As revenues drop, speedway hopes to attract younger fans
The numbers don’t lie. Speedway Motorsports Inc., parent company of Las Vegas Motor Speedway, has watched revenues, including ticket sales, drop annually for five years.
Race event-related revenue at Speedway Motorsports’ eight NASCAR tracks also has dropped each year for the past five years except 2011.
The venues staging NASCAR races are in markets including Las Vegas, Atlanta, San Francisco, Dallas and Charlotte, N.C.
For the first quarter of this
year, Concord, N.C.-based Speedway Motorsports continued to show sluggish revenue results.
Total revenues for the first three months of this year were $84.2 million, compared with $84.8 million for the same three-month period last year.
At the Speedway Motorsports tracks, admissions revenues dropped from $188 million in 2008 to $116 million last year. Event-related revenue also dropped, falling from $211 million in 2008 to $151 million last year.
Total Speedway Motorsports’ annual revenues have plummeted from nearly $611 million in 2008 to $490 million last year.
The one revenue category that saw an uptick was in NASCAR broadcasting rights revenue, which increased from $168 million in 2008 to $192 million last year.
That’s because an eight-year NASCAR broadcasting rights deal provides annual 3 percent increases through 2014, so Speedway Motorsports expects $199 million this year.
At Speedway Motorsports’ eight NASCAR tracks, total permanent seating is about 900,000, with 832 luxury suites. Las Vegas Motor Speedway has 123,000 seats and 102 suites, and sits on 1,030 acres.
Bruton Smith, Speedway Motorsports chief executive who visited Las Vegas Motor Speedway in March for a NASCAR event, could not be reached for comment Tuesday.
But Speedway Motorsports officials explained the revenue downturn in documents filed with the Securities and Exchange Commission and in other statements.
“Our results for the 2012 race season reflect decreases in admissions, ancillary broadcasting rights, naming rights and other event related revenue categories,” according to the 2012 annual report.
“Management believes many of our revenue categories continue to be nega- tively impacted by declines in consumer and corporate spending from the recession, including high unemployment, high fuel, food and health-care costs, difficult housing markets and other economic factors,” the document said.
When the 2013 first-quarter results were released, Marcus G. Smith, Speedway Motorsports chief operating officer and president, said, “SMI’s first-quarter results, while within our expectations, continue to reflect the ongoing difficult economic conditions.”
Company officials recognize they need to reach out to younger race fans to reverse the declining revenues and ticket sales.
“While those long-time fans are more important to us than ever, we recognize the importance of capturing the next generation of race fans as the average age of the general population and our traditional fan base increases,” according to the annual report.
“We believe that a portion of the decline in attendance over the past few years can be attributed to that changing demographic. We are, therefore, increasingly investing in new marketing approaches and leading-edge technology to foster attendance by families, particularly those with younger children and teenagers,” the document said.
“We are investing in social media advertising, web-based applications and interactive digital systems to enhance pre-race and during-the-race entertainment experiences that appeal to our younger demographic markets. We are offering and expanding our familyfriendly and first-time fan programs to help educate and engage patrons who are new to the sport.”
Speedway Motorsports has discovered that many fans are buying tickets closer to race dates, so the company has increased promotional campaigns to motivate fans to buy tickets earlier and renew season ticket deals.
Shares of Speedway Motorsports were unchanged Tuesday at $17.55.