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  • ISC 3Q profits down, cut staff

    http://www.news-journalonline.com/bu...ning-belt.html

    International Speedway Corp. has cut more than 40 corporate positions -- all at its headquarters here -- since announcing in August a company-wide initiative to reduce operational costs.

    The company's goal of reducing by 20 percent the size of its headquarters staff, which numbered 250 at the start of the year, has been met, said Dan Houser, ISC chief financial officer, said in a phone interview Thursday.

    Whether there will be additional job cuts will depend on the state of the economy, Houser said, although he added there are no further plans for staff reductions at this time.

    The company, hit by declining revenue because of the slow economy, has also responded by lowering ticket prices at its racetracks and putting some of its big development projects on hold, including its proposed entertainment/retail/dining complex across the street from Daytona International Speedway.

    ISC quietly severed ties late last year with the Baltimore-based developer that was to be a 50/50 partner in the planned Daytona Live! complex.

    Despite those efforts, the company on Thursday reported a decline in both revenue and net earnings for its fiscal third quarter.

    For the three-month period that ended Aug. 31, ISC racked up $160.2 million in revenue and a net profit of $3.6 million. That's down from $172.9 million in revenue and a net profit of $4.4 million for the same period a year ago.

    Those declines would have been worse had they not been offset by scheduled increases in payments from its media partners for broadcast licensing rights, CEO Lesa France Kennedy said in a news release.

    The increase in revenue from its media partners comes despite an overall decline this year in television , acknowledged ISC President John Saunders, who added that NASCAR is positioning itself to capitalize on the evolving media landscape.

    Saunders said despite its declining revenue, ISC continues to maintain "a strong balance sheet."
    The corporate restructuring initiative announced two months ago "to create a leaner and more responsive organization" is expected to result in reducing ISC's operating expenses beginning next year by $20 million to $30 million, Kennedy said in a conference call with stock analysts Thursday.

    Houser added ISC has also sought to ensure its workforce reductions would not diminish in any way the experience for race fans attending NASCAR events. "Our effort is to keep our costs right-sized to our revenues ... but we can't do anything that reduces our (track) safety," he said.
    Notable staff departures since ISC's latest cost-cutting initiative was announced include Robin Braig, who resigned as president of the Daytona Speedway in August and Craig Rust, who resigned late last month as president of Chicagoland Speedway.

    ISC last month also announced its decision to not host the Indy Racing League events in 2011 that took place at four of its tracks this year. Kennedy, in a Securities and Exchange Commission filing, described the IndyCar events as "not profitable" for the company.

    In Thursday's conference call, Saunders described the national unemployment rate and consumer confidence as the "real wild cards" for ISC as attendance at NASCAR events is not likely to significantly pick up until the economy improves.

    Houser said one hopeful sign the economy may slowly be starting to turn around is the increase ISC has seen as of late in corporations expressing interest in becoming race sponsors.

    With interest rates at near all-time lows and the credit market starting to improve, the time may also be right for ISC to access capital markets once again, such as by issuing new bonds, he said.

    The company also is in talks with its lenders about extending its current $300 million revolving line of credit, which is set to mature in June 2011. ISC told the SEC it anticipates having a new revolving line of credit in place by no later than the end of its fiscal 2011 first quarter.

    ISC officials expressed optimism the company may be close to finally completing the proposed $88 million sale of its Staten Island, N.Y., property to KB Marine Holdings, an Addison, Texas-based port and logistics company.

    ISC acquired the 676-acre development site in 2005 with plans to build a racetrack there, but scrapped those plans in late 2006.

    The deadline for completing the sale to KB has been extended to Nov. 30. Houser, in the conference call, attributed the delay in selling the property to New York state's lengthy environmental regulatory process.

    ISC parted ways last year with the Cordish Cos., the Baltimore-based development company that was a partner in both the proposed Hollywood Casino project at the Kansas Speedway as well as the Daytona Live! complex across the street from DIS.

    The Hollywood Casino project in Kansas City broke ground this past April with ISC's new 50/50 partner, Penn National Gaming.

    Locally, ISC bought out Cordish's 50 percent stake in the eight-story International Motorsports Center office building at the Daytona Live! site upon completion of that building last November. The 200,000-square-foot office building is now the headquarters for both ISC, NASCAR and the Grand-American Road Racing Association.

    With Cordish now out of the picture, Houser said the proposed entertainment/retail/dining development along West International Speedway Boulevard will likely be given a new yet-to-be-determined name once a new development partner has been found.

    Houser said ISC remains committed to the idea of developing a destination-type attraction at the Daytona Live! site that can complement nearby DIS, which he described as the company's "marquee-asset."

    He added the new development partner would need to be a company that is willing to "put some skin into the game," in terms of taking on some of the financial risk in developing the mixed-use project.

  • #2
    What are your thoughts on the subject?

    Comment


    • #3
      Free fall. ISC and NASCAR are going to try a variety of things to stem the damage but the simple truth is they dramatically overexpanded and dramatically overestimated demand. Millions of people are walking away and nothing is going to stop that.

      The season is too long, the races too meaningless, the sport is too expensive for fans and for sponsors. There are too many tracks and too many seats. Too much capacity. ISC needs to close some venues, remove seats at others, cut the schedule and stop visiting tracks twice. They need to stop Cup drivers from racing in NNC, combine Trucks with NNC, stop paying ride buyers.

      That won't happen - there is too much at stake, too much invested. Instead they will limp along, losing support all the way, as they tinker with The Chase and get by on the TV money. When that contract runs out in 4 years, look out. Tumbleweeds will blow where there once were 150,000 fans. This is going to get ugly, real ugly, and it will reflect on the entire sport of auto racing for 20 or 30 years.

