The following are excerpts from a May 5th media teleconference featuring Tom Compton, NHRA president; Graham Light, NHRA senior vice president, racing operations; Bob Owens, president and CEO of Sunoco; Rob Marro, general manager for performance products and automotive events of Sunoco:
GENO EFFLER: Good morning, everybody, this is Geno Effler, the vice president of public relations and communications for NHRA. Thank you all for joining us today.
We’ll be hearing from Tom Compton, the president of NHRA, as well as Bob Owens, the president and CEO of Sunoco. Also on the call to answer questions will be Graham Light, our senior vice president of racing operations at NHRA, and Rob Marro, the GM for performance products and automotive events.
After the opening statements from Tom Compton, we’ll turn it over to Bob Owens. After Bob’s remarks, we’ll go to the Q&A session.
We’re very excited about the future with Sunoco. As such, Sunoco will be the official fuel supplier of NHRA as well, including nitromethane. There will be on-site activation at NHRA national events as well as the opportunities for retail promotions to increase attendance and television viewership at NHRA at all of Sunoco’s gas stations and retail convenience stores in NHRA markets. The activation will include television, digital presence, on-site visibility, NHRA theme, consumer and retail promotions, all of which are designed to increase attendance and television viewership.
We’re excited about the partnership. It’s long-term. We’re looking forward to a long future with Sunoco going forward.
BOB OWENS: Thank you, Tom. We’re equally excited about this. Sunoco is a company that’s been around since the 1880s – actually before automobiles. We’ve been fueling motorsports for over five decades. We feel it’s in our DNA.
The opportunity to get involved at the highest level here is very appealing to us and we’re looking very forward to it. We’re a world leader in fueling motorsports with over 50 racing sanctions. It’s something that we take a great deal of pride in.
We’ve got today north of five-thousand retail sites. Coincidentally, we’re closing on another acquisition here even as we speak in Tennessee, and a week ago today we announced an acquisition primarily in Texas and New Mexico of another 1,200 service stations. While we’re about five thousand today, that number will grow closer to 6,500 in the very near future.
Our race fuels business is an international business. We really enjoy the position that it gives us with our consumer brands of retail gasoline. The opportunity to partner with NHRA is just a perfect fit from our perspective. We look very forward to working with the NHRA.
Q. As sophisticated as the Pro Stock engines are in both car and bike, has there been testing done with this spec fuel? How soon is the fuel going to be put in service at the track?
GRAHAM LIGHT: First off, the official fuel, racing fuel, goes into effect in 2015. It’s not immediate from the mandated fuel requirement. Sunoco already has product out in our venues for some of our sportsmen categories. They have many different blends. The blends are very, very close in specifications to what’s currently out there. We don’t see any problems with the conversion from the current spec fuel to the Sunoco product. The product is available. The teams can go test with it. Certainly in the wintertime I would anticipate the Pro Stock motorcycles and cars testing extensively with it.
Q. Sunoco does, in fact, have this great presence in another section of motorsports. I wonder if the Sunoco presence in the NHRA will be quite similar. Will the Top Fuel and Funny Car teams have the same benefit that (NASCAR) Sprint Cup teams have?
BOB OWENS: It’s our belief that these relationships are not individual but, in fact, are synergistic. All motorsports benefit from our presence. You will see, as Tom outlined, the different elements going forward. But it’s certainly our intent that the answer to your question would be yes, there will be great benefit on both sides of the table with this new relationship.
Q. To be more exact. A Sprint Cup team goes to a racetrack and has Sunoco-labeled cans. The fans know how important Sunoco is. Will you put that same kind of situation in place among teams that I’ve known over the years that kind of make their own fuel or mix their own fuel together, and they’re just in blank holders, if you will?
ROB MARRO: Part of our conversations and agreements with the NHRA is that we will be present at all the national events and having midway space, quite significant amount of midway space, to give exposure to our product and brand.
Part of that, as you mentioned, the five-gallon or ten-gallon jugs that have the current fuel supplier’s logo on it is something we’re looking at. We’re trying to maximize our exposure, to capitalize everything that can be capitalized on in this agreement.
Part of what we need to do is for the stars of the drag racing sport, you know, one of the things that we feel we can bring to the table is we can help give them the long overdue exposure that they may be seeking with our five-thousand-plus retail facilities, now with the potential, as Bob mentioned, of over six thousand. We look forward to potentially having those types of relationships.
Q. For the Sunoco guys. Since natural methane is not made in the United States, will you be importing it from China as it’s currently done? Does this mean nitromethane will be available in Sunoco stations nationwide in whatever quantities?
ROB MARRO: We have not taken a look at the distribution of nitromethane outside of the NHRA. That’s something we’re in the planning stage right now.
As far as where the nitromethane comes from, as Bob opened up, we are the world leader in motorsports and supplying of fuels for motorsport. We will look in every avenue for opportunities for sourcing the product. If that means it comes from the current manufacturer that supplies the current official fuel, then we’re more than open for that. But we have our supply contacts throughout the world and we will fully utilize them.
We have a supply and trade department here at Sunoco that is quite extensive that would do a lot of the lifting for us in determining where the product is that meets the specs that the NHRA requires of Sunoco.
Q. Is there any way that is going to trickle down to the Heritage Series for nitro racing?
GRAHAM LIGHT: I think it’s probably a little premature to think about that. Today’s announcement is announcing a 2015 program. Those months between now and then are going to be used up in a lot of ways. The Heritage thing is certainly a possibility down the road, but I think it’s premature to make that assumption at this point.
Q. For NHRA, what specifically set Sunoco apart from other options as you were examining having a relationship of this magnitude?
GRAHAM LIGHT: I think Bob touched on it earlier. They have a long history in motorsports. They’ve been successful in many forms of motorsport. They’re known for their involvement in motorsports and their support of motorsports. That made it pretty easy to know they had the capabilities we were looking for. They expressed a long interest. We’ve talked to Sunoco I think the first time 12 years ago. This is something that has been brewing for a long time. We’re just real pleased we’re able to make the announcement today and formalize the relationship beginning next year.
Q. Graham, with Sunoco supplying the ethanol that the boys are using in NASCAR, any consideration of bringing that over into the Pro Stock categories?
GRAHAM LIGHT: We talked not only about that but also methanol over the course of time, too.
First off, our brand of racing doesn’t use the volume of gasoline that maybe some other types of racing do. While we’re all about green and so on, we also are concerned about the cost to the competitor. When you have a change as significant as that, there’s a fairly extensive cost that goes with that, not only in the research and development of engine components, but also the money to go out and test and to perfect a new combination.
In this economy, we’re very cautious not to burden our race teams with costs. When you spend all that money, the bottom line is the same, people win the races. Everybody has spent a lot of money. That’s something we’ve looked at over the years. It’s not necessarily off the table, but it’s not a path we’re going to go down immediately.