Speedway Motorsports Purchases Las Vegas Motor Speedway
15 December 1998
Speedway Motorsports Purchases Las Vegas Motor Speedway
LAS VEGAS, Dec. 14 -- Continuing its successful growth
strategy, Speedway Motorsports officials today formally announced
the purchase of Las Vegas Motor Speedway.
0. Bruton Smith, chairman of Speedway Motorsports, made the announcement
at the Las Vegas Convention Center during a news conference.
Closing on the property, which was purchased from majority owner Ralph
Englestad and his partners, occurred December 1.
Smith summarized the unique transaction, which includes a state-of-the-art
motorsports entertainment complex and substantial industrial and commercial
real estate.
"This acquisition is consistent with our business strategy of building or
purchasing facilities," said Smith. "It is a unique transaction with
approximately $150 million allocated to the speedway and an additional $65
million allocated to 1.4 million square feet of warehouse space and
approximately 300 acres of nearby real estate. We intend to sell these real
estate holdings in the next 12 months.
"This acquisition is a huge strategic transaction. It helps Speedway
Motorsports achieve a critical mass that will enhance our overall broadcast,
sponsorship and operating leverage. Las Vegas Motor Speedway has tremendous
potential and we feel we can achieve its true potential with our proven
operational strategies," he concluded.
Smith said the television broadcast fee for the Las Vegas 400 NASCAR
Winston Cup race is among the top five packages in motorsports. Currently,
ABC/ESPN is in the second year of a five-year television contract worth
approximately $35 million. This year's inaugural Las Vegas 400 received a 5.8
rating on ABC, the second highest (second only to the Daytona 500) rating on
the 1998 NASCAR Winston Cup schedule.
Las Vegas Motor Speedway opened in September 1996 as one of the most
expensive speedways ever built. According to the previous owners, the speedway
complex was built at a cost exceeding $230 million. The centerpiece of the
multi-purpose facility, situated on approximately 1,300 acres, is a lighted
1.5-mile superspeedway with approximately 107,000 seats, including 102 VIP
suites. The superspeedway hosts a NASCAR Winston Cup event in March, which
attracts more than 120,000 spectators. In addition, other major events include
an annual Indy Racing League, NASCAR Busch Series Grand National, Craftsman
Truck Series and Winston West events.
"After their debut this spring, the NASCAR drivers raved about this
facility and its racing surface," said Smith. "Las Vegas is known as a great
destination place for tourism and for its entertainment value. We plan to
capitalize on Las Vegas' assets to further grow the speedway, the sport of
NASCAR racing, other forms of motorsports and our company."
Featuring more than 20 different racing circuits, the facility also
includes a 1/2-mile clay oval, 3/8-mile paved oval, dragstrip, motorcross,
go-kart, Legends tracks and a 2.5-mile road course. The Pennzoil World of
Outlaws sprint car series, the United States Auto Club and more than 15
different types of driving schools utilize the smaller racing circuits.
Smith said evaluations of the staff and facility are currently underway
and any changes will be announced at a later date.
In addition Smith says he plans to talk to various sanctioning bodies,
including NASCAR, Indy Racing League and the National Hot Rod Association
(NHRA) in regards to enhancing the schedule of events at the speedway.
The acquisition adds more geographical diversity to the company's
portfolio of speedways. Another benefit of the purchase is it provides another
new venue for Finish Line Events, a wholly owned subsidiary of Speedway
Motorsports.
Speedway Motorsports is a leading marketer and promoter of motorsports
entertainment in the United States. SMI owns and operates Atlanta Motor
Speedway, Bristol Motor Speedway, Charlotte Motor Speedway, Las Vegas Motor
Speedway, Sears Point Raceway and Texas Motor Speedway. SMI also provides
event food, beverage and souvenir merchandising services through its Finish
Line Events subsidiary, and manufactures and distributes smaller-scale,
modified racing cars through its 600 Racing subsidiary.
This news release contains forward looking statements. Such statements
reflect current views and expectations and are subject to certain risks and
uncertainties, as set forth in the Company's periodic filings with the
Securities and Exchange Commission that could cause actual results or events
to differ materially from management's views and expectations.