Speedway Motorsports to Proceed with Kentucky Speedway Acquisition
Speedway Motorsports, Inc. (NYSE:TRK) is proceeding with the purchase of Kentucky Speedway, company officials announced today.
In May 2008, Speedway Motorsports entered into an agreement to
acquire Kentucky Speedway from Kentucky Speedway LLC, pending a 90-day
period to conduct due diligence. The period expired Aug. 18, and the
company has decided to move forward with the acquisition, subject to
satisfaction of remaining closing conditions. The acquisition is expected to
close in the fourth quarter of this year, most likely in December.
"Moving forward on Kentucky Speedway allows our company to expand
its geographic reach into the motorsports hotbed of the Midwest," said O.
Bruton Smith, founder, chairman and chief executive officer of Speedway
"We are optimistic about being able to promote a Sprint Cup Series
event at Kentucky Speedway. Once we secure a Sprint Cup Series event, we
plan to expand seating capacity and host some of the largest crowds in the
Midwest," Smith added. "Kentucky Speedway entertained sellout crowds for
NASCAR Nationwide Series and IndyCar Series events this year. With a Sprint
Cup date, season ticket sales, seat licenses and corporate sponsorship
opportunities will increase tremendously."
NASCAR has stated it cannot allow realignment of an existing Sprint
Cup Series race date until the anti-trust litigation among NASCAR,
International Speedway Corporation and the current ownership of Kentucky
Speedway is resolved. Although the time frame for resolution is uncertain,
Speedway Motorsports will continue to work with NASCAR to schedule a Sprint
Cup Series date at the facility.
Speedway Motorsports also plans to use its proven business model to
maximize revenues and streamline expenses at existing Kentucky Speedway
events to offset an initial reduction in the company's earnings, which could
approximate $0.12 to $0.18 per share per year pending the scheduling of a
Sprint Cup Series event at Kentucky Speedway. The reduction in earnings
relates primarily to estimated interest, depreciation and general
Smith continued, "We are in this motorsports business for the long
term. The opportunity to buy a modern race track below replacement cost in
a market with incredible growth potential was simply too good to pass up.
While we expect some short-term loss, this is a significant investment in
the future that better positions us to compete in this industry, and will
pay off with long-term gains when the NASCAR Sprint Cup Series is added to
Kentucky Speedway's event calendar."
Located on 820 acres in Sparta, Kentucky, just south of Cincinnati,
Kentucky Speedway features a 1.5-mile tri-oval speedway, with chair-back
grandstand seating for 66,089 spectators, 50 luxury suites with seats for
approximately 2,000, private RV spaces, and reserved and unreserved camping
Kentucky Speedway will join an outstanding lineup of SMI
facilities. The company also owns and operates Atlanta Motor Speedway;
Bristol Motor Speedway in Bristol, TN.; Infineon Raceway in Sonoma, CA.; Las
Vegas Motor Speedway; Charlotte Motor Speedway in Concord, N.C.; New Hampshire
Motor Speedway, in Loudon, N.H.; and Texas Motor Speedway in Ft. Worth, TX.
About Speedway Motorsports, Inc.
Speedway Motorsports is a leading marketer and promoter of
motorsports entertainment in the United States. The Company owns and
operates the following premier facilities: Atlanta Motor Speedway, Bristol
Motor Speedway, Infineon Raceway, Las Vegas Motor Speedway, Lowe's Motor
Speedway, New Hampshire Motor Speedway and Texas Motor Speedway. The Company
provides souvenir merchandising services through its SMI Properties
subsidiaries; manufactures and distributes smaller-scale, modified racing
cars and parts through its 600 Racing subsidiary; and produces and
broadcasts syndicated motorsports programming to radio stations nationwide
through its Performance Racing Network subsidiary. The Company also
equally-owns Motorsports Authentics, a joint venture formed with
International Speedway Corporation to produce, market and sell licensed
motorsports merchandise. For more information, visit the Company's website
This news release contains forward-looking statements, particularly
statements with regard to the Company's future operations and financial
results. There are many factors that affect future events and trends of the
Company's business including, but not limited to, consumer and corporate
spending sentiment; air travel; governmental regulations; military actions;
national or local catastrophic events; the success of and weather
surrounding NASCAR, IRL, NHRA and other racing events; our relationship with
NASCAR and other sanctioning bodies; the success of expense reduction
efforts; capital projects; expansion; economic conditions; stock
repurchases; financing needs; insurance; litigation; taxes; oil and gas
activities and associated profitability; geopolitical situations in foreign
countries; and other factors outside of management control. These factors
and other factors, including those contained in the Company's Annual Report
on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, involve
certain risks and uncertainties that could cause actual results or events
to differ materially from management's views and expectations. Inclusion of
any information or statement in this news release does not necessarily imply
that such information or statement is material. The Company does not
undertake any obligation to release publicly revised or updated
forward-looking information, and such information included in this news
release is based on information currently available and may not be reliable
after this date.