Financial filing offers rare glimpse into NASCAR sanctioning stipulations
Dover International Speedway's sanction agreement offers some insight into NASCAR requirements for tracks. // David Griffin, NASCAR Scene
AVONDALE, Ariz. – A Dover International Speedway filing with the U.S. Securities and Exchange Commission this week offers an unusually detailed look at the range and scope of NASCAR’s sanctioning agreements, including a $6.055 million fee for the track’s May Sprint Cup race and $5.429 million for its September event.
Dover’s estimated broadcast revenue for the events will be $12.645 million for May and $10.473 million for September, according to the filing. With tracks having to contribute about 27.8 percent of their television revenue to the race purses, Dover’s television revenue pays for $3.51 million of its May purse and $2.91 million of its September purse.
The 2010 sanction agreements, minus the financial details listed on an amendment page, also were filed Thursday with the SEC. The 22-page sanction agreements are general in nature – only a cover sheet lists the date, the track and the promoter (in this case, Dover). Dover, which also owns tracks near Nashville and St. Louis but hosts Cup events only at the Delaware venue, must file the agreements with the SEC because it is these two agreements on which its “business is substantially dependent.” In a previous filing, Dover reported that 70 percent of its total revenues come from its Sprint Cup weekends.
Among the other items listed in the 2010 NASCAR Sprint Cup sanction agreements that Dover filed:
• The track must carry $50 million in liability insurance and $1 million in medical malpractice liability insurance. NASCAR must be listed among the insured. NASCAR must require the TV partner to carry $2 million in general liability insurance ($1 million limit per occurrence) that includes the promoter in that policy.
• A track cannot alter the racing surface by painting, sealing or resurfacing without prior written consent of NASCAR.
• NASCAR can postpone or cancel an event if the promoter does not fix any unsatisfactory racing surface, barriers, fencing, retaining systems, SAFER barrier systems, garage area, pit area, race control area, timing and scoring areas or structures used for broadcast of the event.
• NASCAR says it will attempt to consult with the promoter regarding postponement of events, but the decision to postpone is NASCAR’s.
• NASCAR gets 225 reserved choice grandstand tickets for the race and 200 for qualifying.
• The track must provide 325 parking passes/permits adjacent to or near the garage area for NASCAR and 50 in close proximity to the NASCAR track suite.
• The track must provide two pace vehicles. It also must provide 150 chairs in an enclosed, climate-controlled area for the drivers meeting. It must provide a control tower with air conditioning, heat, 14 chairs (with cushions), phone line and television monitors.
• The track must provide a television booth for at least five people, air-conditioned to 68 degrees. The TV partner also gets 300 tickets plus one luxury track suite. The track also must use “reasonable efforts to cause the title sponsor of the event to buy advertising in the telecasts.” NASCAR requires its broadcast partner to say the name of the race at least once during the opening segment of the telecast and thereafter at least once during each hour of the telecast.
• NASCAR reserves the right to approve or disapprove any advertising or sponsorship in connection with the event.
• The track must have authorization from any musician to play a song over loudspeakers during an event when the TV partner is on the air and there is a chance it would be picked up during the telecast.
• The track must not allow testing forbidden by the NASCAR testing policy.
• The track cannot use NASCAR’s point or money standings to determine the eligibility of a competitor for a non-NASCAR-sanctioned race at its track.
The general terms of the sanction agreements are virtually the same as last year with one notable exception, and it is in the section dealing with the potential default of a promoter.
In that section, an entire graph was added under the provisions of a default:
“If NASCAR becomes aware, through any means, of a possible change in the promoter’s affairs which might reasonably be determined to have a material adverse effect on the organization or conduct of the Event, including, but not limited to, the withdrawal or reduction of major event sponsorship(s), delinquencies or defaults by promoter in payments to other entities, litigation relative to the event, promoter or the facility, failure of promoter to perform under similar agreements with third parties for other events, and so on, then NASCAR may require promoter to take whatever action that NASCAR determines is necessary to insure the successful organization and conduct of the event. Such action may include, but is not limited to, posting a bond, providing an irrevocable letter of credit, and/or providing a financial instrument, or mechanism sufficient to guarantee, in NASCAR’s reasonable discretion, that all financial obligations of the promoter relative to the Event can be met.”
NASCAR officials didn’t immediately comment on whether that clause has anything to do with what happened earlier this year with the Milwaukee Mile. NASCAR has stated that there are unresolved issues concerning the 2009 races in its Nationwide and Camping World Truck series there.
