The owner of Lowe's Motor Speedway is weathering the impact of high gas prices on fan spending, thanks in part to hosting more races this year.
Speedway Motorsports, which owns seven major tracks across the country, on Wednesday reported a second-quarter profit of about $47 million, up 17 percent from a year earlier. Revenues grew by a similar amount, rising 18 percent to $212.8 million.
Those increases, however, came as Speedway Motorsports hosted two more NASCAR races in the second quarter – at the newly acquired New Hampshire Motor Speedway – than in the same quarter last year. In addition, Bristol Motor Speedway hosted a major drag racing event during the quarter after holding the same event in the third quarter of 2007.
The additional races helped offset weaker ticket sales and spending by race fans, company executives said. Admissions revenues were up 1.8 percent from the second quarter of 2007 – an improvement over a 5 percent dip in first-quarter admissions revenues. Yet the company expects admissions to remain soft the rest of this year, said Marcus Smith, chief operating officer and president, during a conference call with investors.
Shares in Speedway Motorsports closed Wednesday at $20.10, down 2 cents, or 0.1 percent. Over the past year, the stock price has lost almost half its value, dropping from a high of more than $39 in early August last year.
The hit to admissions revenues this year has been muted somewhat by fans generally buying premium tickets first, said Bill Brooks, vice chairman and chief financial officer of Speedway Motorsports.
Still, Brooks said, “people are deferring their purchase when they're able to, and fewer are buying in advance.”
Speedway Motorsports also has been affected by big losses at U.S. automakers, with General Motors telling the company last month that it won't renew contracts at the New Hampshire and Bristol tracks.
Speedway Motorsports is looking for other sponsors, Smith said, noting that the companies that have partnered with NASCAR, race teams and venues have changed over time. Where motor oil companies once dominated, he said, insurance companies now are prominent.
“We'll see those various categories come and go,” Smith said. “We've always been able to fill the gap.”
In fact, Smith said, Speedway Motorsports has turned down a couple of potential sponsors for the spring Sprint Cup race at Las Vegas Motor Speedway, holding out for the best fit.
Otherwise, company executives remain confident that this year's percentage dip in attendance will stay in the low single digits.
Just as “a Baptist goes to church on Sunday,” Smith said, NASCAR fans will keep coming to the track.
“A race fan is not a casual fan,” he said. “They've made a lifestyle decision to be a fan, and you just don't stop going to races if you've got to spend a little extra on gas or things are tight.”
Jefferson George: 704-358-5071
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