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Speedway Motorsports, Inc. becomes privately owned

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Speedway Motorsports, Inc. and the Sonic Financial Corp. announced Tuesday that Sonic Financial has completed its acquisition of all outstanding shares of SMI, meaning SMI will become a privately owned company with no presence on the New York Stock Exchange.

By going private, the company is no longer beholden to investors and no longer has to publicly report its finances, including how much money it brings in from admissions and the TV contract and the seating capacity of each of its tracks.

Bruton Smith and his family own and control Sonic Financial Corp. Smith is the founder and majority stakeholder in Speedway Motorsports Inc. SMI operates eight tracks that host Cup races, including Charlotte Motor Speedway, Las Vegas Motor Speedway and Texas Motor Speedway.

The deal closed with each outstanding share being valued at $19.75 per share in cash. There were 11,434,595 outstanding shares, putting the deal at more than $225 million.

The deal comes as International Speedway Corp. in the process of reaching an agreement to have its outstanding shares sold to NASCAR. The France family owns both ISC and NASCAR. The NASCAR-ISC deal is expected to close this year.

Speedway Motorsports Inc. enters into merger agreement with Sonic Financial

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Speedway Motorsports Inc. announced Wednesday morning that it has entered into a “definitive merger agreement” with Sonic Financial Corp.

Bruton Smith and his family own and control Sonic Financial Corp. Smith is the founder and majority stakeholder in Speedway Motorsports Inc. SMI operates eight tracks that host Cup races, including Charlotte Motor Speedway, Las Vegas Motor Speedway and Texas Motor Speedway.

The move would take SMI private just as International Speedway Corp. is in the process of doing with its agreement to have its outstanding shares sold to NASCAR. The France family owns both ISC and NASCAR. The NASCAR-ISC deal is expected to close this year.

SMI’s deal would call for Sonic Financial to acquire all the outstanding shares of SMI common stock at a price of $19.75 per share in cash. Speedway Motorsports’ stock closed at $18.95 a share Tuesday, its highest price in the last year. SMI’s stock was at $13.94 on April 23, the day before SMI announced receiving an offer from Sonic Financial.

In a memo to employees, SMI stated that once the merger is complete: “Speedway Motorsports, Inc. will continue its focus on owning and operating first-class, modern facilities in premier geographic markets, and providing our individual and corporate fans and customers with the best entertainment experience and marketing value in the motorsports industry.”

Also in the memo to employees, SMI stated: “We have no current plans for job eliminations as a result of the proposed transaction. Rather, the proposed transaction will enable us to accelerate our long-term growth plan and transformation, and maintain our focus on providing the best entertainment experience and marketing value in the motorsports industry.”

NASCAR announces merger agreement with International Speedway Corp.

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International Speedway Corp. announced Wednesday morning that it has entered into an agreement and plan of merger with NASCAR. The deal is valued at approximately $2 billion.

Shareholders will receive $45 for each share.

This deal is expected to close this calendar year.

International Speedway Corp. owns 12 tracks that host NASCAR races, including Daytona International Speedway, Darlington Raceway and Homestead-Miami Speedway.

NASCAR issued a statement Wednesday: “We are pleased with the progress that the negotiation and execution of the merger agreement between NASCAR and ISC represents.  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 told competitors in the drivers meeting before the Daytona 500 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.”

The agreement announced Wednesday allows NASCAR to control those tracks, along with Iowa Speedway, which it already owns. That could make it easier for NASCAR to move dates to take a date from one track to another. NASCAR President Steve Phelps has stated that the schedule is among the areas the sanctioning body is looking at making changes. NASCAR’s five-year sanctioning agreement with tracks ends after next season.

With NASCAR private, it won’t have to publicly report attendance revenue and other financials as ISC had to do as a publicly traded company.

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.

Speedway Motorsports Inc., which owns eight tracks that host NASCAR races, including Charlotte Motor Speedway, Las Vegas Motor Speedway and Texas Motor Speedway, announced April 24 that it had received a non-binding proposal from Sonic Financial Corp. to acquire all outstanding shares of common stock other than those already held by Sonic. Bruton Smith and his family own and control Sonic Financial Corp. Smith is the founder and majority stakeholder in Speedway Motorsports Inc.

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

SMI receives offer from Sonic Financial Corp. to acquire all outstanding shares of common stock

Photo by Gary Miller/Getty Images for Texas Motor Speedway
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Speedway Motorsports Inc. announced Wednesday that it has received a non-binding proposal from Sonic Financial Corp. to acquire all outstanding shares of common stock other than those already held by Sonic.

Bruton Smith and his family own and control Sonic Financial Corp. Smith is the founder and majority stakeholder in Speedway Motorsports Inc. SMI operates eight tracks that host Cup races, including Charlotte Motor Speedway, Las Vegas Motor Speedway and Texas Motor Speedway.

This action follows NASCAR’s non-binding offer Nov. 9 to acquire all of the outstanding shares of Class A and B common stock of International Speedway Corp. not already owned by the controlling shareholders of NASCAR.  That offer has not been completed. There is a class-action suit in a Florida court on behalf of the Firemen’s Retirement System of St. Louis regarding the purchase price for the outstanding stock.

