The recession's impact on NASCAR was thrown into stark relief today when International Speedway Corp., a major owner of NASCAR tracks, reported a sharp drop in quarterly revenue and profit.
The announcement by ISC, which owns or operates 13 tracks such as Auto Club Speedway in Fontana and Daytona International Speedway, caused the company's stock price to plunge 24%.
ISC, based in Daytona Beach, Fla., is controlled by the France family, which also controls NASCAR.
NASCAR isn't alone, of course. The weak economy has hurt all forms of motor racing -- and the automakers and other major corporate sponsors that support racing -- along with other professional sports.
"Like other companies, we are feeling the effects of high-single-digit unemployment and historic lows in consumer confidence," John Saunders, ISC's chief operating officer, said today on a conference call with Wall Street analysts. "We do not anticipate seeing any recovery in the economy until sometime in 2010."
And at least one of those analysts, Erik Kolb of Standard & Poor's, cut his rating on ISC's stock to "sell" because the economic problems facing NASCAR and track operators won't end soon. "Despite the company's plans for reducing ticket prices and implementing broad cost reductions, we see continued declines ahead," Kolb wrote in a note to his clients.
Indeed, ISC said it would try to curb the recession's impact by continuing to lower prices of some seats, and by looking for ways to reduce its own operating expenses.
Shortly after ISC's announcement, Auto Club Speedway in Fontana said it would again sell seats in the first five rows of the 92,000-seat facility for $35 each, down from the normal $55, for the Pepsi 500 NASCAR Sprint Cup Series race Oct. 11.
The track initially held that sale in February for its other Cup race, the Auto Club 500, and some other ISC tracks also have been slashing prices of selected seats to fill their grandstands.
NASCAR remains among the most popular of sports; last Sunday's Cup race at Texas Motor Speedway drew an estimated 176,000 people. But there have been big patches of empty seats at other Cup races this spring, such as at Fontana and Atlanta.
In addition, spending on merchandise is slumping. ISC said it also expects a loss this year at Motorsports Authentics, a merchandise seller that ISC jointly owns with the other major U.S. track operator, Speedway Motorsports Inc.
In ISC's fiscal first quarter ended Feb. 28, its net income dropped to $25.1 million, or 52 cents a share, from $36.2 million, or 71 cents, a year earlier. Its revenue in the period fell 14% to $166.1 million from $193.9 million.
The company also lowered its forecast for the full fiscal year, saying it expected annual revenue of $700 million to $720 million, down from the $745 million to $765 million it earlier had forecast.
In response, ISC's stock closed at $18.62 a share, down $5.81 in NASDAQ trading today. The stock traded for $42 a share a year ago.