DOVER – Dover Motorsports announced Wednesday that it will move one of its two NASCAR Cup Series races from Dover International Speedway to its racetrack in Nashville in 2021, ending Delaware’s nearly 50-year string of hosting two race weekends per year and costing the state tens of millions in tourism revenue.
The news come amid a time when the racetrack owner is unsure whether its postponed May race weekend will be rescheduled this year. Dover International Speedway, which began hosting races in 1969 with a second race weekend added two years later, has also faced declining attendance at the state’s highest profile sporting event, forcing the owner to remove parts of its grandstand.
Dover Mayor Robin Christiansen said that the economic impact by the loss of a race weekend would be “substantial” for his city.
“I understand that it’s a business decision,” he said, noting NASCAR is trying new things to increase its fanbase, especially among younger people. “It’s a win-win for them, but it’s certainly going to have an economic impact on Dover’s economy.”
The 1.33-mile concrete Nashville Superspeedway track was built in 2001 by Dover Motorsports and hosted NASCAR- and IRL-sanctioned events from 2001 to 2011. While it hosted NTT IndyCar Series, the highest level of open-air racing, the Nashville track never hosted a Cup Series race, the pinnacle of NASCAR.
The racetrack’s parent company, Dover Motorsports, said in a statement Wednesday that it was “energized” to see the enthusiasm of Nashville racing fans when NASCAR hosted an awards banquet in the Tennessee capital in December.
“When we built Nashville Superspeedway in 2001 our goal was to one day secure a NASCAR Cup Series race for the venue,” said Denis McGlynn, president and CEO of Dover Motorsports Inc., in a statement announcing the move. “Nashville, central Tennessee and the surrounding market area is filled with passionate race fans. We are thrilled that we were able to collaborate with NASCAR and our television partners to get this done and we can’t wait to put on a great show there in 2021.
McGlynn reported that Dover Motorsports was in discussions with NASCAR for some time about the possibility of the move, but the plan was only solidified in recent weeks. The company will reportedly invest $7 million to $10 million into updating the track in preparation for its NASCAR return.
According to a filing with the U.S. Securities and Exchange Commission, NASCAR is targeting June 20, 2021, for the Nashville race, while Dover would retain its race on May 16 or 23. Tennessee will be home to a NASCAR race for at least the next four years, with a sanction agreement signed with NASCAR lasting until at least 2024. Dover Motorsports is paying NASCAR $8.6 million to hold the race in Nashville next year, with that sum rising to $9.9 million by 2024.
The Nashville Superspeedway is located on approximately 1,000 acres, and 25,000 permanent grandstand seats and lights for night racing. That lighting is important in NASCAR’s ability to pivot its races amid emergencies, with Dover lacking such lights and therefore limited to racing in daytime hours.
NASCAR began racing again on May 17, although no fans have been allowed at the racetracks to reduce the risk of transmission of the COVID-19 virus. Dover Motorsports believes that it will likely host a double-header of Cup Series races on Aug. 22 and 23 to make up for the May postponement, but it’s unknown whether fans will be allowed by then.
The economic impact of not holding one of Dover’s races will likely be huge for businesses around the state capital that are already hurting from decreased patronage among the pandemic. Hotels will no longer host racing fans, restaurants and bars will no longer be serving them and retailers won’t have a weekend of tens of thousands stocking up to camp at the racetrack.
Estimates for that impact are hard to pin down, a 2001 study pegged the races’ impact at $94 million annually although a 2019 Delaware Department of Transportation economic impact study on state airports pegged it lower at about $60 million.
According to the 2019 annual report for Dover Motorsports, the races made about $4.9 million in admission revenue – that continues a more than decade-long decline as NASCAR deals with falling attendance. In 2008, admissions revenue was more than $31 million.
Tellingly, Dover International Speedway spent about $1.5 million last year to decrease its seating capacity from 83,000 to 54,000. At its height a decade ago, the racetrack had a capacity of about 135,000.
Despite falling attendance, the races’ TV broadcast rights have become more valuable every year, totaling $34.2 million last year. According to the 10-K filing, Dover Motorsports is scheduled for a 4% increase in broadcast rights fees, but if the races cannot be rescheduled it would be a major blow to revenues.
The move to Nashville also comes with a TV broadcast contract attached, worth $18.2 million in 2021 and rising to $20.8 million by 2024, according to the SEC filing. Dover will see a broadcast contract worth $15.1 million – meaning 2021 will see a smaller revenue return from the broadcast than 2020 for Dover Motorsports.
News of the move to Nashville brought a 15% Wednesday bump to stock value for Dover Motorsports. Shares opened Wednesday morning at $1.64 after closing Tuesday at $1.42.
Despite the loss of the second race weekend, Christiansen, who attended the first NASCAR race in Dover in 1969, said that he values the partnership the city has shared with Dover Motorsports. He expects to have discussions with company leaders about how to leverage the facility to host other sports or entertainment, noting that Firefly Music Festival hosted there has been a boon of its own to the city’s economy.
“I think we will bounce back,” he said. “I want to optimistically say that our best days of that partnership are ahead of us.”
By Jacob Owens
jowens@delawarebusinesstimes.com
Editor’s note: This story incorrectly reported that Dover Motorsports was the only publicly traded company to own NASCAR racetracks, but in fact there are several others. We regret the error.
