SMI 'will consider all options' to obtain a Cup date for Kentucky
Bruton Smith is the chairman of Speedway Motorsports Inc. // Andy Lyons, Getty Images for NASCAR
Speedway Motorsports Inc. has requested that a Sprint Cup race be moved to Kentucky Speedway and “will consider all options” to get one there as soon as possible, according to its annual report filed Friday with the U.S. Securities and Exchange Commission.
SMI bought the track in Sparta, Ky., last year for $78.3 million, including $63.3 million in assumption of debt, and wants to realign a Cup date to the 1.5-mile oval. But NASCAR Chairman Brian France has stated that the sanctioning body will not consider realignment as long as an antitrust lawsuit filed by the track's founders remains unresolved.
SMI Chairman Bruton Smith said March 6 at Atlanta Motor Speedway that he had not yet requested the realignment but wanted a Cup date there in 2010.
“The Company has requested realignment of a Sprint Cup Series race at the earliest possible time and will consider all options if NASCAR denies such realignment request,” the company stated in its filing.
It does not elaborate whether “all options” would include legal action. SMI spokesman Scott Cooper said he could not elaborate on the wording in the annual report.
If SMI sued NASCAR over the date, the settlement signed in 2004 in a case with Texas Motor Speedway shareholder Francis Ferko could come into play. According to the settlement agreement, SMI agrees not to sue NASCAR over “allegations or assertions with respect to the awarding and/or sanctioning of races” but SMI does have the right to sue on issues “different in nature or scope from the current practices” that have occurred since that settlement.
The Kentucky Speedway founders are suing NASCAR and International Speedway Corp., alleging that they conspire to keep independent tracks from obtaining Sprint Cup dates. NASCAR, a privately held sanctioning body owned by the France family, and ISC, a publicly traded track-operating company whose majority of voting stock is owned by the France family, deny those claims. SMI is considered a co-conspirator in the case.
The case is in U.S. Appeals Court in Cincinnati with the Kentucky Speedway founders appealing a U.S. District Court judge's ruling that there is not enough evidence to have a trial. The earliest a hearing could be held in the case is April 20, and NASCAR typically begins its sanctioning process for the upcoming year in May. A decision from the appeals court could come anywhere from a few weeks to a few months following the hearing, which has not yet been scheduled.
“We are unable to predict whether the KS litigation will be decided in favor of KS, and, until a Sprint Cup Series race is held at KS, we are likely to incur cash and non-cash operating losses that negatively impact our future financial condition, operating results and cash flows,” the company states in its filing.
SMI is looking at getting the track, which currently has 69,000 seats, ready for a Sprint Cup event.
“Depending on the amounts and limits of passed tax incentives, the Company is contemplating expanding permanent seating at KS by 50,000, significantly modernizing and expanding concessions, camping, restrooms and other speedway facilities, and reconfiguring and expanding on-site roads, available parking, traffic patterns and entrances,” the company wrote. “The contemplated expansion and improvements may involve material capital expenditures over several years in amounts that have not yet been determined.”
Adding 50,000 seats would give SMI six tracks with more than 100,000 permanent seats, according to the annual report. Currently, Texas and Bristol have 158,000 apiece, followed by Lowe’s Motor Speedway near Charlotte (156,000), Las Vegas (131,000) and Atlanta (101,000). New Hampshire has 96,000 and the Infineon road course has 47,000.
The Charlotte track dropped from 162,000 to 156,000 following a grandstand renovation project last year, and SMI plans to remove approximately 10,000 more seats this year to create high-end recreational vehicle areas.
A similar project at Texas Motor Speedway will eliminate approximately 22,000 seats.
Other items in the SMI annual report:
• SMI earned 83 percent of its total revenues from NASCAR-sanctioned events. Last year it was 82 percent. Of its revenues, approximately 28 percent came from NASCAR’s television package.
• SMI has 828 full-time and 286 part-time employees. Last year, the company reported 770 full-time and 214 part-time employees, but that was prior to the purchases of New Hampshire Motor Speedway and Kentucky Speedway.
• Smith owns approximately 68 percent of the voting stock in the company, compared to 67 percent a year ago.
• SMI’s long-term debt is $686.5 million, down from $728.5 million reported last year.
