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Cuts in salaries, ad budget help NHRA withstand revenue drop of more than 10 percent
Published January 10, 2011, Page 4
The filing shows that the NHRA trimmed expenses by 10.2 percent to $108.3 million during the 2009 season when the recession derailed economic growth. The association cut employee compensation by 10.2 percent to $17.7 million and reduced its advertising budget by 8.3 percent to $22 million.
The expense reductions helped limit the NHRA’s losses in 2009. The organization had a net loss that year of $643,924. That compared to a net profit in 2008 of $1.9 million.
NHRA President Tom Compton said the organization’s 2009 spending cuts were made in the midst of the 2008 credit crisis. As the crisis began, he said the NHRA reduced 401(k) matches for employees, renegotiated vendor agreements, switched from Ticketmaster to ExtremeTix, cut back on travel and laid off some staff.
Executive compensation and salaries also were reduced from $2.3 million in 2008 to $2.1 million in 2009. Compton saw his total compensation decrease 9.1 percent to $701,257, and executive vice president and general manager Peter Clifford’s fell 10.4 percent to $382,983.
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NHRA President Tom Compton said 2009 spending cuts were made amid the 2008 credit crisis.
“We knew we would feel the effects [of the recession in 2009], so we wanted to stay in front of it,” Compton said. “We’re glad we were proactive.”
The NHRA generated $107.7 million in total revenue in 2009, down from $122.9 million in 2008. The biggest revenue decreases were in the area of sponsorship and ticket sales, which fell by 15.8 percent and 9.7 percent, respectively.
In 2009, sponsorship and advertising revenue totaled $41.1 million and ticket revenue totaled $43.9 million. Those decreases were driven by the loss of several key partners that year, including Budweiser and General Motors, and cuts in general admission ticket prices that were designed to offer fans relief.
Compton said the NHRA bounced back in 2010 and is optimistic about 2011. The association has restored employee and management salaries and increased its 401(k) match by 1 percent. Advance ticket sales are improving and sponsorship conversations have increased.
“We feel really good now about how we weathered the storm for two reasons,” Compton said. “The interest level is strong and there are a lot more companies we’re talking to today, and we had quite a few races see attendance increases. All of that’s encouraging.”