Opinion: Time To End Misappropriation Of AMA Non-profit Assets by Dissolving AMA Pro Racing, Firing Everybody, And Starting Over

Opinion: Time To End Misappropriation Of AMA Non-profit Assets by Dissolving AMA Pro Racing, Firing Everybody, And Starting Over

© 2003, Roadracing World Publishing, Inc.

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Copyright 2003, Roadracing World Publishing, Inc.

FIRST PERSON/OPINION

By Trudy C. Ulrich
(AMA member #452000)
President and Publisher
Roadracing World Publishing, Inc.

In an editorial posted October 6, racer Steve Atlas called for AMA Pro Racing to listen to the majority of the paddock and keep Thursday practice, saying that it is needed by the 90 percent of racers who aren’t on factory teams, and that AMA Pro Racing should adhere to Article II of the American Motorcyclist Association’s Code of Regulations, which states, “The purpose of the Corporation is to pursue, promote, and protect the interests of motorcyclists, while serving the needs of its members.”

That sounds like a pretty good argument, Steve, except for one thing: AMA Pro Racing is not the AMA, and those aren’t AMA Pro Racing’s bylaws!

AMA, the non-profit organization, has an AMA Sports department that sanctions races, but about 10 years ago created a separate, for-profit subsidiary corporation, AMA Pro Racing, for the sole purpose of competing in motorcycle race promotion. Specifically, to compete with Roger Edmondson’s CCS/NASB after renouncing a joint venture with him.

AMA Pro Racing is a for-profit organization, with the stated purpose of making money, and the only time AMA Pro Racing is going to care about what the individual racer wants or needs is when it affects the bottom line. AMA Pro Racing, as a separate for-profit entity, has no obligation (nor inclination) to uphold the AMA’s bylaws.

There’s really not too much that AMA Pro Racing and the AMA have in common. AMA non-profit champions the rights of qualified individual members in good standing to participate in AMA-sanctioned races of their choice, and earlier this year disbanded an entire AMA District for denying entry in AMA Sports-sanctioned off-road races to a qualified member whose rights district officials didn’t take seriously.

In stark contrast, AMA Pro Racing recently denied the rights of three qualified individual members in good standing (Josh Hayes, Vincent Haskovec and Steve Rapp) to participate in AMA Pro-sanctioned races of their choice, in a botched last-minute attempt to keep Mat Mladin and Aaron Yates from using Formula Xtreme qualifying as Superbike practice. Instead of specifically targeting Mladin and Yates, AMA Pro Racing cast a needlessly-complicated, way-too-wide net restricting riders who were in the top 10 in points in either class from racing in both Superbike and Formula Xtreme, unless they were Jason Pridmore, who was granted a personal loophole (he was the only rider that loophole applied to). AMA Pro Racing did it without worrying about the impact on other riders, and wouldn’t reconsider, even when that impact was pointed out. When Rapp appealed, AMA Pro Racing stated that there was no compelling reason to allow him to compete in both Formula Xtreme and Superbike as he wished, and that he was not a serious Superbike competitor. No compelling reason? Not a serious competitor? What about his best finishes of fifth and sixth in AMA Superbike races in 2003, and of fourth in AMA Formula Xtreme races in 2003? What about individual rider rights? Oh wait! Nevermind. It’s not the AMA. It’s AMA Pro Racing, and they don’t worry about the rights of individual racers. And of course, nobody disbanded AMA Pro Racing for denying entry in AMA-sanctioned road races to qualified members who AMA Pro Racing didn’t take seriously.

This is nothing new: AMA Pro Racing not only often fails to hold up the ideals of AMA non-profit, AMA Pro Racing often actively works against the ideals of AMA non-profit.

AMA is supposed to be an organization to benefit all motorcyclists, while AMA Pro Racing seeks to produce an elitist, non-inclusive series with minimal input from participants at large.

AMA is supposed to be an organization to benefit motorcyclists, yet when it comes to the safety of racers, AMA Pro Racing has often had to be forced to take action.

AMA sells memberships and takes donations on the premise that it will uphold its bylaws to benefit motorcyclists, and these funds are then used to support AMA Pro Racing, a for-profit organization that has yet to turn a profit while paying its executives handsomely. (AMA’s publicly available tax statements call these cash infusions “investments.” In my personal opinion, they’re about $2 million in “misappropriated member dues.”)

