Hobby or Business? A Racetrack for Sale
(FORTUNE Small Business) – Springport Speedway SPRINGPORT, MICH.
OWNED Jointly held by five partners FOUNDED 1989 PRICE $725,000
WHAT YOU GET The purchase price gets you 70 acres and newly renovated facilities, including the three-eighths-mile banked asphalt track with new concrete retaining walls, a 6,500-seat grandstand, administrative offices, two concessions buildings, storage units, support vehicles, kitchen equipment, and just about everything else you need to get up and running--even admission tickets.
THE COMPANY If you like speed but hate the corporate fast track, then Springport Speedway may be the right business for you. This Nascar-style auto raceway in southern Michigan was built in 1989 by a retiree and racing fan. April through September, the speedway holds weekly races for three classes of cars--super-late models, modifieds, and street stocks--and a guest series of races for other short-track racing models like sprint cars and Michigan Legends. In 1999 the original owner sold the business to several local businessmen. They were absentee owners who hired managers to operate the cash-driven racetrack--a mistake that nearly drove the company into the ground. Wanting to steer the company off its crash course, the owners closed the gates for a year and invested $300,000 in renovations to bolster business.
THE NUMBERS Springport Speedway's current asking price was reduced from $950,000. Based on Michigan's property-tax calculations, the property is undervalued at $725,000. (Property-tax value in Michigan equals 50% of a property's true cash value, and the state's tax appraisal of the property was a little more than half of the track's price.) Local raceways tend to range in price from $200,000 to $1 million, claims Roger Rumble, one of just a handful of racetrack brokers in the country. Pricing includes factors like the condition of the course, the number of seats (you can assign $10 for each one), and the value of buildings on the premises. Since Springport has 6,500 seats in the grandstand and newly revamped facilities, the asking price seems reasonable. Still, the renovations have kept the raceway idle for a year, and it will take some marketing to draw a breakeven crowd, which the current owners estimate at 2,000. Before the 2001 remodeling, the track grossed about $750,000, and each event drew around 1,000 spectators.
UPSIDE Nascar racing is one of the fastest-growing spectator sports in the country, so under the right management Springport Speedway should easily draw several types of customers. With Michigan International Speedway less than 40 miles from Springport, racing fans are almost always nearby. Plus the track is just 30 miles or so from the cities of Lansing, Jackson, and Battle Creek. Creative marketing could get nearby companies to use the Speedway as an offbeat locale for employee outings. And done right, a new owner should be able to get advertisers to plaster their brands and billboards all over the track's facilities.
DOWNSIDE You can pretty much kiss your summer vacation goodbye. Buying this business requires incorporating it into your lifestyle. Plus ticket and concession sales mean that cash has driven and will continue to power the bottom line, so a new owner would need to keep close tabs on the coffers from day to day. And since Michigan's winter temperatures aren't exactly balmy, you'd have to limit the track's operating season to six months of the year. --Jennifer Keeney
FSB does not make any representations regarding the accuracy of information provided by the seller. Interested readers should conduct their own investigation of the business and contact Sherry Kang at USBX 310-315-6700.