Motorsports Authentics facing possible bankruptcy
By Bob Pockrass - Associate Editor
Wednesday, October 07, 2009
Motorsports Authentics needs extensions to pay off royalties and to renegotiate contracts with various teams or it could end up in bankruptcy, according to a Speedway Motorsports Inc. filing with the U.S. Securities and Exchange Commission on Wednesday morning.
Owned 50-50 by track operating rivals SMI and International Speedway Corp., Motorsports Authentics holds the rights to sell clothing, diecasts and other merchandise for many of the top drivers and teams in the sport, including Dale Earnhardt Jr., Hendrick Motorsports and Stewart-Haas Racing.
Motorsports Authentics stopped paying certain guaranteed royalties under several license agreements during the summer when royalties on the projected sales were less than the guaranteed minimum royalties, according to the SEC filing. The company has received notice from licensors alleging default if Motorsports Authentics doesn’t pay the unearned royalties by certain deadlines.
“MA is attempting to obtain extensions from licensors where cure periods, including any subsequent extensions, have lapsed or are near termination,” SMI wrote in its filing. “MA is attempting to renegotiate its license agreements with essentially all present significant licensors of NASCAR merchandising on terms that allow MA reasonable future opportunities to operate profitably.
“Should such negotiations not be successful, should MA management decide to allow license defaults to remain uncured or should licensors not grant extended cure periods and exercise their rights under the agreements, MA’s business and its ability to continue operating could be severely impacted. MA is exploring other business strategies to turn its business around. If such efforts are not sufficient or timely, MA could ultimately pursue bankruptcy.”
ISC and SMI spent approximately $247.5 million in 2005 to buy Team Caliber and Action Performance to form Motorsports Authentics. They combined to write down $69.499 million in 2007 and recently combined to write down $111.2 million. A write-down is a devaluation of the company.
SMI has indicated its current investment value in Motorsports Authentics as of June 30 was $18.1 million. That means it estimates the company’s worth at $36.2 million. In another filing Wednesday, SMI indicated that the company overall has $23.4 million in guaranteed obligations that must be paid.
Motorsports Authentics lost $7.878 million in 2006 and $42.975 million in 2007, not including the $69.499 million write-down, before turning a profit of $3.199 million in 2008.
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32 responses to "Motorsports Authentics facing possible bankruptcy ". Post a Comment.
MotorsportsPhotography said:
Oct 7, 2009 at 9:48 AMMA cannot survive with the amount of merchandise they produce. We bought over 1 million dollars of #8 Budweiser Apparel off them for 10 cents a piece and we are selling them at every race for a Buck apiece. Dale Jr sales have dropped drastically and his trailers went from 6 to 3 at the track. If it wasn't for us independents buying millions of dollars worth from them every year they would have folded years ago.
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» Confirm Abuse Reporttimmytoad1 said:
Oct 7, 2009 at 11:03 AMThats what they get for drastically overpricing stuff over the years. They got greedy and now that the economy is in the dumps they are begging and pleading for help. What about the poor individual(s) who where selling the same quality non-motorsport authentic merchandise over the summer for a reasonable price just trying to make a living, did big bad motorsports authentics have a heart and go easy on them? No. So I say tough s&^&*t to you Motorsports Authentics hope you do go bankrupt!!!.
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» Confirm Abuse ReportAnonymous said:
Oct 7, 2009 at 2:09 PMMaybe Obama could bail them out too ...
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» Confirm Abuse Reportmidmichman said:
Oct 7, 2009 at 3:44 PMMaybe they can get a bailout.
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» Confirm Abuse Reportsnohio said:
Oct 7, 2009 at 3:55 PMI have a bad feeling that SMI is going to follow suit. It seems like they have put a lot of money out without seeing returns lately. Kentucky (lawsuit between former owners and NASCAR), Charlotte (tax lawsuit against the city and losing Lowes) and now this. It's going to be a tough year for SMI in 2010.
