FULL SPEED AHEAD Setting The Pace For A New Era In Motorsports Entertainment Speedway Motorsports,Inc. 2000 Annual Report. “Under the new broadcast arrange- ments, we believe network and media exposure will increase expo- nentially, brightening the spotlight on our sport like never before.” –Bruton Smith TO OUR STOCKHOLDERS Innovation– the fuel that keeps Speedway Motorsports moving Our efforts to continually forward at lightning speed. Since our inception bolster interest in our sport more than 40 years ago, we have brought many included the construction of firsts to our sport, setting precedents the others short tracks at Lowe’s Motor follow. Never satisfied to stand still, innovation Speedway and Texas Motor continues to be our driving force. Speedway. Proving that everything old is new again, the new venues gave our Company the opportunity 2000 was a year in which we struggled against to return to our roots, and let fans experience the elements beyond our control. Lack of promotion by incomparable and unpredictable atmosphere of dirt broadcasters cooled overall media interest in the sport. track competition. The popularity of the tracks in We experienced one of the worst years in terms of Charlotte and Texas compelled us to offer a series weather. Also, the lack of an exciting Championship of dirt track races in Bristol, where new attendance point race in the Winston Cup Series further damp- records were set for two dirt ened ticket interest for the racing series. last six months of the year. A unique approach to fan It was also a year of transi- relations led to the forma- tion for our Company and the tion of the Fans First pro- entire industry as we entered gram. This innovative ini- a new era of shifting econom- tiative is aimed at honoring ics and consolidated media and retaining our fans, the opportunities. The new individuals truly responsible NASCAR television package for our success, by offering a announced in late 1999 variety of benefits, including granted domestic television a freeze on 2001 ticket prices. rights to four broadcasters. In addition, ancillary rights will go to a variety of Despite the challenges of 2000, we still achieved non-traditional media, including pay-per-view and a nine percent increase in total revenues and a 12 Internet outlets. percent increase in operating income over the prior year. Our ability to grow the Company in the face of These broadcast arrangements did not go into effect such challenges illustrates our drive for exceptional until 2001, and during the interim, existing broad- performance and our operational strengths. casters were unwilling to invest promotional dollars Speedway Motorsports in a product they would no longer control. Without is ideally positioned to promotional muscle, television ratings lagged and take advantage of fan enthusiasm seemed to dissipate. Rest assured, the opportunities Bruton Smith Chairman and CEO the lag is only temporary. Television ratings for 2001 that lie ahead. are already up substantially. Under the new broadcast arrangements, we believe network and media exposure will increase exponentially, brightening the spotlight on our sport like never before. H.A. Wheeler COO and President Growth Strategy • Expansion and improvement of existing facilities • Enhancement of broadcast and sponsorship revenues • Further development of Finish Line Events, 600 Racing and Performance Racing Network • Additional events and increased usage of existing facilities • Acquisition and development of additional motorsports facilities NEW ECONOMICS Shifting Into High Gear The motorsports industry is undergoing another Building on this momen- revival. Our fan base today is more diverse and tum, NASCAR finalized expansive than ever. A record broadcasting rights negotiations of a consolidated package puts us on the cusp of unprecedented Broadcast Ancillary Rights media exposure and earnings potential. At no other Package in 2001 which includes time in history has our sport been surrounded by so NASCAR.com, the NASCAR Channel, NASCAR much attention and enthusiasm. And never before International Broadcast Rights, Satellite Radio has our Company been so strategically poised to Broadcast, NASCAR Images, SportsVision, FanScan embrace the fervor. and pay-per-view telecasts. These previously unex- ploited media rights open untapped and foreign At Speedway Motorsports, we are shifting into high markets, intensifying the media coverage of our gear. And our prospects for the future are wide open. sport and accelerating the growth of the entire indus- try. The Ancillary Rights Welcome To The Next Era Package totals more than The year 2000 represented $245 million in revenues the last year of an era in over a 12-year period, with the motorsports industry. annual increases averaging NASCAR continued to 35% from 2001 through reach new milestones as 2006, and includes an addi- the fastest-growing spectator tional profit participation sport