The sports industry continues\nto feel the impact of the extended shutdown. \nAs the most leagues have returned to action, led by motorsports, their\nfinancial foundations are being assessed.<\/p>\n\n\n\n
The outbreak of the coronavirus\nand related government containment measures created uncertainty for the sports\nand entertainment sectors. As the recent\nfinancial metrics are being calculated, material changes to the revenue and\ncost profiles have occurred. The\noperating scenarios will continue to evolve as economic activity returns and\nrestrictions begin to lift.<\/p>\n\n\n\n
The discretionary nature of\nspending for personal and business entertainment has come under intense\npressure. Along with the fact that most events are allowing limited capacity,\nmany consumers are not ready to return until a vaccine is readily available.\nTicket renewals and sponsorship agreements are paused.<\/p>\n\n\n\n
The grassroots component of\nmotorsports has been a quiet surprise. \nThe number of races and car counts have been trending positively at\nlocal short tracks and drag strips. Parts manufacturers and warehouse\ndistributors are shipping larger quantities of product after as slow start of\nthe season. <\/p>\n\n\n\n
Independent rating agencies\nsuch as Fitch, Moody\u2019s and Standard & Poor\u2019s established a set of\nquantitative and qualitative measures that evaluate an entities financial\nstanding. The goal is to assist participants such as banks or investors in\nunderstanding the risk of investing in sports.<\/p>\n\n\n\n
Professional sports are a\nunique asset class. There are considered prestigious due to their scarcity,\nhigh barrier to entry, exclusivity to operate, and the leagues vested interest\nto protect their teams.<\/p>\n\n\n\n
Top-tier professional\nmotorsports contains these characteristics. \nNascar\u2019s schedule has primarily three facility operators. The Charter\nSystem outlines the team ownership structure and specifies race cars and prize structure.\n<\/p>\n\n\n\n
Typically, sports leagues and\nsport franchise debt are secured by national television contracts, ticket\nsales, luxury suites, sponsorship agreements, concessions, and related revenue.<\/p>\n\n\n\n
The merger and going private\ntransactions of NASCAR \/ International Speedway Corporation and Speedway\nMotorsports in November 2019 came under recent review by rating agencies. <\/p>\n\n\n\n
Specifically, Nascar Holdings,\nLLC has a $1.4 billion term loan and Speedway Motorsports, $300.0 million in\nsenior notes. <\/p>\n\n\n\n
The shutdown limited the\nability of track operators to host live events with spectators in\nattendance. Although the current season\nwill run in its entirety, profit and cash flow will decline substantially as a\nresult in lost attendance related revenue.<\/p>\n\n\n\n
The possibility of an outbreak\nat the track may dampen the already challenged consumer demand and sentiment.<\/p>\n\n\n\n
The contractual nature of the\nNascar broadcast agreement will offset the decreased revenue in other\nareas. The current contracts expire in\n2024 and total almost $850.0 million per year.<\/p>\n\n\n\n
A conservative fiscal policy by\nthe France and Smith families underlies their operating philosophy. Capital expenditures at the track will be\nreduced and real estate development opportunities will be explored. <\/p>\n\n\n\n
Team owners and manufacturers\nworked on controlling costs in the shop and at the track.<\/p>\n\n\n\n
Motorsports has done an\nadmirable job in responding to crisis. \nIt laid out a plan to respond, recover and thrive. It emphasized the health and safety of its\ncommunity, worked with its partners, and engaged with its fans. Taking the green flag and racing towards the\ncheckered is the goal. <\/p>\n","protected":false},"excerpt":{"rendered":"
The sports industry continues to feel the impact of the extended shutdown. As the most leagues have returned to action, led by motorsports, their financial foundations are being assessed. The outbreak of the coronavirus and related government containment measures created uncertainty for the sports and entertainment sectors. As the recent financial metrics are being calculated, […]<\/p>\n","protected":false},"author":5,"featured_media":822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/821"}],"collection":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=821"}],"version-history":[{"count":1,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/821\/revisions"}],"predecessor-version":[{"id":823,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/821\/revisions\/823"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/media\/822"}],"wp:attachment":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=821"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}