UVA-C-2222

INTERNATIONAL SPEEDWAY CORPORATION

Modern had its start over 100 years ago on the beaches of Daytona Beach, .1 The beaches were then as they are today − expansive and perfectly suited for automobiles. Auto traffic on Daytona’s beaches is still the norm as their sheer size alone makes them relatively free of pedestrian accidents. Once each day the sands are wiped clean by outgoing tides and become hard-packed. Vehicles trapped in soft sand, a problem typical of most beaches, is only of minor concern to traffic in Daytona.

NASCAR

In the mid-1930s, William “Big Bill” France saw firsthand the racing potential of Daytona Beach. As the owner of a local gas station, France had a natural interest in automobiles and frequented the trials and competitive races held on the beach. On occasion he was known to enter a race himself. Like all drivers and promoters of that era, France was frustrated by a lack of uniformity. Schedules, rules, car specifications, and driver safety requirements all varied. Corruption was rampant. It was not unusual for a race winner to arrive at a checkered flag only to learn that the promoter had skipped town with the purse. By rule cars entered were “stock” or right off the showroom floor. As might be expected, to gain advantage over competitors almost all drivers dangerously modified their cars from stock to gain extra speed. Despite the fact that racing was flourishing throughout the southeast, France recognized that for the sport to ultimately succeed it was necessary to set common rules, establish common racecar specifications, and vigilantly promote each race under a common umbrella. To effect this change in 1947, France organized a meeting of a group of business leaders at Daytona’s . From that meeting the National Association of Stock Car Auto Racing (NASCAR) was formed.

1 As early as 1903 the first automobile time trial was held just north of Daytona in the town of Ormond. Alexander Winton set the first auto speed record with a blistering 68.2 miles per hour.

This case was prepared by Paul Simko, Associate Professor of Business Administration, from publicly available data. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright © 2004 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to [email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation -2- UVA-C-2222

By 2004 NASCAR remained the premier sanctioning body for stock car racing. Its primary role continued unchanged: to sanction official NASCAR races, establish and enforce rules for those races, monitor the distribution of prize monies, and maintain a points system designed to determine an annual champion. Although from humble roots, NASCAR grew large enough to annually sanction over 1,750 races across 37 states. NASCAR racing ran the complete spectrum, from weekly races at small dirt tracks, to regional touring series, to three top- tier series. NASCAR’s three highest-level series were national in scope, with the most important the Nextel Cup (formerly the Winston Cup). Setting NASCAR apart from other sports was the independent-contractor status of the drivers and their crew members. In order to officiate or compete in a NASCAR-sanctioned event, individuals applied for licenses on an annual basis, and they maintained those licenses in good standing throughout the year. All officials and competitors abided by NASCAR’s rules and procedures. When NASCAR made a change, therefore, all parties were directly impacted.2

Stock car auto racing was by no means a second-tier sporting activity, and it was not cheap. NASCAR had grown into a multibillion-dollar business with races in most major markets, a national fan base by some estimates reaching 75 million, and a multibillion-dollar television contract. To participate driver teams financed out-of-pocket, the bulk of which typically came from corporate sponsorships. Estimates ranged from $10 million to $15 million to field a car for the 2004 Nextel Cup season.

The Speedway Corporation

In the late 1940s and early 1950s, NASCAR races were concentrated in the southeastern United States. In response to the surge in growth that came from his endless promoting, in 1959 Bill France moved racing off Daytona’s beaches to his newly constructed Daytona International Speedway. This 2.5 mile high-banked oval speedway was like no other of its kind; race fans left that first race in awe at the sight of 59 brightly painted cars running over 140 miles per hour for 500 consecutive miles (even if in a seemingly endless circle). As was the case at its opening, the mystique of this track has remained. Its signature race, the , is widely regarded as the most prestigious stock car race in the world.

With the 1968 opening of a similar, but larger, track in Talladega, Alabama, Bill France’s speedway company had stretched beyond Daytona. The company, now known as the International Speedway Corporation (ISC), was the nation’s leading promoter of motor sports activities. By late 2003 it owned and operated twelve major race facilities (see Exhibit 1) and held significant interests in two others. Over the years, track growth came from a combination of purchases and outright construction, and expansion plans called for new facilities in the Pacific

2 One such change was the highly controversial point system approach that determined the winner of the 2004 Nextel Cup Championship. Late season races were now weighted more heavily than earlier races, as a means to avoid crowning a de facto champion too early in the racing season and thus sustaining fan interest throughout the year.

