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NASCAR solidifies its hold on stock car racing with purchase of 12 racetracks

Published in blog.hemmings.com

The 1984 Winston 500 at Talladega. Photo by Racing Photo Archives/Getty Images, courtesy NASCAR.

According to the Associated Press, NASCAR announced a $2 billion merger agreement with International Speedway Corporation (ISC) on Wednesday, May 22.

The deal is expected to close by the end of 2019. ISC is a leading promoter of motorsports activities, currently booking more than 100 racing events annually as well as numerous other related activities. ISC also owns and/or operates 13 of the nation’s major motorsports entertainment facilities.

NASCAR, which already owned 35-percent of ISC’s stock, began acquiring the remaining outstanding public stock in International Speedway Corporation late last year, which owns a majority of the NASCAR-sanctioned tracks. The announced transaction will allow NASCAR to purchase all outstanding shares from the ISC.

International Speedway Corp owns 12 tracks that host NASCAR races, including Auto Club Speedway, Chicagoland Speedway, Darlington Raceway, Daytona International Speedway, Homestead-Miami Speedway, ISM Raceway, Kansas Speedway, Martinsville Speedway, Michigan International Speedway, Richmond Raceway, Talladega Superspeedway, and Watkins Glen International.

The agreement would give NASCAR control over those dozen tracks, along with Iowa Speedway, which it already owns.

It is one of two major facilities companies that host NASCAR races, along with Speedway Motorsports Incorporated.

The merger would seemingly make it easier for NASCAR to alter its racing schedule, making it easier to move dates from one track to another and includes the possibility of fewer events for tracks that host multiple races each year. The current season scheduling agreements with all tracks expires at the end of the 2020 season.

NASCAR President Steve Phelps has made it clear that the 36-race schedule in the top-tier Cup Series, generally considered too taxing for teams and fans, is among the areas the sanctioning body is looking to change.

“We are pleased with the progress that the negotiation and execution of the merger agreement between NASCAR and ISC represents,” NASCAR said in a statement. “While important regulatory and shareholder approval processes remain, we look forward to the successful final resolution of this matter and continuing our work to grow this sport and deliver great racing experiences for our fans everywhere. With a strong vision for the future, the France family’s commitment to NASCAR and the larger motorsports industry has never been greater.”

NASCAR Chairman Jim France had already spoken to NASCAR competitors before the start of the Daytona 500 in February and stated that “this sport was built by families and we’re just a part of it. It’s so important that we remember that this is still a family business. Our family is committed to it.”

Additional advantages for NASCAR:

  1. Because NASCAR is private, it won’t have to publicly report attendance revenue and other financials as ISC had to do as a publicly traded company. The merger also would allow NASCAR to make decisions regarding tracks without worrying about quarterly financial disclosures that could impact stock price.
  2. Revenue under the current television network contract calls for a roughly 50/50 split between NASCAR and the host track each week. Under NASCAR’s ownership umbrella, a majority of the television revenues will stay in NASCAR’s pocket when one of their tracks is hosting the event.
  3. ISC also announced that a class-action lawsuit that had been filed against it after NASCAR and ISC announced last November plans to merge will be dropped.
  4. ISC owns/owned MRN Motor Racing Network,  which covers many of the races and drives the discussion during the week and in the offseason on the SiriusXM channel 90 radio network through their programming. This gives NASCAR control of a lot of the media covering their sport.

The rest of the non-ISC tracks are owned privately or owned by Speedway Motorsports Inc., which owns eight tracks including Charlotte Motor Speedway, Las Vegas Motor Speedway, and Texas Motor Speedway. SMI announced April 24 that Sonic Financial Corp was attempting to acquire all outstanding shares of SMI common stock other than those they already held. Bruton Smith and his family own and control Sonic Financial Corp. and Smith is the founder and majority stakeholder in Speedway Motorsports Inc., so this also represents a circling of the wagons in the family business, so to speak. Perhaps a prelude to a future purchase by NASCAR, giving the corporation virtual autonomy in the major sports venue, as was the case with the France family when the sport was first begun in the late 1940s.

The only tracks not owned by ISC or SMI that host Cup races are Pocono Raceway, Dover International Speedway, and Indianapolis Motor Speedway.

Current ISC shareholders will receive $45 for each share under the merger agreement. Stocks closed up 2.25% on Wednesday after the announcement at $45.10 per share with a 52-week range between $35.00 and $50.00.