By Susan Wade
NSSN Correspondent
TOPEKA, Kan. — Eddy Hartenstein was studying toward bachelor degrees in aerospace engineering and mathematics at Cal Poly Pomona in the late 1960s and early 1970s. But he knew how to unwind, too. And he did that, by his recollection, “peeking over and under a chain-link fence” at the action on the drag strip down the street from his university.
The iconic Pomona Raceway today bears the Auto Club corporate label. Times have changed. Drag racing has become big business, and Hartenstein plans to make it bigger business.
Using terms such as charismatic, sponsor friendly, multimedia branded entertainment and rising-tide phenomenon, he and his colleagues at HD Partners Acquisition Corporation announced last Wednesday their intention to “acquire all of NHRA’s professional racing assets, including the NHRA POWERade Drag Racing Series, together with a broad set of rights to commercialize the NHRA brand.”
Once the $121-million transaction, which could take months to finalize — is complete, those assets (which include property and broadcasting, licensing and media rights) will belong to a wholly owned subsidiary of HD Partners named NHRA Pro Racing.
The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.
Wally Parks, founder of the NHRA, said the announcement “represents a monumental milestone in the 56-year history of the NHRA. By virtue of the agreements we have reached with HD Partners, we are positioning the NHRA POWERade Series for great future growth and success, while at the same time are assuring the long- term vitality of the NHRA.”
When the deal closes, Hartenstein, who’s Chairman and Chief Executive Officer of HD Partners, will serve as Chairman of NHRA Pro Racing. Current NHRA President Tom Compton will assume the role of President and CEO and be a member of the board. Robert Meyers, HD Partners’s current chief financial officer, will become the CFO of NHRA Pro Racing. Peter Clifford, currently executive vice-president and general manager of the NHRA, will become executive director of the NHRA, as well as a consultant to NHRA Pro Racing.
Dallas Gardner, Chairman of the Board of NHRA, said, “This transaction provides the best opportunity for NHRA to fulfill its core mandate to protect, preserve and promote the sport of drag racing. It provides long-term financial stability to the NHRA, an unhindered opportunity for the NHRA POWERade Drag Racing Series to flourish and grow and an important strategic and long-term relationship between the NHRA and NHRA Pro Racing.”
What the agreement means in practical terms remains to be seen. However, John Force, whose opinion carries the most powerful leverage in the sport, said he is willing to believe that only positive results can come from a fresh set of investors who want to put drag racing on a loftier plane.
Although Force claimed, “I don’t know a lot about what’s taken place,” with details of negotiations, he indicated that his intuition tells him that this is a chance worth taking — or one about which he can at least be  open-minded.
“He grew up in the Valley, in Los Angeles,” Force said of Hartenstein, “and he knew every racer [back during his teenage years], because I quizzed him. It wasn’t just the Prudhommes and the Garlitses. So, he’s got a passion for this, and that could be positive.
 “Years ago, Tom Compton showed me a business plan. And with the ups and downs over the years, he stood by his plan,” Force said. “This always was to get more money, to get the NHRA out of debt. I believe that’s the road he’s headed down, so I’m sticking by him for now.
“I believe that NHRA is at a point where only money could create growth,” the 14-time Funny Car champion said. “If we’re going to catch up to NASCAR — that’s a dream I have — maybe it’s a long shot, but we can still make some moves.”
Force’s bottom-line call is this: “I believe it’s good. I believe NHRA came to a point that it needed to grow, and only financial [help] could make it grow. I think Tom Compton and his group made the right decision. The proof’s in the puddin.’ Only time will tell. I believe it will, and I hope and pray it will. We’ve all worked hard. My children are coming up through the ranks, and I want ’em to be part of something big.”
Compton said that’s the idea for the agreement. “While we have made tremendous strides over the last eight years growing the professional side of the sport, [the] announcement is the next logical step in the evolution of the sport of drag racing,” he said. “This new relationship brings with it access to investment capital, additional expertise, relationships and complementary skill sets to assist the current management team, to drive key initiatives to accelerate the growth of the NHRA POWERade Drag Racing Series.”
Terms call for HD Partners to acquire: “the NHRA POWERade Drag Racing Series and all professional NHRA drag-racing assets and opportunities, including NHRA’s existing television broadcast agreement with ESPN; an exclusive, worldwide, perpetual license to the NHRA brand, “Official NHRA” sponsorship and licensing rights; exclusive “media exploitation rights” in broadcast television, home entertainment and new media; and a video and photo archive chronicling the history of drag racing.
Fueling much speculation is the inclusion of four NHRA-owned race tracks, an additional long-term track lease at Pomona, Calif., and the NHRA headquarters building at nearby Glendora.
Meyers, who founded HD Partners Acquisitions along with Hartenstein, Larry Chapman, Steve Cox and Bruce Lederman, said, “This is an asset purchase.”
The NHRA will receive approximately $121 million in total consideration, consisting of approximately $100 million in cash, approximately $9.5 million in HD Partners common stock and the assumption by HD Partners of approximately $11.5 million in debt and liabilities.
Hartenstein and his group did that in building DirecTV to a business with more than 12 million subscribers and more than $7.7B in annual revenue. They formed HD Partners Acquisitions for the specific purpose of consummating a business combination in the media, entertainment and/or telecommunications industries; the company raised $150 million in its initial public offering. But Hartenstein says he likes drag racing.
“We’re not just a bunch of financial hacks who just see a great opportunity. I was born and raised in Southern California, and let’s just say I like things that go fast.”