NASCAR profits rise amid slow ticket sales
The 2008 season has provided a turnaround for NASCAR on the track and off. Competition with the new car has been balanced and predicting winners has been -- well, impossible for me so far. My last correct guess was Dale Earnhardt Jr. in one of the Duels at Daytona. I've whiffed every time ever since.
But the big news last week was the announced first quarter profits for the biggest corporations in the sport, International Speedway Corp.(controlled by NASCAR's founding France family and owners of Daytona, Michigan and other speedways), posted a modest $36.21 million net income, 1.1% higher than last year's first quarter figure. Meanwhile, earnings per share rose 6%.
So what does that mean in English for us regular people? In the first three months of this year NASCAR's business side generated almost $200 million. Admissions were up slightly to $56.11 million. Track side food, beverage and merchandise revenues increased more than 30 percent to $22.69 million.
Sales of Dale Earnhardt Jr. merchandise, that went into the tank last season after NASCAR's most popular driver announced he was leaving the team founded by his father, then that he also was leaving longtime sponsor Budweiser, have rebounded big time with fans buying merchandise with Earnhardt's new number and colors.
Motorsports Authentics -- the company that operates the big merchandise trailers at the race tracks -- made a profit for the first time since its founding in 2005. The company, owned 50/50 by International Speedway Corp. and Speedway Motorsports Corp (owners of Lowes, Bristol and other motor speedways), also made cuts this year, consolidating distribution centers and reducing its number of trailers from 51 to 27. Demand for Earnhardt's new gear accounted for half of all first quarter sales.
Not sounding much like a regular race fan, a written release from International Speedway Corp. President Lesa France Kennedy (the late Bill France Jr.'s daughter), tactfully pointed out the real problem on the horizon -- fans caught in the bad economy:
"We are closely monitoring the current macro-economic trends and their potential impact on consumer discretionary spending. Similar to what we experienced in other downturns, it appears consumers are making purchasing decisions closer to race day, which impacts advance ticket sales trends. During these challenging periods, it is important to reinvest in our events and facilities to ensure we offer fans a premium experience so that they will return year-after-year."
It's true that the company is spending millions on improvements at Michigan International Speedway during the off season, but the report also revealed NASCAR is guilty of the same tricks as other big corporations -- burying profits into expensive stock buy-backs. ISC has spent more than $130 million buying 2.8 million shares of it's own stock since last December. And the company has authorized spending another $119 million. The Detroit News