-3- UVA-C-2222

Northwest and the New York metropolitan areas. With its track base the company promoted more than 100 events annually. Seventeen of these were Nextel Cup races.

International Speedway Corporation was diversified across the racing industry. The company owned and operated (i) , Inc. (MRN Radio) the nation’s largest independent sports radio network, (ii) DAYTONA USA, the official tourist attraction of NASCAR, and (iii) Americrown and Motorsports International, providers of catering services, food and beverage concessions, and producers and marketers of motor sports merchandise. Each of the company’s segments has seen a surge in growth commensurate with the popularity of the sport. Exhibit 2 provides 1999–2003 income statement data for each line of the company’s operations. Exhibits 3 and 4 provide Balance Sheets and Statements of Cash Flows. Key revenue sources were defined by management as:

Admissions Ticket sales for all of racing events, activities at Daytona USA, and other motor sports activities and amusement.

Motor sports related income Television, radio and ancillary rights fees, promotion and sponsorship fees, hospitality rentals, advertising rentals, royalties from licenses of ISC trademarks, and track rentals.

Food, beverage, and merchandise income Revenues from concession stands, hospitality catering, direct sales of souvenirs, programs and other merchandise, and fees paid by third-party vendors for the right to occupy space to sell souvenirs and concessions at ISC facilities.

A new television contract effective in fiscal 2001 nearly quadrupled the broadcast revenues for the industry and has likewise had a material impact on ISC. Historically, each track was obligated to negotiate its own television contract independent of all other tracks. In keeping with tradition, NASCAR executives convinced track owners that a single contract was in their best financial interests. A seven-year, $2.8 billion deal with three networks (FOX, NBC, and TNT) was brokered. Commencing in 2001, NASCAR allocated television revenue to the individual tracks and race team owners under separate agreements. The aggregated industry percentages were fixed, but the allocations to each race track varied.3

Fueled by increased television revenue and expanded viewership, profits from continuing operations for ISC have almost doubled in the four years ending November 30, 2003. With an average ticket price of about $70 and capacity crowds at virtually every major event, growth in all business lines has far outstripped even the most aggressive forecasts. The 2003 Management Discussion and Analysis (MD&A) of ISC provided clear insights into the sources of the

3 The allocation of television rights was as follows: NASCAR retained 10 percent of the gross broadcast rights fees allocated to each NASCAR NEXTEL Cup event as a component of its sanction fees. The remaining 90 percent was allocated to the promoter. The event promoter paid 25 percent of the gross broadcast rights’ fees allocated to the event as part of awards to the competitors.

-4- UVA-C-2222

company’s growth. Exhibit 5 summarizes the key components of ISC’s profitability and risk profile across the three-year period ending November 30, 2003. Exhibit 6 provides a summary of some of the more relevant excerpts from the MD&A.

A Family Business

A most unique feature of NASCAR is that it is a private governing body 100 percent owned and controlled by the direct heirs of Bill France (see Exhibit 7). In this respect auto racing is like no other major sporting league in the country, as a single family controls both regulation and prize distribution. Bill France, Jr. succeeded his father as chairman in 1972, and in 2003 was himself succeeded by his son, Brian. NASCAR continues to be headquartered in Daytona Beach.

As of year-end 2003 International Speedway Corporation was publicly traded (NASDAQ: ISCA), and over 60 percent of voting shares were controlled by members. The company was headquartered in Daytona, in the same office complex occupied by NASCAR. The president of ISC was , daughter of Bill France Jr. The CEO was , Bill Jr.’s younger brother. While the France name undoubtedly had helped each reach their respective executive positions, they were not mere figureheads. Lesa, for instance, was honored by Street & Smith’s SportsBusiness Journal as “Female Sports Executive of the Year.” Brian was largely credited with negotiating the industry’s most recent television contract.

