Dover shareholder wants racetrack company to sell

[tstran17_88]

DOVER, Del. -- Dover International Speedway's largest outside shareholder wants the racetrack's assets to be sold, with the Monster Mile possibly becoming part of Bruton Smith's empire at Speedway Motorsports Inc.

Mario Cibelli, founder and managing partner of Marathon Partners, a New York-based investment group, sent a letter to the board of directors of Dover Motorsports Inc. on Thursday urging the company to divest itself of its racing properties. In Cibelli's view, the recent purchases by SMI of speedways in Kentucky and New Hampshire mean the time is right to sell a Dover facility whose stock price has fallen 20 percent since racing and casino operations were split six years ago.

"The days of the independent NASCAR track owners have all but passed," Cibelli wrote in a letter faxed and express mailed to board members. "Dover Motorsports will never be able to achieve the operating performance of International Speedway Corporation and Speedway Motorsports Inc. The combined strength of the industry leaders leaves the company at a permanent competitive disadvantage in regards to sponsorship dollars, operating margins and infrastructure. It is simply not possible for a single Sprint Cup series track to produce the results of a large portfolio of similar tracks. More time and additional patience cannot change this fact. Both ISC and SMI can operate the Monster Mile more profitably than Dover Motorsports will ever be able to."

Dover also owns Nationwide Series tracks in Nashville, Memphis and St. Louis, facilities Cibelli has been told lose a cumulative $6 million a year. At worst, he wants what he calls the company's "Midwest tracks" sold off. At best, he urges the hiring of an advisor to facilitate a competitive auction that would sell all the company's assets, including the 135,000-seat facility in the Delaware capital.

And who would buy the Dover track? While Cibelli doesn't explicitly recommend a sale to Smith's Charlotte-based group, his thoughts seem clearly motivated by recent events. SMI spent $340 million to buy New Hampshire Motor Speedway, a facility with fewer seats than the Dover track. Smith also recently bought Kentucky Speedway, a track with no Sprint Cup date. Dover, Pocono Raceway and Indianapolis Motor Speedway are the only three tracks on NASCAR's premier circuit not owned by SMI or its chief competitor, Daytona Beach-based ISC.

"Assuming the [Kentucky] transaction closes, this has created an even greater need for SMI to acquire additional tracks that host Sprint Cup races. Comments in the press from SMI and Kentucky Speedway make it clear that they have a strong interest in acquiring additional Sprint Cup racetracks. Looking at SMI's portfolio of facilities, including Kentucky, it is clear SMI needs to own at least one more racetrack that has two Sprint Cup weekends attached to it," Cibelli wrote.

"The past decade of racetrack consolidation has left Dover Motorsports and Pocono Raceway as the only viable options for acquiring additional Sprint Cup race weekends. While it is impossible to rule out any transaction, Pocono Raceway owner Joe Mattioli and his wife have been widely quoted for years saying that Pocono is not for sale and that the track is within a generation-skipping trust which would make any potential sale occur many years from now. The consolidation of premier NASCAR racing facilities in America is all but complete, and Dover is the final piece to the puzzle."

Cibelli is the largest institutional shareholder of the Dover Motorsports company, owning more than 2.6 million shares worth $13 million, according to SEC filings. "Over the years, Dover Motorsports has told shareholders that it would be open to selling itself to interested parties that put forth serious inquiries," he wrote. "This is quite possibly the perfect time for Dover Motorsports to participate in the consolidation of the industry."

http://www.nascar.com/2008/news/head...ale/index.html

[call_me_andrew]

God help us if SMI merges with ISC.

[Jonesi]

"owning more than 2.6 million shares worth $13 million"

I wish the author had said what percentage of stock that is. Even a conservative estimate of the 3 tracks they own, it can't be more than a percent or two.

[racing69]

Apparently it's 7%!!! Bargain! And it's Dover (minus casino complex) plus three other tracks which host Nationwide / Trucks and ARCA plus some other facilities such as dirt tracks!