QUOTE AND NEWS
DailyFinance  Apr 15  Comment 
Speedway Motorsports, Inc. (SMI) (NYSE:TRK) on April 15, 2014 declared a quarterly cash dividend of 15 cents per share of common stock. The quarterly dividend will be payable on June 6, 2014, to shareholders of record at the...
Benzinga  Mar 6  Comment 
Below are the top small-cap sporting activities stocks on the NYSE and the NASDAQ in terms of operating margin. The trailing-twelve-month operating margin at Dover Motorsports (NYSE: DVD) is 19.47%. Dover Motorsports' ROE for the same period is...
StreetInsider.com  Mar 5  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Speedway+Motorsports%2C+Inc.+%28TRK%29+Tops+Q4+EPS+by+1c/9247821.html for the full story.
Forbes  Mar 4  Comment 
Analysts are predicting grim results for Speedway Motorsports when the company releases its fourth quarter numbers on Wednesday, March 5, 2014. They are expecting the company to take a loss of three cents a share after Speedway Motorsports booked...
StreetInsider.com  Feb 12  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Speedway+Motorsports%2C+Inc.+%28TRK%29+Declares+%240.15+Quarterly+Dividend%3B+3.2%25+Yield/9158998.html for the full story.
StreetInsider.com  Feb 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Timken+%28TRK%29+Files+Form+10+for+Spinoff+of+TimkenSteel+Corporation/9154240.html for the full story.
StreetInsider.com  Oct 30  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Speedway+Motorsports%2C+Inc.+%28TRK%29+Misses+Q3+EPS+by+7c%3B+Cuts+FY13+EPS+Outlook/8824863.html for the full story.
StreetInsider.com  Oct 18  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Speedway+Motorsports%2C+Inc.+%28TRK%29+Declares+%240.15+Quarterly+Dividend%3B+3.1%25+Yield/8788988.html for the full story.
StreetInsider.com  Jul 31  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Speedway+Motorsports%2C+Inc.+%28TRK%29+Misses+Q2+EPS+by+2c%3B+Reaffirms+Outlook/8549839.html for the full story.
Forbes  Jul 29  Comment 
Speedway Motorsports is expected to report lower second quarter earnings on Wednesday, July 31, 2013 with analysts expecting a 3% drop in earnings from a year ago. The consensus estimate is 63 cents per share, down from earnings of 65 cents per...




 
TOP CONTRIBUTORS

Speedway Motorsports (NYSE: TRK) is the second-largest owner/operator of motorsports racetracks in America. The Company owns/operates seven racetracks which host a combined 26 NASCAR-sanctioned events: eleven Sprint (formerly NEXTEL) Cup Series races, eight Nationwide (formerly Busch) Series races, and seven Craftsman Truck Series races. The racetracks host non-NASCAR races as well, but NASCAR series events are the Company's most important source of revenue, accounting for 82% of total revenues in FY 2007.[1]

In addition to revenues from admissions, merchandise, food sales, approximately 25% of the company's total revenues come from television rights fees and corporate sponsorships. In 2007, NASCAR signed a new eight year broadcast agreement with Fox, ABC/ESPN, TNT, and Speed worth $4.5 billion. In 2007, this agreement generated $142.5 million for Speedway Motorsports and the Company predicts its value will increase by 3% per year through 2014.[2] The long-term nature of these contracts provide TRK with a certain amount of financial stability. That said, Four sponsors (General Motors (GM), Chrysler, Sears Holdings (SHLD), and Chevron Corporation (CVX)) have already announced that they will drop or reduce their NASCAR team/event sponsorships next season and NASCAR's third-tier truck series is searching for a new naming sponsor.[3] TRK is looking for a new naming sponsor for its Spring 2009 Sprint Nextel Cup Series Race in Las Vegas and the search will be more difficult in light of these sponsorship cutbacks.[4] Between March 30 and June 30, 2008, TRK reported lower attendance rates at NASCAR-sanctioned events at three of its racetracks and attributed the lower numbers to more conservative consumer spending habits.[5]

Business Financials

In FY 2007, Speedway Motorsports had revenues of $561.6 million, a decrease of 1% from FY 2006. Net Income in 2007 decreased 65.5% from 2006, primarily as a result of the poor performance of Motorsports Authentics - a joint-venture with Speedway Motorsports that designs, promotes, markets, and distributes motorsports licensed merchandise. Speedway Motorsports lost $57.4 million in Motorsports Authentics when most of its inventory's value was stripped when the sponsorships for NASCAR's two largest series changed and many high-profile drivers joined new teams/sponsors.[6]. The other primary factor in depressing total revenues was a 12% decrease in NASCAR Broadcasting revenue which is discussed below.