International Speedway Corporation’s dependence on NASCAR was also no secret, as evidenced by the following excerpt from the company’s 2002 MD&A:

Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction events at our facilities, particularly with NASCAR, whose sanctioned events at our wholly-owned facilities accounted for approximately 84% of our revenues in fiscal 2002. In January 2003, NASCAR announced it would entertain discussions with track operators regarding potential movement of NASCAR Winston Cup dates to larger markets where there may be greater demand resulting in an opportunity for increased revenues to the track operators. These schedule changes could be phased in beginning in fiscal 2004. In addition to the potential positive financial impact for the track operators, NASCAR anticipates the sport’s broadcast and corporate partners could benefit from the additional exposure generated as the events are moved into under-served areas of the country. We believe this could be a significant development and could enhance shareholder value for companies involved in the sport, and we plan to discuss opportunities with NASCAR in the coming months.

Concentration of ownership certainly had its advantages, but they came at some cost. In 2003, ISC and NASCAR were sued by a shareholder of Speedway Motorsports (SMI; ticker TRK), a primary competitor and second only to ISC in terms of NASCAR-sanctioned events that ran at company-owned tracks. The suit claimed antitrust violations given the related parties of

-5- UVA-C-2222 both ISC and NASCAR. The suit specifically claimed NASCAR events were unfairly rewarded to ISC tracks, with implications that some expect might force the France family to divest its holdings. When the suit was filed, ISC viewed it as brought without merit:

The portion of this suit that is brought against us alleges that we conspired with NASCAR to “refuse to offer a new Winston Cup race date to any non-ISC owned track whenever ISC has desired to host an additional Winston Cup race.” The complaint seeks unspecified monetary damages from ISC that are claimed to have resulted to Speedway Motorsports from the alleged conspiracy as well as treble damages under the anti-trust laws. Fact discovery is now complete pursuant to the current pretrial scheduling order and expert discovery is expected to be completed shortly. Based upon the totality of the evidence adduced in support of the position of the plaintiffs during the discovery process when considered in light of the various rulings by the court on various pre-trial, discovery and procedural matters we believe that the ultimate likelihood of a material adverse result for us is remote. We intend to continue to vigorously pursue our defense of the matter. The fees and expenses associated with the defense of this suit are not covered by insurance and could adversely impact our financial condition or results of operations and cash flows, even if we ultimately prevail. Further, the time devoted to this matter by management and the possible impact of litigation uncertainty on business negotiations occurring prior to resolution of this matter could also adversely impact our financial condition or results of operations and cash flows. Finally, even if the direct effect of the resolution of this case does not result in a material adverse impact on us, it is possible that the resolution of this case could result in industry-wide changes in the way race schedules are determined by sanctioning bodies, which could indirectly have a material adverse impact on us (2003 Annual Report).

Drivers did not stay above the fray. Jeff Gordon, the sports most successful active driver, agreed that concerns over concentrated ownership and regulation had merit. He was also quick to acknowledge, however, that what the France family had accomplished in building NASCAR “allows a lot of us to live some pretty amazing lives” (see Lowry 2004). An out of court settlement between ISC and SMI was reached in early 2004.

-6- UVA-C-2222

Sources

Helton, Mike. 2003. NASCAR President. “Issues Relating to Ephedra-Containing Dietary Supplements in Sports.” Testimony to House Subcommittee on Oversight and Investigations, and to House Subcommittee on Commerce, Trade, and Consumer Protection (July 24).

International Speedway Corporation. 2002 and 2003 Annual Form 10-Ks.

Lowry, Tom. 2004. “The Prince of NASCAR.” Business Week (February 23): 91–98.

Spencer, Lee. 2004. “Swelling costs shrink the field.” The Sporting News, February 16.

