we never expected to be forced to take action against such a longstanding partner. We value relationships with our sponsors. We do not take this action lightly. But we are unwavering in our belief that we have no other option to protect our rights and the interests of our racing community, especially the racers whose purse was funded in large part by this agreement.



Thank you for all you have done these past few months. We will continue to work with the greatest sponsors in the world, and together, we will cross many more finish lines, stronger than we have ever been before.

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Well seeing how they treated the Pro teams it appears the table has been turned on them. This is certainly not goid news in today's economic times it will be difficult to find another title sponsor....

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Not surprising at all. Any sponsor is expecting to get some sort of "return" for an investment. The "return" in the case for Mello Yello has completely changed since their negotiations started. First, their are not the thousands of fans at the races to enjoy a cold Mello Yello, enjoy the mock up race car and test your starting line reflexes, be surrounded by Mello Yello advertising, and see their favorite driver drink a Mello Yello.

Remember, Mello Yello has been title sponsor for "Pro" cars and not us sportsman racers. Like him or not, John Force chose not to race this season. He is THE draw to get fans, period. I believe he is probably not getting his sponsor's support for the same reason as NHRA.

It will be impossible to get another similar title sponsor. NHRA has nothing to offer a consumer goods company....no fans, no John Force, and huge financial payouts.

Their best opportunity for sponsorship of Pro racing is something like a .com company that advertises simply for awareness.

I believe that the best opportunity for successful survival of NHRA is a sort of hybrid race. Other than US Nationals and Winternationals, which could have a full field of fuel cars, all other National events would be a "match" race type of deal. "John Force vs Schumacher" in best 2 out of 3.....Same deal with Top Fuel.

The fans would still get their "taste" for fuel cars, while payoffs and insurance costs should be greatly reduced.

Then, continue to develop the factory cars, move existing older stockers and superstockers into "Nostalgia" with ALL of the same existing rules. Cars 2008 and newer would run existing Stock and Superstock classes. Oh, and bring back Modified Production with restrictions.

Swing away folks. If you wonder how I know about advertising/sponsorship value......I retired from Coca-Cola after nearly 40 years in Management and Marketing.

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I can't see how NHRA wins this, not to mention the harm they are doing in attracting future sponsors.

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Maybe there will be more Sportsnationals next year or no quotas for sportsman classes if they have any nationals next year

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The part that states with no fans ( and the Stock & Super Stock Racers they ran off ) along with all their employees ,indicates a need to cut cost ,but in the next statement they are financially Strong ! When your one of your biggest sponsors backs out what else could you say but we are financially strong to keep the other sponsors from backing out also ! The old saying is when the tide goes out you can see who is swimming naked !

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Effective immediately, I presume? So what will this do to last week's 'good' news of signing FoxSports to multi-year deal to broadcast. Again, at cost, I presume. Another 2020 Kick in the Teeth! Ouch!

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The only thing they have touched Is their pay, which looks to in the GM range.

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NHRA states Coke as a family member , then file a lawsuit. You nhra changed what Coke was to receive for their money. Covid changed your schedule. Coke should not be held responsible for fulfilling their obligation. You did not fulfill yours. You reduced purses, how about your salary and others up top in ivory tower. We are family and everyone should suffer together.

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Wonder who has the best lawyers?

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Probably the people with the most money to spend.

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Financially strong means...the hierarchy are able to retain their salaries.

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I find this to be a very poorly thought out move by the NHRA. I really hope that the organization survives.

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The STRONG rumor was that NHRA needed a minimum of 12 races this year to fulfill their requirements to Coke/Mello Yellow. When they released the latest revision with only 11 races I wondered aloud what was going to happen if this is indeed the case........

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Very well said Jeff (and fellow Phoenician). I actually negotiated a contract for Coca-Cola when Wild Horse Pass was Firebird...a long, long time ago. These type of contracts have assurances built into them, and what is referred to "act of God" clauses. As an example, if you contracted with an amusement park, and it got leveled by an earthquake, you would be excused from the contract. Very likely you would have an attendance guarantee or compensation could be reduced. In the case with NHRA, I doubt they had insurance to cover an act of God, since tracks are spread out all over.

When TV agreements get involved with a contract, the network very likely requires a minimum advertising investment. An example would be.......NBC will pay you a million dollars if you guarantee NBC 2 million in ad revenue (or pick a number). This recent deal with FOX agreement seems a little suspicious to me.

Hope it all works out.

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yep, just like family....

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Like the optimism of Mark Lewis’s post but Greg Hill’s thought about who has the largest fleet of lawyers seems more the immediate issue. No way Coke’s counsel would not have bought off on their action if they didn’t have firm footing. They will easily absorb the legal costs of the litigation. If you really want to be a debbie downer this could all be part of an exit strategy and the top folks walk off with their golden parachutes intact. The PRO owners are aging out and is there any kind of kind of assurance that next year will be much better in terms of events and fan attendance? Maybe Mark’s and Gary’s posts are our best possible outcomes with Sportsman racers having larger fields to pay all the purses and match races providing a fan draw of sorts. In any case, change is coming. The statement about “family” made me think of Lewis Bloom, family doesn’t seem to have mattered much in his exit and that plus all the current purse structure may tell you all you need to know about NHRA’s thoughts on “family”.

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All of this begs the question: what about the rest of this season? With no sponsor money to pay the pros, what is NHRA's incentive to continue this year? Is the next announcement going to be a cancellation of all remaining national events?

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How many National events are left ?

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5

Gville, St Louis, Dallas, Houston, Vegas.

