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Sprint Cup
CUP: ISC Profits Increase As Number Of Seats Decrease
ISC is a publicly traded company with more than 71 percent of its stock owned by the NASCAR-controlling France family...
The 2013 Daytona 500 will be broadcast live on FOX. (Photo: Getty Images)
International Speedway Corp. saw an increase in profits in 2011 while also cutting seating capacity at nine of its 12 tracks that play host to Sprint Cup races.
ISC, a publicly traded company with more than 71 percent of its stock owned by the NASCAR-controlling France family, saw its stock remain in the $26 dollar range since the release of its annual financial report Thursday that listed a 4.5 percent increase in profits from core operations.
“We are pleased with the solid full-year financial results reported, highlighted by increased operating and net income,” ISC CEO Lesa France Kennedy said in a statement. “We accomplished these solid results ... in part from our disciplined focus on the cost-side of the business.
“We are also seeing positive results from our various consumer initiatives we have implemented.”
One of those consumer initiatives included the instillation of wider seats at most venues. Those seats, as well as banners covering some sections of seats, decreased capacity as part of a two-fold approach that also should increase demand for seats as they become less available.
“Adjusting sellable seating capacity at our major motorsports facilities that host NASCAR Sprint Cup Series events is another initiative designed to regain a more normalized advance ticket sales trend,” ISC stated in its annual report. “The reduction of sellable capacity, which is primarily achieved by providing improved and wider seating for our fans, is enhancing the overall guest experience.”
ISC began significantly decreasing the number of seats in 2010, when it cut capacity at several tracks. The most significant drop came at Phoenix, which saw its capacity shrink from 67,000 to 55,000.
Daytona remains ISC’s biggest track at 147,000 grandstand seats and has not seen a significant seat change in the last two years while the remainder of the Cup facilities have had a combined decrease of 15 percent.
Next is Talladega at 109,000 (down from 143,000 two years ago), followed by Richmond at 91,000 (down from 110,000 two years ago), Michigan at 84,000 (was 129,000), Auto Club (Calif.) Speedway at 84,000 (was 95,000), Kansas at 74,000 (was 80,000), Chicagoland at 69,000 (was 73,000), Darlington at 60,000 (was 61,000), Homestead at 57,000 (was 63,000), Martinsville at 55,000 (was 63,000) Phoenix at 55,000 and Watkins Glen at 33,000 (was 35,000).
ISC sold 83-87 percent of its capacity for Cup events, ISC President John Saunders said in a conference call Thursday with investors.
Overall ticket sales revenue, though, was down 10 percent from $160.5 million in 2010 to $144.4 million – and down 43 percent from $253.7 million four years earlier in 2007. Part of that reduction for 2011 can be attributed to its tracks not playing host to the four IndyCar Series events in 2011 that it held in 2010.
Compared to a year ago when advance ticket sales were down 14 percent, advance ticket sales are down just 5 percent this year and part of that is attributable to renewal periods starting later, ISC chief financial officer Dan Houser said.
Ticket prices will remain basically the same for 2012, after a drop of about 3 percent for Cup races for an average ticket price of $82.17.
“We do not believe that further broad-based reductions in ticket prices would drive demand,” Saunders said. “To drive ticket sales, we are laser focused on enhancing the live event experience for our guests. We are convinced that improving the fan experience will lead to increased ticket sales as well as pricing power over the longer term.”
While ISC took in $144.4 million in ticket sales, it took in much more from television rights.
Its broadcast revenues from the NASCAR television contract, where it took in $202 million in 2011, will rise 3.5 percent in 2012. But ISC will have a significant decrease in revenues from satellite radio rights. The new contracts signed to carry NASCAR and ISC’s Motor Racing Network programming are significantly less for 2012 than before because past contracts included bidding by Sirius Satellite Radio and XM. The two companies merged in 2008, and the rights fees have dropped when the contracts expired. In 2011, ISC reported the industry rights fees were $17 million and it took in approximately $8 million. For 2012, it reports that those fees are immaterial to its bottom line.