-7- UVA-C-2222

Exhibit 1

INTERNATIONAL SPEEDWAY CORPORATION

ISC Speedway Facilities

Location Acreage Age Length/Type Capacity 2004 Nextel Cup Races

Daytona International Speedway Daytona Beach, FL 440 1959 2.5 tri-oval 168,000 (2) 2/15; 7/3

Talladega Superspeedway Talladega, AL 1,435 1969 2.66 tri-oval 143,000 (2) 4/25; 10/3

Michigan International Speedway Brooklyn, MI 1,180 1967 2.0 D oval 136,000 (2) 6/20; 8/22

Richmond International Speedway Richmond, VA 635 1946 0.75 D oval 104,000 (2) 5/15; 9/11

California Speedway Fontana, CA 566 1997 2.0 D oval 92,000 (2) 5/2; 9/5

Kansas Speedway Kansas City, MO 1,000 2001 1.5 tri-oval 80,000 (1) 10/10

Phoenix International Speedway Phoenix, AZ 598 1964 1.0 mile oval 75,000 (1) 11/7

Homestead-Miami Speedway Homestead, FL 404 1995 1.5 oval 65,000 (1) 11/21

North Carolina Speedway Rockingham, NC 300 1990 1.017 oval 60,000 (1) 2/22

Darlington Raceway Darlington, SC 230 1950 1.37 egg oval 59,000 (2) 3/21; 11/14

Watkins Glen International Watkins Glen, NY 1,377 1956 2.45 road 35,000 (1) 8/15

Nazareth Speedway Nazareth, PA 283 1986 1.0 tri-oval 37,000 (0)

Sources: 2003 ISC 10-K and www..com.

-8- UVA-C-2222

Exhibit 2

INTERNATIONAL SPEEDWAY CORPORATION

ISC Five year Selected Income Statement Data (year ended November 30)

(in thousands) 2003 2002 2001 2000 1999 Revenues: Admissions, net $ 210,535 $ 213,255 $ 214,494 $ 192,789 $ 133,897 Motorsports related income 284,902 259,609 238,208 175,809 115,570 Food, beverage and merchandise 74,199 70,396 70,575 66,880 46,668 Other income 6,109 7,292 5,233 4,952 2,587 Total revenues 575,745 550,552 528,510 440,430 298,722

Direct expenses: Prize monies and NASCAR fees 107,821 97,290 87,859 71,260 45,615 Motorsports related expenses 102,231 99,441 98,458 82,230 51,590 Food, beverage and merchandise 41,250 38,109 38,251 38,448 25,539 General and admin. expenses 85,773 80,325 79,953 75,030 54,956 Depreciation and amortization 44,171 41,154 54,544 51,150 25,066 Homestead-Miami reconfiguration 2,829 Total expenses 384,075 356,319 359,065 318,118 202,766

Operating Income 191,670 194,233 169,445 122,312 95,956

Interest income 1,821 1,211 3,446 6,156 8,780 Interest expense (23,179) (24,277) (26,505) (30,380) (6,839) Equity method income 2,553 1,907 2,935 (631) (1,819) Minority interest 992 (100) (796) North Carolina Speedway litigation (5,523) Income before tax 172,865 173,074 150,313 91,834 95,282 Provision for taxes 67,417 66,803 62,680 41,408 38,669 Cumulative effect of accntng change (517,249)

Net income 105,448 (410,978) 87,633 50,426 56,613 Source: 2003 ISC 10-K.

-9- UVA-C-2222

Exhibit 3

INTERNATIONAL SPEEDWAY CORPORATION

ISC Three year Selected Balance Sheet Data (as of November 30) (in thousands) 2003 2002 2001 Assets Cash & Equivalents 224,174 109,463 71,204 Receivables Net 37,996 30,557 25,142 Inventories 5,496 4,799 4,583 Other Current Assets 4,078 3,784 6,466 Total Current Assets 271,744 148,603 107,395

Investments in Unconsol Subsidiaries 33,706 31,152 32,667 Other Investments 0 0 1,263 Property, Plant & Equipment - Gross 1,120,295 1,051,529 1,008,507 Accumulated Depreciation 235,672 192,433 152,688 Property, Plant & Equipment - Net 884,623 859,096 855,819

Other Assets 113,719 117,120 705,002

Total Assets 1,303,792 1,155,971 1,702,146

Liabilities & Shareholders’ Equity Accounts Payable 15,739 17,506 14,918 Current Portion LT Debt 232,963 5,775 9,225 Income Taxes Payable 6,877 3,939 -- Other Current Liabilities 120,926 109,283 111,723 Total Current Liabilities 376,505 136,503 135,866

Long Term Debt 75,168 309,606 402,477 Deferred Income 11,894 11,709 11,709 Deferred Taxes 113,414 74,943 115,711 Other Liabilities 346 885 961 Total Liabilities 577,327 533,646 666,724

Common Equity 726,465 622,325 1,035,422

Total Liabilities & Shareholders’ Equity 1,303,792 1,155,971 1,702,146

Source: 2002 and 2003 ISC 10-K.

