Speedway Motorsports revenues drop nearly 10 percent in 2009; ticket revenue down 13 percent

By Bob Pockrass

Wednesday, March 10, 2010

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Speedway Motorsports Inc.’s overall revenue declined by 9.9 percent in 2009, including a 13.3 percent drop in ticket revenue, according to a filing with the U.S. Securities and Exchange Commission.

Speedway Motorsports Inc, finished 2009 with a balance sheet showing a $10.3 million loss, while its income from continuing operations was $74.9 million, down 28.2 percent from $104.3 million in 2008, according to the filing.

Part of the difference comes from a $74.5 million devaluation of Motorsports Authentics, the struggling merchandise company that SMI co-owns with rival International Speedway Corp. Both companies now consider Motorsports Authentics to have no carrying value.

SMI has 12 Cup races at seven tracks – Atlanta, Bristol, Charlotte, Infineon Raceway, Las Vegas, New Hampshire and Texas – and also owns Kentucky Speedway.

For 2009, overall revenues dropped from $611 million to $550.5 million. Admissions revenue dropped from $188 million to $163.1 million. Event-related revenues (sponsorships, concessions, merchandise, etc.) dropped 15.5 percent, from $211.6 million to $178.8 million, and broadcast revenue increased 3.3 percent, from $168.2 million to $173.8 million.

SMI’s 2010 forecast is for the economic struggles to continue as it projects overall revenues to drop to $500-$533 million and for its diluted earnings per share from continuing operations to be $1.00-$1.40 after it was $1.66 in 2009 and $2.40 in 2010.

While SMI has only one Cup race sponsorship left to be sold (the Atlanta race on Labor Day), company officials said they expect corporate spending, as well as admissions revenue, to be down in 2010.

“After a likely challenging fiscal 2010, we believe SMI’s longer-term outlook is strong,” said SMI President Marcus Smith. “Many of our NASCAR Sprint Cup, Nationwide and Camping World Truck event sponsorships for 2010 and beyond are already sold, and SMI has significant multiyear contracted revenue and cash flow streams, including NASCAR broadcasting, corporate marketing arrangements and other long-term committed uses of our speedway facilities.”

SMI stock dropped 6.15 percent on Wednesday from $16.10 to $15.11.