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Upon Further Review: Where will a second Vegas race come from for SMI?

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After years of teasing, pleading and politicking, Las Vegas Motor Speedway is on its way to hosting a second NASCAR Cup race in 2018.

Las Vegas Motor Speedway has scheduled a press conference for 5:30 p.m. ET Wednesday to make a “special announcement.’’ The press conference will be held 30 minutes after the board of directors of the Las Vegas Convention and Visitors Authority meets to approve a sponsorship agreement that would pay the track $2.5 million a year for seven years to promote two Cup races at Las Vegas Motor Speedway.

This isn’t the first time the Las Vegas Convention and Visitors Authority, funded by a hotel room tax, has sought to be involved in a second Cup race at Las Vegas. The Las Vegas Review-Journal reported in 2010 that the Convention and Visitors Authority was offering between $5-$8 million then to help land a second Cup date.

The track has hosted one Cup race a year since 1998, but Bruton Smith, founder and executive chairman of Speedway Motorsports, Inc., which owns the track, has exhorted NASCAR for years for a second date at Las Vegas and to host the season finale. He’s also used the threat of moving a race date from one of his tracks to Las Vegas to leverage local governments for better deals.

Marcus Smith, chief executive officer and president of SMI, told reporters Sunday at Atlanta that he’s heartened by the interest in Las Vegas for a second Cup date.

“We love the support we get out of Las Vegas,” Smith said. “I think the fans love it. It’s a great track for us. When we see that the community is supportive of racing there, it’s definitely encouraging to us.”

What’s encouraging is the potential financial windfall. The Las Vegas Convention and Visitors Authority states the 2016 Cup race drew more than 114,000 fans with about 96,000 coming from out of town. That generated $138 million in economic impact for the community.

OK, if Las Vegas gets a second date, where is it coming from?

Don’t expect the NASCAR schedule to add a race. That means a track will have to lose a date.

SMI likely will move a date from one of its tracks to Las Vegas instead of purchasing a race date.

SMI’s most recent track purchase was in 2008 when it bought Kentucky Speedway for $78.3 million. SMI paid $15 million in cash and assumed $63.3 million debt. That was for a track that didn’t have a Cup date.

The only candidates to purchase a race date from would be Indianapolis, Pocono and Dover. None has given any indication of selling. The other Cup race dates are owned by International Speedway Corp.

With this just the third year of a 10-year TV contract, no track should look to sell.

Dover’s annual report states it received $30.9 million in broadcasting revenue for its two Cup, two Xfinity and one Truck race in 2016. That means it received about $14 million per Cup race in broadcasting revenues, which increase about 3 percent annually, before paying its purse. Tracks keep 65 percent of the TV money paid (25 percent goes to teams and 10 percent to NASCAR). With seven years left on the TV contract, that would equate to about $80 million in broadcasting revenue for one Cup event after purse payments. SMI isn’t likely to pay that when it can move a date from one of its tracks.

Also, Matthew Brooks, a securities analyst for Macquarie Securities says that if SMI wanted to purchase a race date or track, International Speedway Corp., would likely outbid it.

“If (SMI) was able to do a deal to get a track or date from someone else, I think, with a much better balance sheet, (ISC) would come in there and say, ‘I’ll give you $10 million more or some number … and I’ll take it,’ ’’ Brooks told NBC Sports. “(ISC) is in a much better position to outbid (SMI) because they have a balance sheet that is net cash, their cash is bigger than their debt.’’

Macquarie Securities also downgraded SMI’s stock on March 3 from neutral to underperform. Brooks said Macquarie Securities values SMI’s stock at about $16 a share. SMI’s stock was priced at $19.17 a share after Tuesday’s trading (ISC’s stock was valued at $35.88 a share at the end of Tuesday).

Brooks cited the declining admissions revenue as a reason for the stock downgrade. SMI reported that admission revenue declined 10 percent in 2016 but noted in a conference call with investor analysts March 1 that eight of its 13 Cup weekends were negatively impacted by weather.

“You can’t have drops that big constantly just because of rain or whatever,’’ Brooks said. “It just signals something wrong with the business.’’

If purchasing a race date isn’t likely, that leaves moving a date from a track SMI owns.

SMI won’t take a date away from Texas (being repaved and major TV market), Sonoma (diversity in schedule with road course), Kentucky (repaved last year and additional layer of asphalt added since) and Bristol (has invested much into facility). That leaves Atlanta, Charlotte and New Hampshire.