-10- UVA-C-2222

Exhibit 4

INTERNATIONAL SPEEDWAY CORPORATION

ISC Three year Selected Cash Flow Data (for the year ended November 30)

2003 2002 2001

Cash Flow Provided By Operations Net Income(Loss) 105,448 (410,978) 87,633 Depreciation/Amortization 46,160 43,971 57,729 Net Increase/(Decrease) In Assets/Liab. 4,418 2,452 (8,648) Special Noncash Items - 517,249 - Other Adjustments -- Net 38,710 25,920 23,972 Net Cash Provision (Used) By Operations 194,736 178,614 160,686

Cash Flow From Investing Activities Purchases Property, Plant & Equip. (72,587) (53,521) (98,379) (Acq.) Disp. of Subs. Business - - (3,878) (Inc.) Decr. in Securities Invest. - 13,200 32,728 Other Cash Used By Investing 2,701 - (2,425) Net Cash Provision (Used By Investing (69,886) (40,321) (71,954)

Cash Flow From Financing Activities Issue (Purchase) Of Equity (352) (831) - Issue (Repayment) Of Debt - - - Incr.(Decr.) In Borrowing (6,595) (96,012) (67,355) Dividends, Other Distribution (3,193) (3,191) (965) Net Cash Prov. (Used) by Financing (10,140) (100,034) (68,320)

Effect of Exchange Rate on Cash - - - Cash or Equivalents at Year Start 109,263 71,004 50,592 Cash or Equivalents at Year End 223,973 109,263 71,004 Net Change in Cash or Equivalents 114,710 38,259 20,412

Source: 2003 ISC 10-K.

-11- UVA-C-2222

Exhibit 5

INTERNATIONAL SPEEDWAY CORPORATION

ISC Three-year Profitability and Risk Analysis

PROFITABILITY ANALYSIS ROA 11/30/03 11/30/02 11/30/01 9.72% 8.48% 6.12% | | PM for ROA Turnover 11/30/03 11/30/02 11/30/01 11/30/03 11/30/02 11/30/01 21.0% 22.3% 19.7% 0.46 0.38 0.31

Cogs% (total) 44.1% 43.2% 42.9% 16.62 19.51 22.24 AR Turnover Components: 48.82 50.06 59.16 Inventory Turnover Admissions 51.2% 45.6% 41.0% 0.65 0.63 0.63 Fixed Asset Turnover Motorsports 35.9% 38.3% 41.3% 29.44 26.00 22.58 Days Operating Cycle Food/Bever 55.6% 54.1% 54.2%

SGA% 15.1% 14.8% 15.3% Dep/Amt% 8.1% 8.1% 11.0% Int% 4.1% 4.5% 5.1% Tax% 11.8% 12.3% 12.0%

ROE 11/30/03 11/30/02 11/30/01 15.64% 12.82% 8.82% | | ROA Com. Ern Lev Cap Struc Lev 11/30/03 11/30/02 11/30/01 11/30/03 11/30/02 11/30/01 11/30/03 11/30/02 11/30/01 9.72% 8.48% 6.12% 0.88 0.88 0.85 1.82 1.72 1.70

RISK ANALYSIS 11/30/03 11/30/02 11/30/01 Short Term Liquidity Risk Current Ratio 0.72 1.09 0.79 Quick Ratio 0.60 0.80 0.52 CFO to Current Liabilities 0.52 1.31 1.18 Days A/R 21.96 18.71 16.41 Days Inventory 7.48 7.29 6.17

Long-term Solvency Risk Debt Equity Ratio 0.10 0.50 0.39 Interest Coverage Ratio 8.46 8.13 6.67 CFO/CapX 2.68 3.34 1.63 CFO to Total Liabilities 0.35 0.30 0.23

