SMI recorded $512.1 million in revenue in 2016 compared to $496.4 million in 2015 thanks to “other operating revenue,” according to the Concord, N.C.-based company’s annual report.
That “other operating revenue” totaled $60.3 million compared to $31.3 million in 2015.
The “other operating revenue” came from SMI’s Bristol Motor Speedway, the venue for this weekend’s Food City 500, when it hosted a game last September between the Tennessee Volunteers and Virginia Tech Hokies billed as the “Battle At Bristol, College Football’s Biggest Ever,” including a large preceding concert. Tennessee scored 31 unanswered points on its way to a 45-24 victory over Virginia Tech.
The events took decades to put together.
“Both events were hugely successful with intense media coverage and fanfare, and now in the Guinness World Records as the highest attended (146,000, the most of any SMI facility) collegiate football game in history,” SMI reported. “ … We are actively seeking to host additional football games, although none have been scheduled at this time.”
The Tennessee-Virginia Tech game was a key bright spot for SMI because revenues from attendance to its NASCAR races and other event-related revenue were down from 2015. SMI believes a portion of the decline in attendance over the past few years is due to NASCAR’s changing demographics.
In a nutshell, SMI admits its success depends upon discretionary consumer spending, corporate spending and especially weather conditions.
“Poor weather leading up to, or forecast for a weekend that surrounds, a race can negatively impact our advance sales and walk-up admissions and food, beverage and souvenir sales,” SMI noted in its annual report.
SMI’s and NASCAR’s saving grace is that many of their future revenues are already contracted with television broadcast agreements running through 2024 with Fox Sports and NBC. These new broadcasting agreements include various “TV Everywhere” rights that allow 24-hour video-on-demand, expanded live-streaming and re-telecasting of certain races. The deal is expected to produce nearly half of SMI’s revenue this year. NASCAR valued the deal at more than $8 billion. Most of SMI’s Monster Energy NASCAR Cup, Xfinity and Camping World Truck Series event sponsorships for 2017 and beyond are also sold.
Despite ongoing economic challenges, SMI acknowledges the motorsports industry is experiencing a so-called “evolving media and entertainment consumption transformation.” The company installed three of the world’s largest high-definition video boards at BMS last year, at Texas Motor Speedway in 2014 and at Charlotte Motor Speedway in 2011.
“We also installed new sound systems and higher-end leader boards at several of our speedways,” SMI reported. “ … We are also increasingly investing in social media advertising, interactive fan ‘intelligence’ mobile phone applications, real-time marketing and entertainment, web-based applications and interactive digital systems to enhance pre-race and during-the-race entertainment experiences that appeal to our younger demographic markets.”
SMI says the NASCAR fan base is 62 percent male, while two out of five are between the ages of 18 and 44.
The family of SMI Executive Chairman Bruton Smith, 90, owns about 70 percent of the company’s stock.