      Comment


      • #4
        How long did the season used to be compared to now? I can't recall there being less races, but never really paid close attention.

        I do wonder if ISC is going to drop ticket prices significantly to get the stands filled back up, more eyeballs equals more sponsor $$$. They need to do something to get the momentum going back up, otherwise the next tv contract will not be good as you say.

        While I hate to see any race series struggle, it would be nice if Nascar popularity dropped enough for Speed to stop showing 10 or so hours of pre-race crap every weekend.

        Comment


        • #5
          "While I hate to see any race series struggle, it would be nice if Nascar popularity dropped enough for Speed to stop showing 10 or so hours of pre-race crap every weekend."

          Don't watch...really a simply solution...

          Comment


          • #6
            Originally posted by Jim Wilke View Post
            Free fall. ISC and NASCAR are going to try a variety of things to stem the damage but the simple truth is they dramatically overexpanded and dramatically overestimated demand. Millions of people are walking away and nothing is going to stop that.

            The season is too long, the races too meaningless, the sport is too expensive for fans and for sponsors. There are too many tracks and too many seats. Too much capacity. ISC needs to close some venues, remove seats at others, cut the schedule and stop visiting tracks twice. They need to stop Cup drivers from racing in NNC, combine Trucks with NNC, stop paying ride buyers.

            That won't happen - there is too much at stake, too much invested. Instead they will limp along, losing support all the way, as they tinker with The Chase and get by on the TV money. When that contract runs out in 4 years, look out. Tumbleweeds will blow where there once were 150,000 fans. This is going to get ugly, real ugly, and it will reflect on the entire sport of auto racing for 20 or 30 years.
            Couldn't agree more - spot on. Bummer for the folks that are losing their jobs. But, there's a little bit of me that finds the arrogance of these people (ISC and NASCAR) humorous and am quietly enjoying watching the free fall.

            Comment


            • #7
              Originally posted by hdolan View Post
              "While I hate to see any race series struggle, it would be nice if Nascar popularity dropped enough for Speed to stop showing 10 or so hours of pre-race crap every weekend."

              Don't watch...really a simply solution...
              A trend that is growing steam.

              Comment


              • #8
                Originally posted by Jimmy_22 View Post
                Couldn't agree more - spot on. Bummer for the folks that are losing their jobs. But, there's a little bit of me that finds the arrogance of these people (ISC and NASCAR) humorous and am quietly enjoying watching the free fall.
                And let me guess...you think a NASCAR loss will be an Open Wheel gain...

                Comment


                • #9
                  Originally posted by Baulz View Post
                  How long did the season used to be compared to now? I can't recall there being less races, but never really paid close attention.
                  From up to 60 races in the 1950's to 28-32 or so races in the '70s/'80s/early '90s to the current 36 in the mid '90s. (not counting the non points events)

                  Comment


                  • #10
                    Originally posted by hdolan View Post
                    "While I hate to see any race series struggle, it would be nice if Nascar popularity dropped enough for Speed to stop showing 10 or so hours of pre-race crap every weekend."

                    Don't watch...really a simply solution...
                    I rarely bother to even look at Speed TV anymore, watched the ALMS race last weekend, can't remember the last time I watched anything else.

                    Comment


                    • #11
                      Originally posted by MoparsRule View Post
                      From up to 60 races in the 1950's to 28-32 or so races in the '70s/'80s/early '90s to the current 36 in the mid '90s. (not counting the non points events)

                      Thanks.

                      Comment


                      • #12
                        And obviously the near-60 race seasons weren't covered for 3 days each on SpeedTV.

                        Comment


                        • #13
                          Originally posted by Baulz View Post
                          How long did the season used to be compared to now? I can't recall there being less races, but never really paid close attention.
                          I _think_ it was 28 or 29 as recently as the late 90s. Then tracks were built in Chicago, Texas, Fontana, Kansas, Vegas, Homestead and Kentucky, all of them clamoring for 2 races a year. Here's some food for thought:

                          NFL season length- Begins September 9 and goes to January 2 with each team playing 16 games in the regular season.

                          MLB season length- Each team plays 162 games in the regular season with Spring Training programs starting as early as Feb/March and last season the World Series Champion was not crowned until November 4.

                          NASCAR season length- The NASCAR schedule includes 39 Sprint Cup races starting on February 6 and ending on November 21.

                          NHL season length- Each NHL team plays 82 games with the preseason starting in September and the regular season ending in April.

                          NBA season length- Each NBA team also plays 82 games from October to April.

                          Comment


                          • #14
                            Another point: In the 70s and 80s, it was very common for racers to only run selected events and not even worry about the title. This may have cost drivers like David Pearson a title or two as they only ran the big races while Richard Petty ran every weekend. I _think_ the last champ to not run all the races was Terry Labonte in 84. After that, RJR came on board and threw big money at the series and a lot of smaller races, including all the dirt tracks, no longer awarded 'those valuable Winston Cup points.'

                            Comment


                            • #15
                              "While I hate to see any race series struggle, it would be nice if Nascar popularity dropped enough for Speed to stop showing 10 or so hours of pre-race crap every weekend."

                              Don't watch...really a simply solution...
                              I think the poster's logic (certainly is mine) is that Speed might start showing some of the stuff that we like in the 'early years' again, like some actual races or stuff relating to other automotive/autosports interest. Maybe some Aussie or Euro Touring Cars...who knows maybe even some air racing.
                              BAN SHREDDED CHEESE! MAKE AMERICA GRATE AGAIN!

                              Comment

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