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As of today, my guess is very few :(

This is a sad situation for sure

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http://www.e3xtreme.net/2020-news/20...apers-attached

Court documents are attached to the article.

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So will NHRA survive? Anybody have a idea of what mello yellow money covered? I hope they have enough revenue from memberships, licensing, chassis certs and divisionals to continue sportsman racing. If not, class racing is dead. Sad

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Now all you wally hunters, ya should have attended the ClassRacer Natl's last week, and for the rest of ya's that didn't attend, heard Trump might help out, Maybe be he will pay loser money, for the other supporters

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My understanding is the Coke $$ paid for the Pros and apparently the Heavy Top End Salaries -- as They don't pay entry fees and collect the purses -All Sportsman Paid the entry fees. Sad to read all this for sure !!

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I'm surprised Mr. Cromwell would even write this. Is he hoping for another Sponsor to read this and step up to replace Coke as you sue them. Your Major Sponsor since 2002. Are you looking for sympathy from your members. The majority being Sportsman Racers. The ones you didn't seem to really have time or money for anymore except for a few National Events. You put the majority of your eggs in a few Sponsors baskets while you chased off so many smaller ones threw the years. Making it so expensive they didn't stay. Most of which paid contingencies to the Sportsman racers. For the last several years it seemed like every few months you added another Executive Position while I for one had hoped we would see one that actually was hired to promote Sportsman Racers. Yes I realize that most of the crowds come to see the Pros but what have you really done to promote Sportsman Racing. You have the greatest traveling car show on earth and you have done nothing to promote this. You seem to have forgotten some simple business rules. Don't put all your eggs in one basket. Don't chase off paying customers. Don't forget the road you traveled to get where you are. You may need to travel down that same road again some day. You put yourself into this position and yes I understand about Covid-19. I own a Restaurant. It's been my most profitable year to date. I have always understood I'm in the customer service business and this year I'm getting paid dividends for all the years I treated all my customer like they were the most important one. Barry

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Coca Cola paid $5.7M per year. Roughly 6% of the NHRA’s annual revenue. I found that to be surprisingly low.

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While 5m is alot suing for 6% of your gross sounds like it's not worth it. Surprised someone has not stated Trumps fault. ( insert sarcasm)

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I saw the same figure as you.....30 million for a 6 year deal. Plus, $2 million a year for enhancements (I hate the word. Lol). Like the Mello Yello experience, shooting t shirts out of the cannon. Semi and personal. So, roughly 36 million for a 6 year deal. Draw your own conclusion as to whether that is a lot of money or not.
My "gut" feeling is that they can work it out, and will. It has been too good of partnership for so long. If you read the law suit, you will notice that Coke made a pretty good offer before walking away. IMO, NHRA has to cut Pro expenses to survive. I read a comment by a fuel racer...."it costs $200,000 for me to race one race. If I win, I only get $50,000"...he is in the wrong business.. I haven't figured the payout plus the end of year payouts for fuel cars, would be easy enough to do.......for sure, the expense has surpassed the value for fuel cars, and if you are drag racing to get rich......try something else. Hope it works out.

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I hope that NHRA survives this. It seems the leadership is out of touch with their sponsors just like their racers. I find it a little disingenuous to call the sponsor family then sue them. I wonder if they considered pro stock truck racers family.

I do think that there is enough demand among class racers, that class racing can and will live on. The reality is that NHRA has forced class racers to realize that they don’t need NHRA to race on. (Even though I would prefer that). Look at the many associations that are thriving out there. There is a market for class racing if they choose to go after it.

I think NHRA as a whole is great and there are great people there. The leadership at the top don’t impress me though. Their focus has not been on the type of racing that interests me the most.

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Tick, Tick, Tick .................

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I am surprised that Coke bailed on such a small sponsorship. That would be chump change for a corporation like Coke. Must have been more issues than just the issues due to the Covid 19 virus and a few events cancelled. I wonder how much Coke lost when the Olympics was cancelled earlier this year.
5 million dollars per year is nothing for Coke. NHRA is the top drag racing sanctioning body. Once the economy gets back to normal they should be able to attract other sponsors to pick up the slack that Coke left behind. Might take several to make up that difference. In the mean time all of us will suffer because of the sponsor loss. It takes a lot of capital to keep the NHRA on the road all year. Hauling their equipment from one end of the country to the other is a big expense.

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Instead of watching to see if they fail or not. Maybe it would be a good time for the sportsman racers to come together and get something done. Probably a good time to get there attention. As much as you guys have invested in your sport I would think it would be hard to just watch the ship sink.jmo

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Like trying to herd cats!

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Has been proved lately that can be done.

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I read the law suit. It says that Coke told NHRA in 2019 they wanted to bail early. NHRA told them this year they could pro rate the payment, but they missed the complete May payment of half the 5.2 mil.

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Not sure there is anything sportsman racers can do...I think this year is going to affect NHRA hard when it comes to next season. The sportsman racers at the national level have been nothing but slot fillers for years. They do nothing for us except increase the entry fees.

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I understand the slot filler deal. But when a company has gravy money to play with they might not have been hearing you guys as clear. And if nhra fails at a national level they fail at the lower level. If there insurance drops them can you imagine getting a new policy in today's time? Not sure but I bet alot of small tracks piggy back off of there policy.

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With all the interest in attending national events and the grade point issue, maybe now would be the time for our division reps to push for larger quotas and a change in the grade point structure.

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In my opinion NHRA knew they were filing the lawsuit when the Pro purses were cut.