AMA is supposed to be an organization to benefit motorcyclists, but a federal court found that AMA Pro Racing engaged in unlawful activity to steal the assets of Edmondson’s motorcycle racing organization (CCS/NASB), and ultimately the AMA settled a resultant lawsuit that cost the Association an estimated total of about $6 million.

Non-profit AMA and for-profit AMA Pro Racing not only work against each other, one, in fact, cannibalizes the other, with AMA Pro Racing eating away at the AMA’s money, reputation, and everything that AMA is supposed to stand for.

It’s ironic, because what really gives AMA Pro Racing a leg-up in the racing business is its close association with AMA non-profit. From the instant it was created, AMA Pro Racing had a benefit not afforded other racing organizations: The name AMA, and all it stands for; all its resources; the momentum of 60 years of existence; AMA’s goodwill, status and reputation in motorcycle industry; the support of motorcycle manufacturers; and its membership of 260,000 people.

Besides the financial backing, all those intangibles were appropriated by the for-profit organization, AMA Pro Racing. It was a gift, a benefit to a single for-profit corporation, by a non-profit organization, and I’m not sure how that can even be legal (where non-profit law is concerned.)

If someone wanted to start Joe’s Race Club, Inc., competing in the harsh business environment of race promotion, it would be pretty hard to do. But give Joe’s Race Club the name AMA and suddenly, it’s world class.

In my opinion it’s a gift that AMA, the non-profit organization, should NOT have been able to give, because AMA Pro Racing has taken all the benefits of its association with AMA non-profit and none of the obligations or accountability.

AMA Pro Racing does not exist for the benefit of you, Steve, or any other racer in the paddock. It is a for-profit corporation, and the only thing that matters is the bottom line. (Silly boy! What were you thinking?)

So when stuff goes wrong, you have nothing to complain about and no one to complain to.

So, what can be done? Over the last two years, a status-quo majority on the Board of Directors of AMA non-profit has failed to support attempt after attempt to make AMA Pro Racing truly accountable to the AMA Board and responsive to members. That status-quo majority recently blocked an attempt by a reform minority to take direct control of AMA Pro Racing and ensure that racing business conducted under the AMA banner be held to AMA standards and to the AMA Code of Regulations requiring that AMA “protect the interests of motorcyclists, while serving the needs of its members.”

It’s up to the AMA Board of Directors to sort this out–and it’s up to the members to replace any director who stands in the way. The AMA Board must ensure that non-profit assets will never again be given to a for-profit entity. Those assets appropriated by AMA Pro Racing–the financial backing of AMA non-profit, and those valuable intangibles, in particular, the name AMA, which in itself holds the goodwill of the non-profit entity–belong to AMA members and cannot be gifted to a for-profit company.

AMA Pro Racing’s event sanctioning and all related business activities must return to direct control of AMA non-profit, as a department of the Association. AMA Pro Racing as a separate entity must be dissolved.

Complicating the situation is the fact that only six of 12 seats on the Board of AMA non-profit are elected by the 260,000 individual members. The other six are elected by the representatives of about 16 corporations, in a once-a-year vote held at the Indy trade show. This February, those corporations must be held accountable for how their representatives cast their votes.

It’s time for members to take back the AMA. (Sound familiar?)

See related posts:

10/6/2003 Opinion: Time For AMA To Consider Paddock Majority
9/22/2003 Attempt To Dissolve Pro Racing Board Fails
10/10/2003 About Duhamel And That Rock-throwing Deal At Barber…
10/8/2003 Updated Post: Racers Comment On Those AMA Speeding Tickets, And Inconsistent Officiating…
10/7/2003 AMA Pro Racing Penalties: $100 For Speeding On Pit Lane, $0 For Throwing Rocks On Live Racetrack
8/29/2003 Apparently, AMA Pro Racing Officials Involved In Writing And Enforcing Rules Are Not Required To Be Proficient In The English Language
8/21/2003 AMA Pro’s Own Rulebook Says A Regulation Is A Rule
8/15/2003 AMA Semantics 101: No Comment Period Needed Because A Regulation Is Not A Rule, And The Factory Few Demanded Something Be Done Immediately About Mladin
8/13/2003 Updated Post: New Rule Was Never Discussed By AMA Pro Road Racing Advisory Board
8/13/2003 New AMA Rule Will Penalize Hayes In Superstock Championship Battle
8/12/2003 Updated Post: Haskovec Banned From Formula Xtreme By New AMA Pro Rule
8/12/2003 Pick One: AMA Pro Racing Limits Superbike/FX And Supersport/Superstock Entries

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