Tom Compton Interview on DRO

[Bobby Fazio]

My question is how did the organization get $22 million in debt? I wish they could have gone further into that. All the sponsors, memberships, competition numbers, entry fees, official this/that of the nhra, event billing, series billing (Winston at the time?), etc. seems like the sanctioning body would have been bringing in much more than they were spending. What overhead costs did NHRA have that was not being covered by the aforementioned revenue intake? Not being sarcastic, just curious.

[Mike Pearson]

The debt was most likely from the purchase of real estate ( race tracks owned by NHRA) and the updates, operating costs and repairs to those facilities.
Just because there is debt does not mean there was a problem. I wonder if the debt has been reduced under the new regime or has it increased. Last time I was at Gainesville there was a huge Remodel happening to the grandstands. I know that is not an out of pocket expense. I doubt if any of the actual racing related expenses created the debt.

[Gary Smith]

Originally Posted by Mike Pearson

The debt was most likely from the purchase of real estate ( race tracks owned by NHRA) and the updates, operating costs and repairs to those facilities.
Just because there is debt does not mean there was a problem. I wonder if the debt has been reduced under the new regime or has it increased. Last time I was at Gainesville there was a huge Remodel happening to the grandstands. I know that is not an out of pocket expense. I doubt if any of the actual racing related expenses created the debt.

I was always under the belief true debt is when capital expenditures are way beyond net profit (like 10x) before bottom line loss. And being a 501C org, I was under the impression all "profit" is classified as "surplus" which needs to go back into the organization anyway.

Fuzzy math?