“You’ve seen the same thing with golf, with Major League Baseball, the NFL – everybody has taken a haircut on those rights fees [with SiriusXM] as they go into renegotiation,” Houser said. “We think for the long term, [and] NASCAR thinks, it’s an important distribution channel to have available for the fan base.”
While its overall profits increased 21.4 percent from 54.6 million in 2010 to $69.4 million in 2011, ISC reported that its profits from core operations – when not taking into account equity investments, tax settlements and write-downs of assets – rose 4.5 percent from $73.2 million to $76.5 million. To put that in perspective, it isn’t half of what ISC made in 2007 when it took in $160.7 million from core operations. ISC predicts for 2012 that those profits will range from staying about the same as they were for 2011 to decreasing 7 percent in 2012.
ISC saw its overall revenues decrease 2.4 percent from $645.4 million in 2010 to $629.7 million in 2011. More than 90.4 percent of its revenues came from NASCAR events, and ISC predicted that its overall revenues in 2012 won’t get better, that they will be between $610 million and $630 million.
“ISC remains a profitable and financially sound company,” Houser said. “We have a tremendous opportunity to see our company grow stronger as we successfully execute out strategic initiatives.
“As the consumer begins to feel better about their financial situation, we anticipate seeing an increase in their spending on discretionary items.”
In other notable items from the ISC annual report and earnings news release:
• ISC reported that it has more than 880 full-time employees. Last year, it reported it had more than 850.
• ISC has agreements in place for 67 percent of its sponsorship goal. It has not announced title sponsors for five Cup events and three Nationwide events. Last year at this time, it had five Cup races and four Nationwide races open.
• Plans for capital improvements at its tracks will run $80 million-$90 million in 2012.
• ISC will open its casino at Kansas Speedway on Feb. 3.
• ISC is carrying $313.8 million in long-term debt.
• Motorsports Authentics, which has transformed a merchandise production company to primarily an at-track retailer, lost $1 million in 2011 while it had made $2.8 million in 2010. ISC and rival track operator Speedway Motorsports Inc. own equal shares of the company.
SceneDaily.com • Crew chiefs preparing cars but anticipate more changes to Daytona rules
ISC, a publicly traded company with more than 71 percent of its stock owned by the NASCAR-controlling France family, saw its stock remain in the $26 dollar range since the release of its annual financial report Thursday that listed a 4.5 percent increase in profits from core operations.
“We are pleased with the solid full-year financial results reported, highlighted by increased operating and net income,” ISC CEO Lesa France Kennedy said in a statement. “We accomplished these solid results ... in part from our disciplined focus on the cost-side of the business.
“We are also seeing positive results from our various consumer initiatives we have implemented.”
One of those consumer initiatives included the instillation of wider seats at most venues. Those seats, as well as banners covering some sections of seats, decreased capacity as part of a two-fold approach that also should increase demand for seats as they become less available.
“Adjusting sellable seating capacity at our major motorsports facilities that host NASCAR Sprint Cup Series events is another initiative designed to regain a more normalized advance ticket sales trend,” ISC stated in its annual report. “The reduction of sellable capacity, which is primarily achieved by providing improved and wider seating for our fans, is enhancing the overall guest experience.”
ISC began significantly decreasing the number of seats in 2010, when it cut capacity at several tracks. The most significant drop came at Phoenix, which saw its capacity shrink from 67,000 to 55,000.
Daytona remains ISC’s biggest track at 147,000 grandstand seats and has not seen a significant seat change in the last two years while the remainder of the Cup facilities have had a combined decrease of 15 percent.
Next is Talladega at 109,000 (down from 143,000 two years ago), followed by Richmond at 91,000 (down from 110,000 two years ago), Michigan at 84,000 (was 129,000), Auto Club (Calif.) Speedway at 84,000 (was 95,000), Kansas at 74,000 (was 80,000), Chicagoland at 69,000 (was 73,000), Darlington at 60,000 (was 61,000), Homestead at 57,000 (was 63,000), Martinsville at 55,000 (was 63,000) Phoenix at 55,000 and Watkins Glen at 33,000 (was 35,000).