Provided SMI goes through with repaving Atlanta — a decision is expected this week — it won’t spend millions on such a project and then abandon the facility.

That leaves Charlotte and New Hampshire.

The Coca-Cola 600 isn’t going off its Memorial Day weekend spot at Charlotte. That leaves the fall race. That is expected to feature parts of the oval and infield road course in 2018, giving the playoffs its only road course. SMI will complete upgrades and construction to the road course this year.

With the work being put into road course, that date isn’t moving.

The only option would be the All-Star Race, but that’s a midyear event and who wants to be outdoors in Las Vegas then? The average high in May is 89 degrees. The average high there from June to August is above 98 degrees.

That leaves New Hampshire.

New Hampshire Motor Speedway had its July Cup race run without a sponsor last year and has yet to announce a sponsor for either Cup race this year. 

Marcus Smith mentioned in the call with investor analysts March 1 that SMI plans to “repurpose” seating areas at Charlotte, Kentucky and New Hampshire in the first quarter of this year. An SMI spokesperson told NBC Sports that overall capacities for each track won’t change, but details on such fan enhancements will come at a later date.

New Hampshire Motor Speedway has one of the smaller seating capacities of the SMI tracks. Sonoma (47,000), Atlanta (70,000) and Charlotte (86,000) have smaller capacities than New Hampshire (89,000), according to SMI’s 2015 annual report.

Even with that capacity, swaths of empty seats have been prevalent in recent years at New Hampshire. While the Las Vegas Convention and Visitors Authority is investing in Las Vegas Motor Speedway, such investment is not as readily available for New Hampshire Motor Speedway. Bruton Smith also has wanted the state to widen the highway that leads to the track for years.

The bottom line is that it will come down to money. There is money in Las Vegas for a second Cup date. If there is more there than at another track, then it is time for SMI to make a change and put another Cup race in the desert.

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NASCAR America: NASCAR’s stars hit the track for the ‘Little 600’ (video)

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Like more than three dozen of his NASCAR Cup counterparts, Joey Logano is gearing up for the longest race of the year, Sunday’s Coca-Cola 600 at Charlotte Motor Speedway.

To warm up, Logano, NASCAR Xfinity Series driver Darrell Wallace Jr. and other NASCAR drivers headed to the GoPro Motorplex in North Carolina for the “Little 600.”

Check out how they fared in the above video that was on Thursday’s edition of NASCAR America.

 

Coca-Cola 600 starting lineup

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CONCORD, N.C. — Kevin Harvick will start on the pole for Sunday’s Coca-Cola 600, marking the second consecutive race at Charlotte Motor Speedway he has led the field to the green flag.

Harvick, a two-time Coke 600 winner, earned the top starting spot Thursday night with a lap of 193.424 mph in his Ford. He’ll be joined on the front row by Kyle Busch, who won last weekend’s All-Star Race.

Chase Elliott starts third and is followed by Matt Kenseth and rookie Erik Jones.

Points leader Kyle Larson will start 39th in the 40-car field after not making a qualifying attempt. He hit the wall in practice and then his team couldn’t get through qualifying inspection until one minute remained in the opening round of the session. The team was unable to get Larson out of the garage in time to make an attempt.

Click here for Coca-Cola 600 starting lineup

Slugger Labbe: How do crew chiefs prepare for grueling Coca-Cola 600? (video)

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Veteran crew chief Slugger Labbe stopped by the NASCAR America studio in Charlotte on Thursday.

Labbe gave his perspective on how NASCAR Cup crew chiefs will prepare for Sunday’s Coca-Cola 600. While the race length will be the same as it has been for decades, one significant change will have crew chiefs developing strategy that they’ve never had to deal with in the 600, namely, four different race stages.

Labbe also gave his take on the positives and negatives of the Laser Inspection Station for both pre- and post-race inspections.

Check out the above video.

NASCAR: Remembering Martin Truex Jr.’s dominating 2016 Coca-Cola 600 win

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In one of the most dominating performances in NASCAR history, Martin Truex Jr. turned last year’s Coca-Cola 600 into a runaway one-man show, leading the field for 392 of 400 laps.

Thursday’s edition of NASCAR America took a look back at Truex’s record-setting win.

Check out the video above.