Forum: HoseHeads Sprint Car General Forum (go)
Moderators: dirtonly  /  dmantx  /  hosehead

This has been a hot topic on here. People using it as proof the WoO would not last. I'm surprised there is no comment on the explanation of this debt given in the latest SC&M interview.

I think everyone has pretty much come to the conclusion that DIRT doesn't concern itself with typical racing-oriented business models and instead plays by rules more familar to the Dot Com's.

In other words, they seem to have investors willing to float them a lot longer than the local banker is willing to float a small businessman like Joe Promoter.

if they can start turnin a profit, they will be ok

How much would could a wouldchuck chuck if a 
wouldchuck could chuck would

maybe, just maybe the money is bigger than the sanction....

Supposedly, DIRT's investors are in for the long haul. It has been two years now since they took the reigns, and they have had their back put up against the wall more than once. The latest being the NSL/NST drama. They seem to be able to keep things shiny side up though, and the investors still seem to be willing to stick it out.

By the way, SEC filing may be confusing as hell, but they aren't $56 million in debt.

The way I read it they say if you give them $25,000 for a share of their company then that shows as a $25,000 debt on their SEC filing even though it is not money they owe or have to pay back. So it's not the kind of "debt" most people think. That's why they show having $8million cash on hand but do not show paying anything on this "debt".

It is only debt if the people who own stock, cash it in.

But you first have to have a buyer before you can sell it. So in reality, if you buy the stock, you are stuck with it because the last time I checked, there were only around 4000 shares held by the private sector and if you watch the trading, there isn't much volume in their trading. I would suspect that 90% of their trading is from "market maker's"...

Member of this message board since 1997

I honestly couldn't care less how much debt DIRT carries............it just seems like a crude comparison to hear a DIRT head compare his company to Coca-Cola or another Fortune 500 company when it comes to debt. Just a tiny bit of difference there as far as cash flow, revenue, assets, etc.

"The Outlaws have people out here that don’t know 
anything about racing. I don’t understand how they 
come up with some of the calls they do. It makes me 
think that they just might be that stupid. It’s 
scary."     -Steve Kinser

I read that entire article, and as much as they want to dance around the issues, they are still in way over their heads. DrakPak is right, there is no way that DIRT can compare themselves to any Fortune 500 company because they are not being run like one.

The debt is real, not the make believe number they want people to believe it is. It seems no matter who they select to run the company, they give them all training in "spin control". I think that the current group of leadership is the best they have had since the start of DIRT, but they still don't answer questions with honest or direct answers & they still aren't doing anything to relieve the debt that has been aquired over the years.

I run two different companies myself, and in one of my companies I have financial investors. When it comes to the financials the money they have contributed to my company is not listed as debt as DIRT would have you to believe. It is known as shareholder equity. Any halfway smart business man knows exactly what I am talking about. Shareholder equity is NOT listed as debt and it can be positive or negative equity, but it has nothing to do with the debt of the company.

With all this being said, DIRT can operate with this huge debt as long as the people they owe money to allow them. As long as a major portion of the debt is not called in all at one time, DIRT could operate like this almost indefinitely, it is up to the people or companies they owe the money to. It seems in most cases DIRT has asked for and been given grace to continue to carry such a large debt load.

As far as the cash compared to the debt, well that is really another smoke screen. Many companies show what looks to be a lot of CASH on their balance sheets. But in reality, if the cash is not sufficient to cover outstanding debt, it is completely meaningless. 8 million sounds like a lot of money, but when you owe 56 million it is just peanuts and window dressing for the uniformed.

The prior management of DIRT put this company in a hole that they may never get out of. The current management looks to be "trying" to do the right things. I think they need to step back, possibly sell off some of their assets, reduce the debt to a managable level and start trying to become profitable from there. The mentality of the former leadership was to buy, buy, buy with no plan on how they were going to recoup their money. If the new leadership would take a step back and get things to a more managable level, they MIGHT be able to take two steps forward in the near (3-4 years) future. Just a business management perspective.

The way I look at it as long as the firewood is stacked high and the cooler is full I don't care what or who is racing. I'm partial to Sprints but I'll take anything on dirt regardless of the sanction. Cold beer tastes just as good whether it's the Outlaws or Pure Stocks.

We go to the dirt track campground to relax, do some bench racing and have a few cold ones. If a race happens to break out that's a bonus.

Stan Meissner

Hey Hawker; Merry Christmas !!!

Long Live  20 Time  World Of Outlaws Champion Steve 
Kinser #11 

sprintfreak I think that was an informative well-balanced opinion there. Although I do not see how a sprint car series gets 56 million in the hole. It seems to me like debt was accumalated elsewhere and then put into their sheets. By the way......is that possible? In this day of age I would think just about anything is possible. Especially when I read this book about Enron and how they did their spin control for so long. I would think if DIRT doesn't give honest answers to that question it might be a good thing as it could provide some ammo for dissension among the promoters, etc. But then again for shareholders thats wrong. One thing is definite.......there is way more to it than any of us know. So therefore there can't just be 1 right opinion.

And stan I agree with you as well. In 1 year there may be only 1 or 2 shows I see where there are no sprints, but there definitely has to be SOMETHING fast there. And if they have smaller classes (mini-stocks, FWD) than their has to be mods or some good stock cars there. And with my novelty of expected car counts the feature better be good.lol. I bet the Chili Bowl will blow my mind!

How much would could a wouldchuck chuck if a 
wouldchuck could chuck would

OKCFan12,

Keep in mind that DIRT Motorsports is more than just a sprint car series. DIRT Motorsports consists of the WoO Sprints, the WoO Late Models, the various DIRT Modified series, and several tracks which the company owns or leases for operation. So the debt everyone is talking about is accrued by more than running a sprint car series - largely from the purchase of all these things combined.

Signature here.

Jake B. is correct. It is not just the sprint series that has caused this problem. Quite to the contrary. It is because of all the purchases the prior leadership made with no real money and no plan to recoup the investment. That is how DIRT got into the situation they are in now.

If the current leadership can throttle back just bit and concentrate on the things that actually bring in positive cash flow, they might be able to dig themselves back out of this deep pit over time. The problem is, they carry such a debt load with too many non-profitable tracks, series, etc... I know that DIRT wants to be "King of the Hill" and that is fine, who doesn't want to be the biggest & the best? But, they need to get their house in order and start building from there.

I have been a huge critic of DIRT since day one as some people will remember, and mainly it has to do with how they run their business and how the previous leadership treated people (namely local racers and tracks). The new leaders seem to be more racer friendly, and I hope they have a knack for good business sense as well.

There are still a lot of positive things DIRT could do, but they need to work on their own situation before they try to save anyone or anything else.

Stan, I gotta agree with you, since I've been on a mod team the last 3 years. They took the sprints away a year ago and replaced them with Late Models at my track (of which the car count went up maybe 2 or 3 cars) . But, there was still racing we got to watch ( if we weren't fixin **it ), maybe not as exciting, and the beer still tasted good when the night was over. Maybe they should just start racing the stock cars and late models with wings on 'em.......

P.S....real race cars DON'T have doors!!!

Fenders are like vacuums... they both suck.