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» Confirm Abuse Reportzebsdad said:
Oct 7, 2009 at 4:00 PMGee, ain't that too bad!!!!
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» Confirm Abuse ReportPhoenix987 said:
Oct 7, 2009 at 4:10 PMHeh, sucks for them. Maybe if everything wasn't extremely overpriced they wouldn't be in this position.
Report as AbuseThe only thing that can save them would be if a bunch of the big names had sponsor changes and number changes. A fan will buy new collectibles of their favorite driver if it's not something they already have.
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» Confirm Abuse Reportbthompson133 said:
Oct 7, 2009 at 4:22 PMshould have had good drivers lol
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» Confirm Abuse Reportbthompson133 said:
Oct 7, 2009 at 4:24 PMwhy doesn't gm give them some of the ransom money lol
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» Confirm Abuse ReportWerner said:
Oct 7, 2009 at 4:27 PMMSP...they made 2900 Johnson 3X Champ cars and the demand is higher...they think JJ has only that many fans?...i sent them an email and they won't produce more...they want to make sure the collector value stays high...what do they care...sell the product...still haven't gotten one at...maybe they want bailout money....
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» Confirm Abuse ReportShort-Track said:
Oct 7, 2009 at 4:56 PMThey should try dropping some of their prices because $75.00 is way too much to be spending on a die-cast or $25 for hats,$30+ for t-shirts is also rediculous.As a collector of die-casts I am not paying 75 to 90 bones on a car just because of a one time paint scheme unless it has potential value or a meaning.I buy WINNERS CIRCLE 1:64's all the time because they're 5 bones a piece and they don't come out the package.I have a few 1:24's from MA but I only paid for one,the rest were gifts.
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» Confirm Abuse ReportHammer said:
Oct 7, 2009 at 6:04 PMExcuse me if I say "it serves the greedy bas----s right". They screwed the race fan who was already facing outrageous ticket prices and buying overpriced food at the tracks, not to mention the cost of hotel/motel rooms and gasoline etc; to get to the track.
Report as AbuseSorry, no sympathy here.
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» Confirm Abuse ReportHammer said:
Oct 7, 2009 at 6:08 PMServes the greedy Ba-----s right! Adios, these type of things are what makes the cost of being a race fan prohibitive!
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» Confirm Abuse Reportfanofreed43 said:
Oct 7, 2009 at 6:19 PMI think it's funny that most of Nascar's goods are made in China.
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» Confirm Abuse ReportMotorsportsPhotography said:
Oct 7, 2009 at 7:13 PMWerner, All you have to do is call me and I will get you any car you want at 42.50. That is what we pay for all the new arrivals.
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» Confirm Abuse Reportrairheart said:
Oct 7, 2009 at 8:10 PMI agree, collectable cars are too expensive! I currently have over three hundred cars. The only "COT" I have is Smoke's. It cost about $80.00 landed. I line the cars up by points and can't get a Ryan Newman Army car. The colors, drivers, sponsors change almost weekly! Made in China, these cars (1/24) should be $25-$30. Then they would sell and I believe make a profit.
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» Confirm Abuse Reportkeith308 said:
Oct 7, 2009 at 8:13 PMDiecast dealers have been telling MA for years to quit making so many diecast. They did not listen to the dealers the same way NASCAR did not listen to their TRUE fans. I hope they go under and someone buys them out. Obama, Stay away!!!
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» Confirm Abuse ReportMeg said:
Oct 7, 2009 at 8:21 PMhttp://www.amazon.com/gp/product/B0026P4SRS
Report as Abuse<p>Ryan Newman Army car </p>
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» Confirm Abuse Reportrmdunn3 said:
Oct 7, 2009 at 8:39 PMThey should have a 50% off sale, and at least make some money to pay for some of their debts.
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» Confirm Abuse ReportMotorsportsPhotography said:
Oct 7, 2009 at 9:16 PM#16, Its costs millions of dollars for MA to send those 30 tractor trailers down the road every week. They have to pay each team $1800. dollars a week to run them. The diesel fuel to get to every track. $125. to wash each of them every week. $5500. for rent at every track for each one of them. That is why prices are the way they are.
