Dover Motorsports, Inc. (NYSE:DVD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into Material Definitive Agreements.
On June 2, 2020, the registrant’s wholly-owned subsidiary, Nashville Speedway, USA, Inc. (“Nashville”), entered into a four year Sanction Agreement with NASCAR Event Management, Inc. (“NEM”) to which Nashville will organize and promote NASCAR Cup Series events for the 2021 to 2024 racing seasons. The date for the 2021 season is tentatively scheduled for June 20, 2021, with subsequent years’ dates to be determined.
On June 2, 2020, the registrant’s wholly-owned subsidiary, Dover International Speedway, Inc. (“Speedway”), entered into a one year Sanction Agreement with NEM to which Speedway will organize and promote a NASCAR Cup Series event for the 2021 racing season, tentatively scheduled for May 16 or May 23, 2021.
to each NEM sanction agreement, consistent with typical NEM sanction agreements, NEM grants its sanction to a promoter, in this case Nashville and Speedway, respectively, to organize, promote and hold a particular competition. The promoter sells tickets to the competition, sells or arranges for the sale of merchandise and concessions, and sells advertising, sponsorships and hospitality services. NEM conducts the competition, arranges for the drivers, and has sole control over the competition, including the right to require alterations to the promoter’s facility and the right to approve or disapprove any advertising or sponsorship of the promoter. NEM also has exclusive rights to exploit live broadcast and certain broadcast and intellectual property rights related to the competition, and exclusive rights to sponsorship and promotional rights relative to the series to which a particular competition belongs. The promoter must pay the sanction fee and purse monies and receives a share of the live broadcast revenue contracted for by NEM. The promoter is responsible for the condition of the facility, for compliance with laws, for control of the public, for fire and medical equipment and personnel, for security, for insurance and for providing facilities and services required by NEM officials and the live broadcast personnel.
The principal economic terms of the sanction agreement between NEM and Nashville are as follows: Total purse and sanction fees to be paid by Nashville for the events are approximately: 2021 – $8.6 million, 2022 – $9.0 million, 2023 – $9.4 million and 2024 – $9.9 million. Estimated live broadcast revenue to be recognized by Nashville for the events is approximately: 2021 – $18.2 million, 2022 – $18.9 million, 2023 – $19.9 million and 2024 – $20.8 million.
The principal economic terms of the sanction agreement between NEM and Speedway are as follows: Total purse and sanction fees to be paid by Speedway for the 2021 event are approximately $7.8 million. Estimated live broadcast revenue to be recognized by Speedway for the 2021 event is approximately $15.1 million.
Live broadcast revenue figures are based on the assumption that all events on the 2021 NASCAR Cup Series schedule take place and that all promoters will be entitled to their respective percentage allocations as set by NEM.
Nashville Superspeedway was built by Dover Motorsports, Inc. in 2001 and hosted racing events from several sanctioning bodies from 2001 through 2011. While the facility remains in good condition, the registrant’s current estimate of capital spending requirements to prepare the facility to host a NASCAR Cup Series race in 2021 are approximately $7 million to $10 million over the next two years.
The sanction agreements for Speedway’s and Nashville’s NASCAR Cup Series competitions are attached as exhibits to this Form 8-K as they represent agreements upon which our business is substantially dependent.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
| 10.1 | Sanction Agreement between Dover International Speedway, Inc. and NASCAR Event Management, Inc. for 2021 National Association for Stock Car Auto Racing, Inc. NASCAR Cup Series events (delivered June 2, 2020). |
| 10.2 | Sanction Agreement between Nashville Speedway, USA, Inc. and NASCAR Event Management, Inc. for 2021 to 2024 National Association for Stock Car Auto Racing, Inc. NASCAR Cup Series events (delivered June 2, 2020). |
DOVER MOTORSPORTS INC Exhibit
EX-10.1 2 tm2021525d1_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1SANCTION AGREEMENTNASCAR CUP SERIESEVENT DATE: May 16,…
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About Dover Motorsports, Inc. (NYSE:DVD)
Dover Motorsports, Inc. is a marketer and promoter of motorsports entertainment in the United States. The Company, through its subsidiaries, owns and operates Dover International Speedway in Dover, Delaware, and Nashville Superspeedway near Nashville, Tennessee. The Dover International Speedway is located in Dover, Delaware, on approximately 770 acres of land. The Nashville Superspeedway is a motorsports complex located on approximately 1,400 acres of land in Wilson County and Rutherford County, Tennessee. The Company promotes approximately six National Association for Stock Car Auto Racing (NASCAR)-sanctioned events at the Dover International Speedway, including two races in the NASCAR Sprint Cup Series professional stock car racing circuit, two races in the NASCAR XFINITY Series racing circuit, one race in the NASCAR Camping World Truck Series racing circuit and one race in the NASCAR K&N Pro Series East racing circuit.