The separate offers to ISC and SMI would make both companies private. That could allow both companies to be more receptive to future schedule changes without the pressure of trying to appease outside investors.

When asked about future agreements with tracks, NASCAR President Steve Phelps said earlier this month on the Dale Jr. Download: “We have to do some things differently. Fans want us to do things differently, and I think we need to do it as quickly as we can within reason, understanding that there are three legs to that stool and one of those legs are the tracks.”

The Sonic Financial Corp. offer for the outstanding SMI stock is for $18 per share. The stock closed at $13.94 on Tuesday. The stock was up to $18.46 by 11 a.m. Wednesday and finished the day at $18.55. The 52-week high for the stock was $18.36. SMI’s board has formed a special committee to consider the offer. Mark M. Gambill, James P. Holden and Tom E. Smith, each of whom is an independent director of the Company, to act on behalf of the Company to consider the proposal by Sonic Financial. Tom E. Smith is not related to Bruton Smith or his family.

Here is the letter from Sonic Financial Corp. to the Board of Directors for SMI:

Sonic Financial Corporation (“SFC”) is pleased to submit this non-binding proposal to acquire all of the outstanding shares of stock of Speedway Motorsports, Inc. (the “Company” or “TRK”) that are not owned by SFC, O. Bruton Smith, his family and entities controlled by Mr. Smith and his family (collectively with SFC, the “Smith  Group”),  for  cash  consideration  of  $18.00  per  share  (our  “Proposal”).  As  you  know,  the  Smith  Group  beneficially  owns,  directly  or  indirectly, approximately 29 million shares of TRK, and controls over 70% of the voting power of TRK.

We believe that our Proposal reflects an extremely attractive value to the Company’s public stockholders. Specifically, $18.00 per share represents a significant premium of 31% to yesterday’s closing price and 26% to the 30-day volume-weighted average price per share of $14.27 as of April 22, 2019.

As you know, NASCAR racing has faced several challenges in recent years, and the Company has been impacted by these challenges. NASCAR has indicated the sport would benefit from structural change. We believe TRK would be more able to compete in this challenging and changing environment as a private company.

SFC and members of the Smith Group are best-positioned to continue to manage and oversee the Company as a private company. Mr. Bruton Smith, Executive Chairman and founder of the Company, has been a pioneer in the motorsports business since the sport’s beginning. His ingenuity and vision for the sport have been highly instrumental in the motorsports business for decades, and the sport has recognized his contributions by inducting him into the NASCAR Hall of Fame.

Additionally, Mr. Marcus Smith, the current Chief Executive Officer of the Company, has played a key role in the motorsports industry and has also been an important figure in the evolution of the sport and the Company over the past several years. Given the Smith Group’s role in the sport and involvement in the Company, we believe we are the best party to lead the Company through the challenges ahead.

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Friday 5: ‘Everything is in play’ as NASCAR looks ahead to new ideas

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This weekend’s racing at Charlotte Motor Speedway’s Roval could be a start of new ideas, new races and new ways of thinking in NASCAR.

Steve Phelps, who begins his role as NASCAR’s president Monday, acknowledged the possibility of doubleheader races, ending the season sooner and closer ties with grassroots racing, among many topics in an hourlong session with reporters this week.

“Everything is in play,” Phelps said.

For a sport that divided its races into stages in 2017, changed the tracks in its playoffs this year and is expected to soon announce rule changes intended to tighten the racing in 2019, Phelps’ attitude shows the efforts series officials will make to retain fans and reach new ones.

His comments come as NASCAR soon will enter a key period with its scheduling. The five-year commitments with tracks expire after the 2020 season and gives NASCAR more flexibility to change its schedule as soon as 2021.

NASCAR typically announces the Cup schedule at least nine months before the season opener. That timetable would give series officials about 20 months until the 2021 schedule is revealed.

With the call for more short tracks, can NASCAR accommodate fan interest? Speedway Motorsports Inc. has expressed an interest in bringing NASCAR’s national series back to the 0.596-mile Fairgrounds Speedway in Nashville, Tennessee.

With the success of the Truck race at Eldora Speedway, would it make sense to run Cup there or on some other dirt track? Could Iowa Speedway land a Cup date? What about midweek races?

Another key question is what about tracks that have lost significant attendance? NASCAR’s charter system allows the sanctioning body to take a charter from a team that has ranked among the three lowest chartered teams in three consecutive years. Is it time to consider taking races away from tracks that have had a precipitous decline in attendance?

“We need to make sure that the race product that we put on the track is as good as it can be, which is what we’re going to do,” Phelps said. “I do know that the race day experience or the race day weekend is really important and we’re working with our tracks to have them understand that.

“We need to reinvent what I would call the event promotion. What that looks like. That gets back to a collaboration effort, which we are going to see between our race tracks, NASCAR, our broadcast partners and our teams and drivers in order to promote this sport in a way that we haven’t in the past. That is really coming together and creating unique opportunities that reach fans and ask them to come out and see what is going on in NASCAR.

