SMI Hurt By Sponsor Pullbacks, but Sees Signs of Recovery
The majority of Speedway Motorsports, Inc. sponsorship decline this year will be attributable to two sponsors, executives said in the company's first quarter conference call today. Pullbacks at Lowe's and Nationwide will cost the company $3-4 million and $3 million, respectively. Nevertheless, President and COO, Marcus Smith, sees signs that corporate spending may be turning the corner towards a recovery.
"Most of our NASCAR Sprint Cup Nationwide and Camping World Truck Series event sponsorships are sold for 2010 and beyond," Smith said. "For 2010 we have one open entitlement at Atlanta for our Labor Day night race."
While SMI does not break out sponsorship revenue specifically, the company said that event-related revenue, of which sponsorship is comprised, was off by $5 million (12.9%) in the first quarter. Approximately $500,000 of the revenue decline in the first quarter was attributable to sponsorships. This is a lower decline than other areas of the business such as broadcast rights and luxury suites, each reporting a $1 million revenue drop over the quarter.
"Customer interest in corporate area seems to be reviving," Smith said. "Our sales teams are seeing good activity in the pipeline compared to this same time last year and we’re seeing companies like Dupont, AAA and others come back into sport and increase their activity with hospitality and sponsorship."