-12- UVA-C-2222

Exhibit 6

INTERNATIONAL SPEEDWAY CORPORATION

ISC Discussion of Fiscal Year 2003 Performance compared with 2002 (Source: 2003 10-K, Management Discussion and Analysis)

Fiscal 2001 was our first year under NASCAR’s multi-year consolidated television broadcast rights agreements with NBC Sports, Turner Sports, FOX and FX. These agreements cover the domestic broadcast of NASCAR’s entire Winston Cup (NEXTEL Cup beginning in 2004) and Busch series racing seasons from 2001 through 2006. As a result, our combined television broadcast and ancillary rights revenues increased approximately 84% in fiscal 2001, approximately 15% in fiscal 2002, approximately 17% in 2003 and are expected to increase approximately 21% in fiscal 2004 as compared to the respective prior fiscal years. We expect media rights revenues, as well as variable costs tied to the percentage of broadcast rights fees required to be paid to competitors as part of NASCAR NEXTEL Cup and NASCAR Busch series sanction agreements, to continue to increase based on NASCAR’s announcement that the annual increase in the domestic television rights fees will range between 15% and 21% from 2001 through 2006. Television broadcast and ancillary rights fees received from NASCAR for the NASCAR Winston Cup and NASCAR Busch series events conducted at our majority-owned facilities were $116.0 million, $133.8 million and $156.4 million in fiscal years 2001, 2002 and 2003, respectively.

During fiscal 2003, inclement weather, and the threat of inclement weather, adversely impacted many of our major events including:

• Several events during Speedweeks 2003, including the Daytona 500; • The February NASCAR events at North Carolina, including its NASCAR Busch Series event, which was rescheduled to the following Monday; • The March motorcycle events at Daytona International Speedway (“Daytona”), including the Daytona 200 Superbike event, which was rescheduled to the following Monday; • The March NASCAR events at Darlington, including its NASCAR Busch Series event, which was rescheduled to the following Monday; • The April NASCAR events at Talladega Superspeedway (“Talladega”) where we believe race week sales were impacted by the threat of inclement weather; • The August events, including the NASCAR Winston Cup Series event, at Watkins Glen International (“Watkins Glen”); and • The November CART Champ Car and supporting events scheduled at California, which were postponed and later cancelled due to a state of emergency declared in San Bernadino County, California and surrounding counties as a result of wildfires in the region.

In addition, we believe that the economic downturn, coupled with ongoing geopolitical issues, have had a significant negative impact on attendance-related revenues in fiscal 2003.

Admissions revenue decreased from approximately $ 213.3 million to approximately $210.5 million, or 1.3%, in fiscal 2003 as compared to fiscal 2002. This decrease was primarily attributable to the cancellation of the CART Champ Car weekend and other instances of inclement weather, as well as the impact of general economic and geopolitical conditions as described above. These decreases were partially offset by increased seating capacity at Richmond and Kansas and increased attendance at several events including the NASCAR Winston Cup weekend at the newly reconfigured Homestead-Miami Speedway (“Miami”). Our Miami track was reconfigured prior to its

-13- UVA-C-2222

2003 NASCAR events in order to increase the track banking to a maximum of 20 degrees in the turns through an innovative variable-degree banking system, which succeeded in enhancing the quality of the racing entertainment at this facility.

Motorsports related income increased approximately $25.3 million, or 9.7%, in fiscal 2003 as compared to fiscal 2002. Substantially all of the increase was attributable to the television broadcast rights fees for the NASCAR Winston Cup and NASCAR Busch series events conducted during the year. Hospitality, sponsorship, advertising, track rentals and licensing revenues also contributed to the increase. These increases were partially offset by the cancellation of the CART Champ Car weekend at California and a decrease in the entitlement fees for the August NASCAR Winston Cup event at Michigan International Speedway (“Michigan”).

Food, beverage and merchandise income increased approximately $3.8 million, or 5.4%, in fiscal 2003 as compared to fiscal 2002. Our Americrown subsidiary’s assumption of food concession and catering operations at California, which were operated by a third party vendor that paid California a commission in prior years, a non-recurring $1.6 million payment related to our ongoing activities to audit third party vendors and the Dale Earnhardt Tribute Concert at Daytona contributed significantly to the increase during fiscal 2003. These increases were partially offset by the lower food, beverage and merchandise sales attributable to previously discussed attendance decreases.

