SBD/13/Finance

AUTOWEEK GOES INSIDE THE FINANCES AT CART BEFORE ITS IPO

          CART looks to raise as much as $84.1M by issuing 4.573
     million shares of stock in its IPO, which would mean it
     hopes to sell its stock initially for $18.40 per share, once
     the SEC approves the offering, "probably within the next few
     weeks," according to Larry Edsall of AUTOWEEK.  Statements
     filed with the SEC showed that "about half" of the auto-
     racing body's annual income of roughly $40M has come from
     sanction fees.  Under current deals, those fees range from
     $850,000 to $4.1M per event.  In '97, tracks paid $24.4M to
     CART, but that figure "should grow" to $30.4M in '98, "in
     part because of new events in Houston and Japan."  CART also
     projects that sponsorship revenues will grow from $7.2M last
     year to $12.1M this year (Larry Edsall, AUTOWEEK, 1/12).
          WILL IT FLY? AUTOWEEK's Edsall: "Despite the healthy
     cash flow, analysts aren't sure how the IPO will go over
     with investors."  Josephthal & Co. analyst Dennis McAlpine:
     "A couple of the racetrack stocks are doing very well.  They
     are fixed-cost facilities. ... But a sanctioning body
     doesn't have the same sort of leverage.  CART also has its
     own peculiarities because of the split with the IRL."  To
     "prepare" for the IPO, CART reorganized, with each of the
     team franchises receiving 400,000 shares of stock.  At
     $18.40 per share, each team would be worth at least $7.36M. 
     Team "owners aren't giving up much control; they'll retain
     nearly 70 percent of the company" (AUTOWEEK, 1/12). 

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