Last year's musical chairs of NASCAR drivers, teams and sponsors was the main reason for Speedway Motorsports' fourth-quarter loss and steep drop in 2007 profits, company officials said Wednesday.
The Concord-based company, which owns Lowe's Motor Speedway and six other NASCAR venues, reported a $20.2 million loss in the quarter, compared with a $28.8 million profit a year earlier. Net income for 2007 was $38.4 million, down more than 65 percent from $111.2 million the previous year.
While revenues dipped slightly, expenses skyrocketed. Company officials blamed the results mostly on losses at Motorsports Authentics, a merchandising venture owned equally by Speedway Motorsports and International Speedway Corp.
Many top NASCAR drivers, including Dale Earnhardt Jr., changed teams and sponsors last year, and some teams switched car manufacturers. In addition, the Nextel Cup was renamed the Sprint Cup, and the former Busch Series is now sponsored by Nationwide.
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Those changes left outdated merchandise on shelves and hammered Speedway Motorsports' bottom line. The company reported $36.5 million in losses in equity investments in the fourth quarter, compared with $857,000 in a year earlier. For 2007, the company reported $57.4 million in losses, compared with $3.3 million in losses in 2006.
Founded by billionaire Bruton Smith, Speedway Motorsports owns tracks in the Charlotte, Atlanta, Las Vegas and Dallas-Fort Worth markets, as well as in California, New Hampshire and Tennessee. Admissions and other event-related revenues at those venues were up in 2007, company officials noted.
"Almost four million fans attended our 2007 events, despite challenging economic circumstances, demonstrating that the demand and appeal for motorsports entertainment remains strong," Smith said in a statement.
But those gains were offset by lower NASCAR broadcasting revenues, which were down roughly 12 percent for the quarter and the year.
Looking ahead, Speedway Motorsports expects revenues of $620 million to $640 million this year, compared with less than $562 million in 2007. The company also expects profits to bounce back to 2006 levels, falling in the range of $105 million to $110 million.