“It’s part of our 2019 business plans. We’re working with the race tracks to have them understand that we need to make a change.”

International Speedway Corp., which is controlled by the France family, saw a 10.7 percent decline in admission revenue from 2012-17, according to its annual reports. Also, ISC tracks removed 172,000 seats at its tracks during that time. In July, ISC President John Saunders cited “an issue with star power” as a contributing factor in the company’s attendance decline recently saying, “hopefully this stable of young drivers coming along will start to win and build their brands.”

Speedway Motorsports Inc., which is controlled by Bruton Smith and his family, saw a 25.1 percent decline in admission revenue from 2012-17, according to its annual reports. Also, SMI tracks removed 183,000 seats at its tracks during that time. 

The declines for both track companies have come in a period that has seen Carl Edwards, Tony Stewart, Jeff Gordon and Dale Earnhardt Jr., the 15-time most popular driver, quit driving full-time.

Some in the sport also have raised concerns about the season’s length, suggesting NASCAR should not end in November and compete against the first 11 weeks of the NFL season.

“There’s a lot of discussion about that among the industry,” Phelps said. “There are a lot of things in play. We would rule out nothing at this particular point. We need to make sure that we have all the input, all the information necessary to make an informed decision that will allow us to get to what that 2020 schedule will look like.”

2. Reset button

At the Kansas test this week, Kurt Busch was asked if NASCAR’s leadership issues — Chairman Brian France’s arrest, Jim France taking over as acting Chairman and Brent Dewar’s term as NASCAR president ending — since August have taken away from the playoffs. 

Busch said those events hadn’t but noted a change has taken place in the sport.

“What it has done, though, is behind the scenes, hit the reset button and it’s created a refreshment of communication lines between the drivers, the owners and the way that the sport works,” Busch said. “I’ve never seen so much involvement from Jim France, Mike Helton, Steve Phelps, Steve O’Donnell, the whole group. It seems like a weight was lifted off their shoulders through all of this and now everybody is communicating more easily.”

Jim France has been visible in the garage more often than Brian France had been before his indefinite leave.

“If you’ve been at a race track, you’ve seen Jim France there,” said Steve Phelps, NASCAR’s incoming president. “From the moment he was announced as the Chairman, CEO of NASCAR, replacing Brian, he has been at the race track.”

3. Charlotte surprise?

Erik Jones enters Sunday’s race at the Charlotte Motor Speedway Roval (2 p.m. ET on NBC) in danger of being eliminated from the playoffs.

He is 21 points out of the final cutoff spot. As he looks to this weekend, he knows anything can happen and expects it will.

“I’ll bet you will see a surprise winner this weekend, somebody you wouldn’t expect just because it is going to be a little bit of an attrition race,” he said. “For us, we have to survive, we have to make it to the end of the race.

“We can’t wreck out and not put ourselves in a spot to take advantage of somebody else’s mistakes. We’ve got to hope for some trouble from some of the other playoff guys and hope we can be in position to capitalize on it. Obviously, winning would be the easiest way for us to guarantee it but that’s going to be tough to do.”

Others below the cutoff and in danger of being eliminated after Sunday’s race are Clint Bowyer (four points from the cutoff), Jimmie Johnson (six points from the cutoff) and Denny Hamlin (29 points from the cutoff). Ryan Blaney holds what would be the final transfer spot.

4. Special drivers meeting message?

Justin Allgaier, who has won the last two Xfinity races on road courses, is concerned about the start and restarts on the Roval.

NASCAR will not have drivers go through the frontstretch chicane when coming to take the green flag. If drivers had to go through that chicane, those at the front would be accelerating while some in the back would be braking to get through the chicane.

Instead, drivers will do restarts on the frontstretch and skip the chicane. That means they’ll be entering Turn 1 — a sharp left-hand turn — anywhere from 15-30 mph faster. So, as lead cars brake to make the turn, others behind them will be accelerating.

“It’s such a slow, lazy turn in and the speed that we’re going to be carrying, somebody that ducks to the left could potentially wreck a lot of cars,” Allgaier said. “I think we’re all going to have to really be mindful. It’s either going to go one way or the other. We’re either all going to wreck there or nobody is going to wreck there because we’re all very aware of it.

“I’m hopeful that Wayne (Auton, Xfinity Series managing director) will talk about that in the drivers meeting (and say) ‘Hey, let’s at least make it through Turn 1 at the start of the race.’

“We have generated a lot of hype and a lot of buzz around this race, there’s a lot of attention with coming here … the last thing we want to do is go out there and make a bunch of idiots of ourselves.”

5. Still searching 

Eight drivers who won races last year remain winless this season. They are: Kyle Larson (four wins 2017), Jimmie Johnson (three), Ricky Stenhouse Jr. (two), Denny Hamlin (two), Matt Kenseth (one), Kasey Kahne (one), Ryan Newman (one) and Ryan Blaney (one).

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