Error creating thumbnail
TRK Revenues and Net Income[7]
Error creating thumbnail
TRK Revenues by Segment[8]

Business Segments

  • Admissions (32% of Total Revenue) - This segment only includes ticket sales for all of the various events held at any of Speedway Motorsports' racetracks. Grandstand ticket prices at NASCAR-sanctioned events ranged from $17-$146[9] and in 2007, almost 4 million fans attended events at the Company's racetracks.[10]
  • NASCAR Broadcasting (25% of Total Revenue) - In 2007, NASCAR signed a new eight year broadcast agreement with Fox, ABC/ESPN, TNT, and Speed worth $4.5 billion. In 2007, this agreement generated $142.5 million for Speedway Motorsports and the Company predicts that its value will increase by 3% per year through 2014.[11]
  • Sponsorships (11% of Total Revenue) - This segment includes all revenue generated from corporate sponsorships including sponsorship of particular racing events ("Coca-Cola 600"), of the "Official Car" at our speedways (ex: Chevrolet), and ten-year facility naming rights agreements (Lowe's Motor Speedway at Charlotte). None of the individual sponsorship contracts exceeded 5% of total revenues in 2007.[12]
  • Other Event Related (21% of Total Revenue) - This sector earns revenue from the sale of food, beverage, souvenirs, and luxury suite rentals during events at Company tracks. This segment generated $115.5 million in revenue in FY 2007.[13]
  • Motorsports Event and Non-Event, Non-Motorsports, Related Merchandise (9% of Total Revenue) - This sector primarily consists of revenues from the sales of motorsports related souvenir merchandise. This segment generated $52.7 million in revenues in FY 2007.[14]

Key Trends and Forces

Purchase of New Hampshire Speedway

In January 2008, TRK purchased New Hampshire International Speedway (NHS) for $340 million cash.[15] The 96,000 seat track in Loudon, New Hampshire has agreements to host two NASCAR Sprint Cup races, one NASCAR Nationwide Series race, and one NASCAR Craftsman Truck Series race in 2008.[16] The addition of a new track has already begun to impact the Company's bottom line with total revenues in the first quarter of 2008 up 17.7% since a year ago; admissions revenues alone increased 18% due to a NASCAR Sprint Cup race held NHS.[17]

Adverse Effects of Reduced Consumer and Corporate Spending Habits

Professional car racing generates more revenues from advertising than any other sport. According to one source, many NASCAR teams receive 80% of their funding from corporate sponsorships.[18] NASCAR and Speedway Motorsports are vulnerable to any cutbacks in corporate spending/advertising, and to a lesser degree, cutbacks in consumer spending. The Company has seen fewer advance ticket sales and lower attendance at some of its races in 2008. Magement expects, however, claims that attendance at its signature NASCAR events has remained relatively constant.[19] The amount of money advertisers are willing to spend on NASCAR is related to NASCAR's popularity and vast reach; fortunately for Speedway Motorsports, a signifcant portion of their revenue is set in long-term TV contracts, multi-year sponsorship deals, and in association with the NASCAR brand. [20] Present economic woes are already impacting NASCAR's sponsorship revenues; some sponsors have begun reducing their commitments for next season and a number of teams and races are looking for new corporate sponsors.[21]

Loss of Revenues Due to Event Delays/Postponements

All of TRK's venues are outdoor racetracks and thus susceptible to adverse weather conditions that can delay or cause the cancellation of events. Many races sell out beforehand but for the races that don't sell out, the threat of bad weather can have a negative impact on walk-up ticket sales. Delaying events also has a negative impact on revenue because it hurts walk-up ticket sales, many people leave before the race, depriving the company of concessions revenues, and television revenue is decreased because a smaller audience will tune in to the race if its not run at its expected time. Because of the collective nature of the broadcast contracts, if any NASCAR Series events are canceled at any racetracks, even those not owned by TRK, the company would lose a portion of live broadcast revenues.[22]

Competition

The cost of building and owning a racetrack, the limited number of motorsports races, and limited media contracts are all significant barriers to entry in the motorsports entertainment industry, inherently limiting Speedway Motorsports competition. The company's main competitors in motorsports entertainment are International Speedway (ISCA) and Dover Motorsports (DVD), however all of these companies see their competition as other professional sporting leagues and events such as the NFL, NBA, and MLB.

