SMI agrees to buy Kentucky Speedway for $78M, intends to add Cup race
By Bob Pockrass - Associate Editor
Thursday, May 22, 2008
Bruton Smith, Speedway Motorsports Inc. chairman and CEO, shakes hands with Kentucky Speedway founder Jerry Carroll Thursday.
David Griffin
NASCAR Scene
Former owner: Kentucky sale predicated on promise of Cup date
Kentucky antitrust lawsuit continues despite sale
Two SMI presidents deny tracks may lose race dates
NASCAR: No Cup date set for Kentucky yet
Speedway Motorsports Inc. officials confirmed Thursday afternoon that the company has bought Kentucky Speedway and that the track hopes to host a NASCAR Sprint Cup race, possibly as early as 2009.
SMI purchased the 1.5-mile oval in Sparta, Ky., that opened in 2000 and has been in the center of an antitrust lawsuit against NASCAR and SMI rival International Speedway Corp. since 2005.
Bruton Smith, SMI chairman and CEO, said that his group has nothing to do with the lawsuit brought by the former ownership group, led by Jerry Carroll. The acquisition is expected to close in the third quarter of 2008, according to a news release.
The track cost $152 million to build. According to documents filed with the Securities and Exchange Commission, SMI bought it for $78.3 million – the assumption of $63.3 million in debt, $7.5 million in cash and an additional $7.5 million when certain conditions are met.
SMI has a 90-day due diligence period that began Wednesday, and it can choose to terminate the agreement.
The original ownership group of the speedway could continue to have its antitrust lawsuit go through the U.S. Court of Appeals while SMI completes the purchase and begins operating the track. The appeals court is in the process of determining whether there should be a trial in the case after a U.S. District Court judge threw out the lawsuit, citing flaws in the theory presented by Kentucky Speedway’s expert in the case. SMI, though, cannot be involved in the lawsuit as part of a settlement in a previous SMI shareholder antitrust lawsuit against NASCAR and ISC.
Kentucky Speedway has played host to NASCAR Craftsman Truck Series races since 2000 and NASCAR Nationwide Series races since 2001.
Those events are expected to continue, but now Smith is looking to add a Cup date as well and said he could do so by the 2009 season. The track currently has 66,000 grandstand suites and 50 luxury suites.
Smith would not say where he would move a Cup date from to accommodate the track. He played coy when it came to addressing whether he was in talks with Pocono Raceway about buying that track and moving a date from there to Kentucky.
“I don’t believe I can answer that properly,” he said when asked specifically about whether he was negotiating with Pocono concerning a purchase of that track. “I’m always interested in a speedway. … But here again if I say something about Pocono, it would indicate to you that it’s for sale. I don’t know if it’s for sale or not, but if you’re telling me it is, then I’ll make a phone call tomorrow.”
He reiterated that his intent Thursday was talking about Kentucky, not another track. He said it would take a couple of months to expand seating at the track to accommodate a Cup date. He also said his group knew how to handle the seepage problem that has cropped up at the track in recent months.
Smith added that he has secured a commitment that Carroll, who was instrumental in the development of Kentucky Speedway, will remain involved with the track.
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3 responses to "SMI agrees to buy Kentucky Speedway for $78M, intends to add Cup race ". Post a Comment.
Anonymous said:
May 22, 2008 at 12:00 PMback of the pack NASCAR, INDY'S back united as ONE
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» Confirm Abuse ReportAnonymous said:
May 22, 2008 at 3:21 PMOn May 21, 2008, Speedway Motorsports, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Agreement”) with Kentucky Speedway, LLC to purchase substantially all of the assets of Kentucky Speedway, LLC, through the assumption or satisfaction of $63,300,000 in debt, the payment of $7.5 million payable in sixty (60) monthly installments of $125,000 beginning thirty (30) days after closing, and the contingent payment of an additional $7.5 million (the “Contingent Payment”). The Contingent Payment would be paid in sixty (60) monthly installments of $125,000 beginning on the first day of the month following the satisfaction of specified conditions. Kentucky Speedway hosts one NASCAR Nationwide Series event, one NASCAR Craftsman Truck Series event, one IndyCar Series event, and other racing events each year.
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» Confirm Abuse ReportTimothy Schultze said:
May 22, 2008 at 5:00 PMLOL Your dreaming if you think that NASCAR has to even attempt to compete with ON AGAIN OFF AGAIN INDY even with the lackluster racing the NEW car brings. LOL
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