in the United States, aspect. and our fundamental busi- ness began a transformation. Total NASCAR broadcast revenues to Speedway History was made in late Motorsports – including 1999 when NASCAR negotiated a consolidated Domestic and Ancillary Rights – should approximate Domestic Broadcast Rights package for all Winston $68 million in 2001. This represents a $38 million Cup and Busch Series promoters. Under this agree- increase over 2000 revenues. Clearly, these agree- ment, Fox Sports, FX Networks, NBC Sports and ments redefine the industry as we know it. It moves Turner Sports contracted for NASCAR Winston Cup NASCAR into entirely new territories of possibility Series and Busch Series Grand National Division and prepares Speedway Motorsports for uncharted Domestic Broadcast Rights. These rights are successes in the future. valued at $2.4 billion over a six- year period. Total net domestic '00 354.3 '00 107.7 television broadcast revenues to '99 317.5 '99 98.7 the industry could approximate '98 229.8 '98 79.8 $257 million in 2001, with annual '97 192.1 '97 68.4 increases averaging 17 percent '96 102.1 '96 39.3 from 2001 through 2006. dollars in millions $0 50 100 150 200 250 300 350 dollars in millions $0 20 40 60 80 100 Revenues Operating Income Blazing An Impressive Trail Speedway Motorsports owns and operates six for both the Pennzoil World of Outlaws sprint cars motorsports facilities strategically located in three and UDTRA dirt late model series. of the top ten television markets in the country. A new seating addition at the top of Turns One and Each facility is located near a major urban area or Two Grandstands quickly sold out for all four major a vacation destination and all uphold the SMI NASCAR races – as a result, almost 500,000 attended commitment to quality, ongoing innovation and these races in 2000. And while hosting NHRA’s all- perpetual growth. Throughout the 2000 season, star event, The Winston Showdown, Bristol Dragway our speedways were all moving full speed ahead. announced it was bringing an NHRA Nationals event to Atlanta Motor Speedway Thunder Valley in 2001. The all-new event will be called The competition was ferocious at Atlanta Motor The Mac Tools Thunder Valley Nationals. Speedway in 2000. March’s Cracker Barrel Old Country The speedway finished out the year with another bright Store 500 produced the closest finish in track history as spot, the fourth season of well as an amazing 30 lead Fantasy In Lights, a holiday changes among 17 leaders. It light spectacular benefiting was a true photo finish by the Bristol Chapter of Dale Earnhardt over Bobby Speedway Children’s Labonte. This kind of ultra- Charities. competitive racing reinforced the track’s reputation as the Las Vegas Motor Speedway fastest track on the circuit, It was a year of breaking and also as one of the most records and reaching mile- competitive. stones at Las Vegas Motor In July, the Indy Racing Speedway. The largest crowd Northern Light Series lit up a ever to attend a sporting hot night as Greg Ray captured the pole and set a new event west of Texas saw Jeff Burton capture victories race record. November marked the season’s end with in the NASCAR Winston Cup Series and in the Sam’s Jerry Nadeau becoming the fourth Winston Cup driver Town 300 NASCAR Busch Series races. to record his first win of the season at the NAPA 500. With the opening of The Bullring, a 3/8-mile, paved Bristol Motor Speedway oval that hosts the NASCAR Weekly Racing Series, Las Vegas’ racing program was broadened to include Continuing its reign as NASCAR fans’ favorite high-speed, wheel-to-wheel drama nearly every speedway, Bristol Motor Speedway entered new weekend of the year. Impressive crowds of enthusi- territory to attract more fans to East Tennessee. astic fans packed into this facility weekly to witness Speedway management stunned fans in June by the best in short track entertainment. dumping more than 1,400 truckloads of red Tennessee Also in 2000, the National Hot Rod Association made clay on Bristol’s concrete oval to host two weekends its Las Vegas debut. An overflow crowd filled The of exciting dirt racing. Attendance records were set Strip at LVMS to watch superstars like John Force STATE-OF-THE-ART FACILITIES and Kenny Bernstein race at speeds of over 300 the 2003 racing season, miles per hour. Other notable visitors included the will dramatically expand Indy Racing League, the American LeMans Series seating, corporate facilities, and the Pennzoil World of Outlaws. and fan amenities while improving traffic access. Lowe’s Motor Speedway The year 2000 saw Charlotte’s Lowe’s Motor Included will be the Speedway rise to new heights – literally. With the following enhancements: construction of the 10,000-seat Ford Grandstand, • 64,000 new hillside terrace seats • 25,000 new grandstand seats Lowe’s Motor Speedway is now the second largest • 19 new hospitality suites sporting facility in the United States.