Racing Away: Pikes Peak Int’l Raceway Sold To ISC

ISC To Purchase Pikes Peak, Move Inventory To Other Tracks

ISC has entered an agreement to buy Pikes Peak Int’l Raceway (PPIR), “shut it down and ship its grandstands to other ISC tracks,” according to Thomas Brown of the Daytona Beach NEWS-JOURNAL. ISC officials said that PPIR’s Busch Series race next August will be relocated to Martinsville Speedway, “where it’s expected to draw a larger crowd.” Brown noted the move requires the approval of NASCAR, but that is “considered a given” since the France family runs both companies. In a management contract with PPIR Owner Lehman Bros. signed three years ago, ISC agreed to pay $18.5M if it decided to buy the track, but ISC Assistant Dir of Investor Relations Leonardo Santiago said that the company “will be paying a lower price when it closes the deal” this week. Santiago did not give the price, but said that it is “‘fully supported’ by the property’s appraised value.” The El Paso (CO) County tax assessor said that the track “has a market value of” $8.9M (Daytona Beach NEWS-JOURNAL, 10/1). In Colorado Springs, Brian Gomez noted the track was built for $35M, but was sold to Lehman Bros. in November ’01 for $16.8M (Colorado Springs GAZETTE, 10/1).

CROWD CONTROL: PPIR President Rob Johnson said that under its management agreement, ISC “had the right to match any bids if PPIR put up the track for sale.” Johnson added that he “didn’t believe the lack of support was a factor,” noting that crowd totals “improved each year he was president of the facility.” In Denver, Stocker & Renck noted the Busch Series ITT Industries, Systems Division and Goulds Pumps Salute to the Troops 250 presented by Dodge on July 23 drew an estimated 40,000 fans, while the IRL Honda Indy 225 August 21 drew close to 30,000 (ROCKY MOUNTAIN NEWS, 10/1).

MIXED BAG: In Colorado Springs, David Ramsey in a front-page piece wrote under the header, “Lack Of Nextel Cup Race Forced Demise Of Pikes Peak Raceway.” Ramsey: “Colorado racing fans didn’t embrace second-tier drivers. The stands weren’t packed, and the big-time vibe that would have lifted PPIR never quite arrived” (Colorado Springs GAZETTE, 10/1). However, in Denver, Mike Chambers wrote the “demise of [PPIR] ... could turn into a blessing for Denver-area race fans who have yearned for a NASCAR Nextel Cup-hosted superspeedway.” ISC Dir of Communications David Talley said, “We’ve always felt that Denver is a great market for motorsports. While right now we focus on Seattle and [N.Y.], it would not be surprising to me that sometime in the near future we’d look at Denver again” (DENVER POST, 10/2).

INDUSTRY ANALYSIS: Standard & Poor’s analyst Gary McDaniel cut ISC’s rating to 3 stars (hold) from 5 stars (strong buy), writing, “We are increasingly concerned about the strategic focus of [ISC’s] management.” McDaniel called the purchase of PPIR “lackluster,” and added, “This comes on the heels of the company's agreement to acquire Action Performance, an unimpressive operator, in our view, in a business we see as risky and tangential.” S&P cut its target price on ISC to $57 from $68 (BUSINESSWEEK.com, 9/30).