Summary
International Speedway Corp is in the business of promoting, NASCAR, a sport in secular decline through a medium in secular decline (cable/network TV).
Conflicts of interest in its ownership and governance structurally handicap the stock's public float, which I believe meaningfully limits upside in the stock.
The secular threats to NASCAR are uniquely challenging, and they will leave NASCAR in a poor negotiating position for future TV rights renewals.
Introduction
International Speedway Corp (ISCA) is in the business of promoting, NASCAR, a sport in secular decline through a medium in secular decline (cable/network TV). Conflicts of interest in its ownership/governance structurally handicap the stock’s public float, which I believe meaningfully limits upside in the stock. Here’s why: The France Family owns NASCAR (private company) and a controlling stake in ISCA (~42% economic/~74% voting). ISCA owns the real estate (tracks), and NASCAR owns its brand and controls negotiations of the TV rights agreements that comprise the majority of financial benefit accruing to NASCAR and its promoters and race teams (discussed in greater detail below). To the France Family, there is much more value in NASCAR (its brand and share of rights agreement revenue) than in its stake in ISCA (which is diluted by the public float). Therefore, I believe NASCAR uses its controlling influence over ISCA to compel the near-complete reinvestment of ISCA’s cash flow into low/no-return CapEx programs...