Prize and point fund monies and NASCAR sanction fees increased approximately $10.5 million, or 10.8%, in fiscal 2003 as compared to fiscal 2002. Over three-quarters of the increase was due to increased prize and point fund monies paid by NASCAR to participants in events during the periods. Over one-half of these increases were attributable to the increased television broadcast rights fees for the NASCAR Winston Cup and NASCAR Busch series events conducted during fiscal 2003, as standard NASCAR sanctioning agreements require that a specified percentage of broadcast rights fees be paid to competitors.

Motorsports related expenses increased approximately $2.8 million, or 2.8%, in fiscal 2003 as compared to fiscal 2002. The increase was primarily related to increases in consumer marketing initiatives and event related costs for comparable events, including insurance, as well as expenses related to the Dale Earnhardt Tribute Concert at Daytona, partially offset by the cancellation of the CART Champ Car event weekend. Motorsports related expenses as a percentage of combined admissions and motorsports related income decreased from approximately 21.0% in fiscal 2002 to approximately 20.6% in fiscal 2003 primarily due to the increase in television broadcast rights fees and the cancellation of the CART Champ Car event weekend, partially offset by the previously discussed increased costs.

Food, beverage and merchandise expense increased approximately $3.1 million, or 8.2%, in fiscal 2003 as compared to fiscal 2002. Costs associated with our Americrown subsidiary’s assumption of food concession and catering operations at California, which were operated by a third party vendor that paid California a commission in prior years, and expenses related to the Dale Earnhardt Tribute Concert at Daytona contributed significantly to the increase during fiscal 2003. These increases were partially offset by decreased product and other variable costs associated with previously discussed decreases in sales associated with lower attendance at certain events. Food, beverage and merchandise expenses as a percentage of food, beverage and merchandise income increased from approximately 54.1% in fiscal 2002 to approximately 55.6% in fiscal 2003. This margin decrease was primarily attributable to the expenses related to the assumption of food concession and catering operations at California, holding certain retail price points constant despite increasing product costs, and the relationship of decreased sales to certain fixed costs. This decrease was partially offset by the previously discussed non-recurring income related to our ongoing activities to audit third party vendors’ sales reports for prior years.

General and administrative expenses increased approximately $5.4 million, or 6.8%, in fiscal 2003 as compared to fiscal 2002. The increase was primarily attributable to costs associated with certain ongoing legal proceedings (see Item 3. “Legal Proceedings”), a write-off related to our claim for the return of the sanction fee paid to CART for the cancelled CART Champ Car event (as described below), and other expenses related to the expansion of our ongoing business, partially offset by decreases in certain other operating expenses and professional fees.

-14- UVA-C-2222

The cumulative effect of accounting change recognized in the first quarter of fiscal 2002 consists of the non-cash after-tax charges associated with our write-off of goodwill, as well as the write-off of goodwill by Raceway Associates, upon adoption of SFAS No. 142 on December 1, 2001.

-15- UVA-C-2222

Exhibit 7

INTERNATIONAL SPEEDWAY CORPORATION

The France Family: ISC and NASCAR

William “Big Bill” France, Sr., deceased Founder of NASCAR, 1947. Chairman and CEO of NASCAR, 1947-1972. Founder and first President, International Speedway Corporation, 1957.

Anne France, deceased Wife of Bill France, Sr. Secretary and treasurer of NASCAR. Served in the same roles for International Speedway Corporation.

Bill France, Jr., 71 Son of Bill France, Sr. Chairman of the Board, Chief Executive Officer and Director of International Speedway Corporation (ISC). Chairman and CEO of NASCAR, 1972-2003.

James France, 59 Son of Bill France, Sr. Serves as current Chief Executive Officer and past President of ISC. Member of NASCAR Board of Directors.

Lesa Kennedy France, 42 Daughter of Bill France, Jr. Serves as President and a member of the Board of Directors for ISC.

Brian Z. France, 41 Son of Bill France, Jr. Chairman and CEO of NASCAR. ISC director since 1994.