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» Confirm Abuse Reportmelanschool said:
Oct 7, 2009 at 10:00 PMSorry , but anyone can get Jr stuff at Dollar General and WalMart - why pay MA prices?
Report as AbuseIts the economy, count all the NASCAr dads who have lost their jobs, worried about paying the bills etc.
The credit crunch also cut off a lot of profits... VISA says your lmit is now $XXX instead of $XXXX or even cancels your account.
The disposable income, fun money has dried up. MA wont be the only business out of business in NASCAR before things pick back up.
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» Confirm Abuse ReportCCCANNON said:
Oct 8, 2009 at 6:05 AMIt would be nice to see the federal lawyers
Report as Abuseinvestigate MA for the obvious
anti-trust law violations.
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» Confirm Abuse ReportSS396Chevelle said:
Oct 8, 2009 at 11:51 AMIt's all made in China anyway for a hundredth of the price they sell it for.
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» Confirm Abuse ReportSS396Chevelle said:
Oct 8, 2009 at 2:41 PM#1 So you purchased 10 million pieces of apparel for $.10 each? You are the reason they are still in business? For someone who works for toyota, you seem to be wearing a lot of hats. The #8 hat for sure.
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» Confirm Abuse ReportMeg said:
Oct 8, 2009 at 3:42 PMPeople who have never been in business for themselves, have no idea how much overhead a company has. Not only salaries for all the workers in those trailers, but the drivers who haul the rigs and set them up, etc. Someone has to negotiate contracts with the teams/car owners of the merchandise they sell. What about bookkeeping and banking ? Then they have taxes on salaries, worker's compensation, unemployment taxes, federal unemployment taxes, insurances to protect them from people who want to sue because they can't make it in life, insurance premiums on the merchandise, rigs, trailers. Registration, fuel permits, tolls, tires, diesel fuel, etc for those rigs. Lodging for employees while out of town, etc etc.. My goodness we could sit here for hours and keep coming up with more expenses for this company. How about the merchandise they get stuck with when a driver has an injury or jumps to another team and breaks his contract with the car owner ? That's another ten cents down the drain.. LOL I'm kidding.. <u>Hey, they are in business to make money and if they aren't making money they aren't going to be in business...</u> Good luck to them..
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» Confirm Abuse ReportWerner said:
Oct 8, 2009 at 4:07 PMthey over produced for some drivers and totally ignored others...a friend of mine gave on the #8 cars, as he said "how many #8 Bud cars do you need"?...
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» Confirm Abuse ReportMotorsportsPhotography said:
Oct 8, 2009 at 4:41 PM#24, Hey idiot, I am one of MA's biggest wholesalers. Dream on.
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» Confirm Abuse ReportMeg said:
Oct 8, 2009 at 8:04 PMWerner said, "How many #8 Bud card do you need?".. <i>I'm betting he never collected Barbie Dolls ..</i> We just couldn't have too many of those.. * G *
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» Confirm Abuse ReportMeg said:
Oct 8, 2009 at 8:04 PM#8Bud cars, not CARD... Sorry about that...
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» Confirm Abuse Reportjdxenterprises said:
Oct 8, 2009 at 10:02 PMThanks MSP, you always make me smile at the end of the day!! And I like the pics you post!!
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» Confirm Abuse ReportSS396Chevelle said:
Oct 9, 2009 at 7:53 AM#27 If you pay $.10 for a $25.00 hat they should be out of business. What did you do buy a warehouse from Walmart to store 10 million pieces of Apparel.
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» Confirm Abuse ReportMotorsportsPhotography said:
Oct 9, 2009 at 11:28 AM#31, I am one of MA's biggest buyers and have been for years. I buy trailers loads from them every month. We are the ones keeping them in business. The Independents. You have no clue of what goes on in my world.
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