ISC Announces Operating Income Growth For Q2, First Half Of '11 Due To Expense Reduction
A reduction in expenses helped ISC overcome drops in ticket revenue to deliver an operating income growth for the second quarter and first six months of the ‘11 fiscal year. The company saw its admissions revenue decrease by $5.7M in the first quarter and $8.2M in the first six months to a total of $29.9M and $66.0M, respectively. Attendance totaled 960,000 in Q2, down approximately 4% from 1M during the same period in '10, ISC President John Saunders said. ISC cut its expenses by $6.2M in Q2 and $9.1M in the first six months of the fiscal year. ISC Vice Chair & CEO Lesa France Kennedy said in a statement that the decreases in revenues were primarily a result of schedule changes at Kansas Speedway, which did not host the Izod IndyCar and NASCAR Camping World Truck series races it had hosted in Q2 of ‘10. Kennedy added, "The performance of our events-to-date, coupled with the cost reduction commitments we outlined last year, continues to generate results in line with our expectations. While the economy remains our biggest hurdle to admissions-related revenue growth, we feel confident that our commitment to improving the guest experience is positioning the company for long-term growth." The company reiterated its financial guidance for the fiscal year when it expects to post total revenue of $635-650M. It has secured 94% of its target corporate revenues and has only one Sprint Cup Series race entitlement left to sell. Saunders: "We remain encouraged by the level of corporate marketing activity.” Advance ticket sales at ISC tracks are down 6% on units and 7% on volume from ‘10, but Saunders said that the company hopes to see those numbers improve as the national unemployment rate decreases. Saunders expressed optimism that NASCAR would secure an increase in TV rights fees when it sits down to negotiate a new rights agreement beyond '14. He pointed to the fact that the sport is DVR proof and NASCAR's recent hiring of Steve Herbst as VP/Broadcasting & Global Media Strategy as reasons for his optimism.
GOING BACK TO CALI: After failing to reach an agreement on sanctioning fees and cutting ties with IndyCar in '11, ISC has patched things up with the series. The company's California track, Auto Club Speedway, will host a race next year that Saunders today said will be "profitable." IndyCar CEO Randy Bernard, in an interview with SBJ, said, "I always said that we're doing events with promoters and partners that want to see us grow and I really believe (Auto Club President Gillian Zucker) wants to see us grow." Bernard said that IndyCar asked for "a little less" in sanctioning fees than what the series was after last year but added that IndyCar would "net the same thing" because of "partnership elements" such as suite inventory, ticket inventory and presenting sponsorship that Auto Club will allow IndyCar to sell. Bernard said IndyCar is in contact with other ISC tracks, including Chicagoland Speedway, and could return to other ISC venues in ‘12. Bernard was on his way to Toronto for this weekend's Izod IndyCar race. He said that the race organizers are expecting a huge walk up for the race, which is up 12% from last year in pre-sales. Bernard said, "I'm tickled to death."