What We Know About the Offer to
Purchase New England Dragway

REVISED – see revisions in red

It all started with a post on Facebook by Don Roberts on Sunday, November 21 at just before 9:00 p.m. In that post, Don announced that “New England Dragway received an offer from an entity with the offer to purchase the entire facility.”

I had been working on a Top Ten Stories article for Northeast Drag News (nedragnews.com), but that post by Don Roberts quickly put the brakes on that project.

It took a little while for that post to get some traction, but by Monday morning it had started to sink in. Don’s original post was shared and discussed, and by Monday morning Karri Khoury had created a “Save New England Dragway” petition on Change.org, with the stated purpose of showing “the track how much we love them and want to keep them around.” Within 24 hours, more than 20,000 people had signed it, and as I sit here writing this, we are headed to hit the 30,000 signature mark before the end of the second day.

Over the past two days, I have been doing some mental exercises, trying to make some sense of the situation. I am not a stockholder in New England Dragway, Inc. so I am not privy to any details about the offer. To be honest, I consider this is a private business matter for the shareholders and I respect that they each have their own motivations and each has to make their own decision about this offer. How and why they do that is honestly none of my business.

But I do know some things, and I can make some logical deductions about other things.

 

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WHAT WE DO KNOW AND WHAT WE CAN ASSUME TO BE TRUE

New England Dragway sits on an oddly phallic-shaped piece of land of approximately 283 acres in Rockingham County, NH. In 2019, USA Today reported that the value of one acre of land in New Hampshire was $19,840. That would put the starting price for the site at $5.6 million. I would suspect that any serious offer, given the location of the land, would have to be closer to double that amount, at least $10 million. A serious offer would also have to take into account that a sale would trigger all sorts of additional costs, such as outstanding accounts payable, the long-standing environmental violation fines, penalties for breaking outstanding contracts with third parties such as the NHRA, and probably a bunch of other things that all businesses have on their books.

(It was pointed out to me that property values are probably higher in that part of the state than the average, so my calculations could be wildly wrong.)

There has been a lot of speculation about who is making the offer.

Here’s the thing – it doesn’t matter.

There are many reasons to buy that land in that location. It would make a great place for some sort of distribution facility, or a new retail shopping center, and maybe even new high-end homes.

It is important to note that New England Dragway WAS NOT FOR SALE. This offer came from a business entity that made an unsolicited offer to purchase the facility in its entirety. This is not the first time this has happened, and it probably won’t be the last. The history of the track is full of tales of friendly and hostile attempts to purchase the track, for a variety of purposes.

 

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WHAT HAPPENS NOW?

The shareholders have to vote on this. That vote will take place on December 2, 2021. I am sure that the track will inform the world of the results of that vote as soon as possible following the conclusion of that shareholder meeting.

According to the NH Dept. of State, there are a total of 679 shares of New England Dragway stock outstanding. I have always been told that there are approximately 150 shareholders, although that number goes up and down over time. I also know that two shareholders own the lion’s share of the outstanding shares. Between them, they own more than 70% of the total shares. (The “more than 70%” figure has been confirmed to be “VERY exaggerated”) Sources indicate that those two shareholders are on opposite sides of this issue.

On further investigation, I have determined that that the preceding information was incorrect. The number 70 is probably more or less correct, but that is more or less the NUMBER of shares that the two major shareholders own between them, not the percentage.

Most of the remaining shareholders own one share each. That would leave about 600 shares left, divided by about 150 shareholders. That would mean that each shareholders owns an average of FOUR shares. I still think that most shareholders only own ONE share. 

Each shareholder gets one vote, no matter how many shares they may own. (This is probably incorrect. I have reviewed shareholder voting rules for Domestic Profit Corporations and each share gets one vote. This means that if someone acquired more than 50% of the shares they would be able to control the corporation. This is NOT the case for New England Dragway, Inc. Neither of the two largest shareholders owns a majority interest. So, in the end, this error shouldn’t really make a big difference to the final result.)

Let’s do some quick math based on some logical assumptions.

Let’s assume that the offer is somewhere north of $10 million, enough to allow the business to settle its debts and still leave $10 million for the shareholders to split. That would leave a share value of about $14,700 for each share. Minus taxes. That’s hardly a life-changing payday.

If you are a shareholder and are still actively racing, or have family members that are, would $14 grand be enough to offset the loss of that activity? You would have to consider the money you have invested in the race car and the trailer and equipment. And then you would have to come up with something new to do every weekend that you can get into for less than $14,700.

 

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WHAT DO WE DO NOW?

First of all, don’t panic. I’m not going to speculate on how the shareholders will vote. But I do know that past history indicates that they will probably not accept this offer. In the meantime, all of my fingers and toes are crossed, and I am knocking on every piece of wood I can find.

Cam Murray recently pointed out that it is a wake-up call and I agree.

The good thing is that people are talking and thinking about New England Dragway and drag racing in the New England region.

I suggest that we take advantage of that and think of ways to build on that to help ensure that the business of running a drag strip is profitable. That will help protect us from losing any more drag strips.

Make an effort to remind all your gearhead friends that New England Dragway, Lebanon Valley Dragway, New Oxford Dragway, and Winterport Dragway still exist.

Get your butt to Epping, NH; West Lebanon, NY; Oxford, and Winterport, Maine, and buy a ticket. Take pictures and share them on social media.

Put together a listing for yourself and your race car on the Northeast Drag Racing Database (NEDRDB.com) and share that link with your friends.

Wear the t-shirts and the hats, and not just when you are at the drag strip.

Put a bumper sticker on all of your cars.

If you are a member of a car club think about having your club take a ride to a drag strip and having a little intra-club grudge racing fun.

Remind anyone who asks that you don’t need a race car to go drag racing.

Get some schedules from your favorite track and put them in your local businesses. Tack one on the corkboard at your favorite pizza joint.

Drag racing is a family-friendly, COVID-friendly, outdoor activity and a major driver of economic activity and jobs that require skilled labor.

 

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WHAT ABOUT THE FUTURE?

A lot of discussions have been going on about the future of drag racing and New England Dragway.

Someone else will make an offer to buy that land in the future. But they will always have an uphill battle getting the shareholders to agree to it.

Electric vehicles are coming. But anyone who buys a high-powered car is gonna wanna see how fast it goes, no matter what the power source is. We would be drag racing wheelbarrows if that is all we had.

Car Culture is not dead. That are still lots of people who are interested in modifying and racing cars. They may not be the type of cars you are interested in, but they are gearheads, and gearheads will always need a place to test out their latest and greatest efforts.

 

See you at the drag strip