International Speedway (ISCA) - The largest operator of motorsports racetracks in the US, this company operates 13 racetracks versus Speedway Motorsports' 7 and hosted 46 NASCAR Series events compared to Speedway Motorsports' 26 events. In FY 2007, International Speedway's revenue was $816.6 million. International Speedway and Speedway Motorsports are co-owners of Motorsports Authentics, the leading producer of motorsports licensed merchandise. NASCAR-sanctioned racing events accounted for 85.8% of International Speedway's 2007 total revenues.[23]

Dover Motorsports (DVD) - Dover Motorsports is the third largest operator of motorsports racetracks in the US. They operate 4 racetracks and hosted 12 NASCAR Series races in 2007. In FY 2007, Dover Motorsports had revenues of $86.1 milion.[24]

Speedway Motorsports (TRK) [25] International Speedway (ISCA) [26] Dover Motorsports (DVD) [27]
Tracks 7 13 4
Grandstand Seats 853,000 1,130,000 359,000
Total Revenue - FY 2007 ($ mil) 561.6 816.6 86.1

Market Share

The number of motorsports events in the US is limited and although there are many permutations of the sport - Indy Racing League, National Hot Rod Association, motorcycle, etc. - NASCAR is the largest revenue generator by far. The NASCAR Sprint Cup Series has 39 races, the Nationwide Series has 34 events, and the Craftsman Truck Series consists of 25 races. In total, there are 98 NASCAR Series races [28] and in 2007, Speedway Motorsports racetracks hosted 26 of these events (27%).[29]

Speedway Motorsports (TRK) [30] International Speedway (ISCA) [31] Dover Motorsports (DVD) [32] Other Racetracks
NASCAR Sprint Cup Series Events 11 21 2 5
NASCAR Nationwide Series Events 8 16 6 4
NASCAR Craftsman Truck Series Events 7 9 4 5


References

  1. TRK 2007 10-K Item 1: Business, page 4
  2. TRK 2007 10-K Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 34
  3. Nascar Hits Wall as Financial Crisis Dents Sponsorships Demand, Bloomberg.com 10/15/08
  4. TRK 2Q 2008 Earnings Call
  5. TRK 2008 2Q 10-Q Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 36
  6. TRK 2007 10-K Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 41
  7. TRK 2007 10-K Item 6: Selected Financial Data, page 29
  8. TRK 2007 10-K Item 1: Business, page 12
  9. TRK 2007 10-K Item 1: Business, page 11
  10. TRK 2007 10-K Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 34
  11. TRK 2007 10-K Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 34
  12. TRK 2007 10-K Item 1: Business, page 12
  13. TRK 2007 10-K Item 1: Business, page 11
  14. TRK 2007 10-K Item 1: Business, page 11
  15. TRK 2007 10-K, Item 1: Business, page 4
  16. NASCAR Schedule 2008
  17. TRK 2008 2Q 10-Q Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 36
  18. Feeling the Need for Speedway Motorsports istockanalyst.com, 11/5/2008
  19. TRK 2nd Quarter 2008 Earnings Call
  20. TRK 2007 10-K, Item 1A: Risk Factors, page 15
  21. Nascar Hits Wall as Financial Crisis Dents Sponsorships Demand, Bloomberg.com 10/15/08
  22. TRK 2007 10-K, Item 1A: Risk Factors, page 15
  23. ISCA 2007 10-K, Item 1: Description of Business, pages 2-5
  24. DVD 2007 10-K, Item 1: Business, pages 3-4
  25. TRK 2007 10-K, Item 1: Business, pages 3-4
  26. ISCA 2007 10-K, Item 1: Description of Business, pages 2-5
  27. DVD 2007 10-K, Item 1: Business, pages 3-4
  28. List of 2007 NASCAR races, Wikipedia
  29. TRK 2007 10-K, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 32
  30. TRK 2007 10-K, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 32
  31. ISCA 2007 10-K, Item 1: Description of Business, pages 2-5
  32. DVD 2007 10-K, Item 1: Business, pages 3-4
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki