How Some Of Motorsports Biggest Properties Close Last Minute Partnerships
International Speedway Corporation, which owns and operates thirteen top motorsports tracks throughout the country and promotes over 100 races each year, says it has sponsorship agreements in place for approximately 92 percent of its 2012 gross marketing partnership revenue target. Two NASCAR Sprint Cup event entitlements remain open, which the company says it expects to secure.
As you might expect, the price for partnerships is affected by the time a partner may have left to activate the deal. ISC CFO Daniel Houser explained the company's strategy for selling last minute inventory yesterday.
"What will happen -- particularly as you get into the event season like we are right now, is you have inventory that -- we've got a couple of Cup events that are in the works, but there's less time for a partner to activate so what we will target doing then is we get a multi-year arrangement, it may have a reduced entry-level price for the first year in 2012, but you'll get a healthy market price in the years going out," Houser explained.
For existing partners, Houser pointed out that the changing revenue profile brought on by increased regulation and the economy has had an affect on renewals and reshaped the way partners activate their deals.
"With the Dodd-Frank kind of things and some of the things that came out of that with banking and where the banks were making a lot of money off of transaction fees and bank account fees and things like that for a number of years, well they really wanted to target these consumer retail type people come into the track," Houser said. "When their revenue profile then was changed because of regulatory changes, their focus may alter. And it isn't as targeted of a buy for that industry."
Despite headwinds in categories like housing and banking, Houser said that strength from consumer brands has filled inventory left open by distressed sectors. During the quarter, decreases in sponsorship suite and hospitality revenue were offset by motorsports-related revenues, contributing to a 16% jump in overall profit for ISC in the second quarter.
source: SeekingAlpha.com
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