Is NASCAR losing its punch? Consider Speedway Motorsports
Speedway makes most of its money from selling revenues to racing events, primarily NASCAR-sanctioned races. While attendance at those sponsored events was up, it was not enough to offset the overall decline experienced at all the events Speedway hosts. Admissions were off by 1%, though weather and higher fuel prices were identified as the primary culprits.
Growth for the year rang in at 4.2%, an improvement over Q4's 2.8% drop in revenue to $148.2 million. Revenue from Speedway's second-largest revenue segment, NASCAR Broadcasting, saw a 15.4% increase in revenue over last year. But before taking a celebration lap, Speedway has to deal with a recent agreement that may hinder its revenue. The company renegotiated its NASCAR broadcasting contract, and that undoubtedly explains why the company's guidance for the coming year was flat.
Domestic broadcast rights to the Nextel and Busch series events was extended to eight years through the 2014 racing season and is valued at $4.5 billion. Industry rights to the revenue, however, were lowered 12% to about $505 million annually -- affecting Speedway and others in the industry, such as competitor International Speedway
One bright spot was the increase of corporate sponsorship of events, which saw a 10.9% increase for the year. Unfortunately, this segment is just a small part of the business, at 10.4% of total revenue, or $59 million. However, companies are beginning to realize just how popular NASCAR is. Lowe's
So to answer that opening question, NASCAR is still wildly popular, and its fans are diehard enthusiasts. However, it might just be that the sport's popularity has peaked. NASCAR itself says that crowds at some races decreased by a third last year, fewer than half of the Cup races were sold out, and TV audiences were down during most of the races telecast, according to USA Today.
More than likely, those attendance numbers are behind the renegotiated broadcast-rights deal and may better explain Speedway's decreased admissions take. As the smaller of the two publicly traded track operators, Speedway Motorsports gets a yellow flag from this Fool.
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