ISC sold 83-87 percent of its capacity for Cup events, ISC President John Saunders said in a conference call Thursday with investors.
Overall ticket sales revenue, though, was down 10 percent from $160.5 million in 2010 to $144.4 million – and down 43 percent from $253.7 million four years earlier in 2007. Part of that reduction for 2011 can be attributed to its tracks not playing host to the four IndyCar Series events in 2011 that it held in 2010.
Compared to a year ago when advance ticket sales were down 14 percent, advance ticket sales are down just 5 percent this year and part of that is attributable to renewal periods starting later, ISC chief financial officer Dan Houser said.
Ticket prices will remain basically the same for 2012, after a drop of about 3 percent for Cup races for an average ticket price of $82.17.
“We do not believe that further broad-based reductions in ticket prices would drive demand,” Saunders said. “To drive ticket sales, we are laser focused on enhancing the live event experience for our guests. We are convinced that improving the fan experience will lead to increased ticket sales as well as pricing power over the longer term.”
While ISC took in $144.4 million in ticket sales, it took in much more from television rights.
Its broadcast revenues from the NASCAR television contract, where it took in $202 million in 2011, will rise 3.5 percent in 2012. But ISC will have a significant decrease in revenues from satellite radio rights. The new contracts signed to carry NASCAR and ISC’s Motor Racing Network programming are significantly less for 2012 than before because past contracts included bidding by Sirius Satellite Radio and XM. The two companies merged in 2008, and the rights fees have dropped when the contracts expired. In 2011, ISC reported the industry rights fees were $17 million and it took in approximately $8 million. For 2012, it reports that those fees are immaterial to its bottom line.
“You’ve seen the same thing with golf, with Major League Baseball, the NFL – everybody has taken a haircut on those rights fees [with SiriusXM] as they go into renegotiation,” Houser said. “We think for the long term, [and] NASCAR thinks, it’s an important distribution channel to have available for the fan base.”
While its overall profits increased 21.4 percent from 54.6 million in 2010 to $69.4 million in 2011, ISC reported that its profits from core operations – when not taking into account equity investments, tax settlements and write-downs of assets – rose 4.5 percent from $73.2 million to $76.5 million. To put that in perspective, it isn’t half of what ISC made in 2007 when it took in $160.7 million from core operations. ISC predicts for 2012 that those profits will range from staying about the same as they were for 2011 to decreasing 7 percent in 2012.
ISC saw its overall revenues decrease 2.4 percent from $645.4 million in 2010 to $629.7 million in 2011. More than 90.4 percent of its revenues came from NASCAR events, and ISC predicted that its overall revenues in 2012 won’t get better, that they will be between $610 million and $630 million.
“ISC remains a profitable and financially sound company,” Houser said. “We have a tremendous opportunity to see our company grow stronger as we successfully execute out strategic initiatives.
“As the consumer begins to feel better about their financial situation, we anticipate seeing an increase in their spending on discretionary items.”
In other notable items from the ISC annual report and earnings news release:
• ISC reported that it has more than 880 full-time employees. Last year, it reported it had more than 850.
• ISC has agreements in place for 67 percent of its sponsorship goal. It has not announced title sponsors for five Cup events and three Nationwide events. Last year at this time, it had five Cup races and four Nationwide races open.
• Plans for capital improvements at its tracks will run $80 million-$90 million in 2012.
• ISC will open its casino at Kansas Speedway on Feb. 3.
• ISC is carrying $313.8 million in long-term debt.
• Motorsports Authentics, which has transformed a merchandise production company to primarily an at-track retailer, lost $1 million in 2011 while it had made $2.8 million in 2010. ISC and rival track operator Speedway Motorsports Inc. own equal shares of the company.
SceneDaily.com • Crew chiefs preparing cars but anticipate more changes to Daytona rules
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