Track owners bear a large share of the criticism for lackluster attendance — cut the ticket prices, the thinking goes, and the people will show up — but the latest financial reports indicate that the tracks are facing an environment even more dire than expected.
Three entities — International Speedway Corp., Speedway Motorsports Inc., and Dover Motorsports Inc. — have different track holdings but similar stories. Even with cuts in ticket prices — 11 percent, according to ISC officials — the tracks are struggling because of reductions in sponsorships and corporate spending, as well as commensurate drops in souvenirs and refreshments while fans are at the track.
The tracks are dependent on television revenue, which increases at an annual rate of 3 percent per year — nice, but nothing compared to the 17 percent per year under the previous contract. And when this contract runs out in 2014, it's a safe bet that the guaranteed revenue will be far smaller, if indeed it is guaranteed at all.
Here are some specific breakdowns per operator for the first nine months of the year:
• Speedway Motorsports saw losses in ticket sales ($118 million, down from $140 million) and event-related revenue ($125 million down from $143 million). As a result, the company has lowered its earnings forecast for the year.
• ISC is seeking to try to reduce expenses by up to $30 million, and has done so by shuttering the Daytona 500 Experience and continuing to keep ticket prices low, perhaps artificially low.
• Dover Motorsports saw declines in ticket revenue from $23 million to $19 million, and event revenue fell from $16.3 million to $14.4 million.
In short: everybody's hurting. And as bad as it is now, if things don't turn around soon, there will be some serious pain once the TV contract runs out after 2014.
- Dover Motorsports