Forum: HoseHeads Sprint Car General Forum (go)
Moderators: dirtonly  /  dmantx  /  hosehead

So, we have an entire thread on the demise of BMS.   One of the constant themes is who can/will purchase the track.   As it had been stated that a person that purchases a race track is an unique individual.  The other thing that is true is that it seems that BMS is overbuilt for the market that it is in.

The simple math (without any interest being charged):  If someone bought it for 10 million and was looking at a twenty year payback, the track would have to put $500,000 a year away to clear the bank note.   Which seems way ambitious.   So, lets say they have $100,000 a year to clear the bank note, at that rate it would take 100 years to break even.  

Say Chuck sits on it for a couple of years and decides to sell it at 5 million dollars.   At twenty years, the track would have to put $250,000 a year to clear the bank note.  Which again sounds ambitions.  So, lets say they have $100,00 a year to clear the bank note, at that rate it would take 50 years to break even.  Again all of this is ignoring the interest that the bank would charge.

I know that there are people who have enough money to purchase this track and do with it what they want.   I also realize that the person that buys it may not factor in the payback.  However, those people are far and few between.

My last question is what are the chances that there is a third option that has not been mentioned.   We all have heard how much money he put into the facility.   Could he part it out to help recoup his costs?  

Anybody looking to purchase a dirt track can find far better asking prices than 9.5 million.  I just did a quick search on google and came up with one example:  http://speed51.com/missouri-dirt-track-available-for-sale-on-ebay/

The article says that this Missouri track has been sitting idle since 2014 and has a price tag of $455,000.  Missouri is a little more centrally located and the weather might allow a prospective owner to squeeze a few more weeks out of the season.  I'm sure based on all the tracks that have ceased operations that there are many deals out there that are doable.  The upgrades on Husets have priced the place out of reach of any prospective buyer.  Keep in mind that most people buying dirt tracks have been hands on owners doing a lot of the work and they keep their prices in line with what the local market will support.  I don't know what this Chuck guy was thinking, if he lives in his own reality or what, but anyone familiar with the economics of dirt track racing could see the potential for problems. 

Stan Meissner

    A couple thoughts... These are my opinions. Everyone has their own opinions.

      The asking price of anything is what the owner is hoping to get for something for sale. The selling price is what something is worth, based on what the market is willing to pay for something. It's generally not a straight line between point A and point B. Think about the last time you bought or sold a car.

     If Chuck Brennen has enough money to let Husets sit idle, he has enough money to open it up in 2017 and work to make the track worth the asking price. That might involve going slower, stepping on fewer toes and working with others. Maybe Chuck isn't the right guy to have in the driver's seat, but perhaps someone else approaching things from a different angle could bring things back to life.  You have to walk before you can run.  It seems that Cuck skipped walking and running and went straight to break dancing.

     As far as parting it out- not really. A lot of the investment is things that can't be sold, like the VIP tower, utilities and all of the concrete. True, the lighting and seats could be removed and sold, but that would then make the speedway part of the property of no value. If you haven't been to Husets, the stands are built into a steep hill. The track and parking are are in the flats of a floodplain. There will never be a higher use for this piece of property.  It's either a speedway or an alfalfa field.

      Somewhere between the extremes of a speedway renovation that can't live up to it's hype and a speedway sitting empty in 2017 there is a compromise. 

I think everybody speculating on this deal knows that the asking price always exceeds the selling price in any negotiation.  What nobody knows is what he's willing to accept and the numbers are so far beyond the reality of a dirt track business model that this has got to be the highest priced dirt track of all time.  Somebody mentioned in another thread that Eldora went for a couple million so I think we'd all agree that the numbers have to come down quite a bit to even get the tires kicked to use your car sales analogy.  It will be interesting to see what that compromise ends up being.

Stan Meissner

I agree, even at 4 million, the 20 year payment would be 324K per year.  Nobody will be able to finance this, it'll have to be someone with cash to make this work.

Murphy.......sell the lake property and get negotiating!

The only dirt tracks worth what he is asking are Knoxville, Eldora and Charlotte. And that's because they have events in place that attract thousands of people each year and can generate a solid profit. 

Badlands/Husets is not in that league and it may take 5-10 years of promotion to get it there. 

The sensible solution is a lease, and maybe you could have a joint venture with the major players to promote a few Outlaw shows, and other specials. 

No one, and I mean no one is going to go into this deal looking to pay a bank note with attendance and beer sales.  It will be someone with $9.75 million upfront or the $6 million upfront with the other 6 coming down the road from some other venture.  For us to sit here and try to pencil this out so it makes sense is like trying to pencil out how a local sprint car team could hit the road and run with the WOO on prize money and tow money.  Not going to happen. 

If Chucky is able to sell, it will be to someone with the money, not someone looking for yearly supplemental income.  As said by a few others already:  few and far between.  Will someone buy it or round up investors to buy it?  Maybe.  Will they be going to the local bank for the money?  Maybe for a withdrawal.  But not a loan.  If they buy it, they know what they are getting into. 

All of that being said, I hope and pray it sells so we don't lose another track.

Hey Sarge, All Stars and IRA, Wilmot and Angell Park, Saturday and Sunday, May 20 and 21 

I'd be really curious what the Texas Motor Speedway dirt track is worth.   It would be almost identical to Charlotte's although it also has no marquee event like Charlotte does.    This is an extremely nice facility though, and too bad it's not a weekly track.    

Didn't it say in the release that the price was FIRM?   

     Everybody's price is firm until the item offered doesn't sell.

I wonder if Chuck would be willing to lease it to somebody. Even sitting idle there are still expenses involved with owning the track. Property taxes, utilities, maintanance, etc. If he values it at $9.75 million it's just a matter of time until the county decides to reassess his property taxes. You would think he would want to reduce his carrying costs.

Atlands big chance to run a track.

Only one practical solution: Everybody who reads Hoseheads forms a Powerball cooperative, kick in a few bucks, & make an ironclad death pact to invest the winnings in Huset's.... THEN we could spilt up the loot!

Oh wait, too far to drive.... never mind

I'd rather buy 34 Raceway outside of Burlington Ia. for $360,000. No concrete pits or video boards but nice aluminum bleachers with backrests that seat 5000. High banked 3/8 mile.

Beter yet......get the SD legislature to legalize parimutuel betting on sprint cars, and issue the only liscense to Huset's. That would fill the 9000 seats. At an average of $16.00 a seat the weekly take would be $144,000.00. Pay out a $44,000.00 purse and the gross ticket sales after purse is $100,000.00 per event. Run 15 events a season and thats $1,500,000.00......plus all the concessions! Take out $500,000.00 per year for overhead and such, the State gets a piece, and pay the place off inside of ten years! 

Sounds easy enough...

Get started!

I forgot.........

All the track is worth is the property it sits on and sometimes a structure is a detriment to that..

Im sure Eldora could have been sold for more if Earl wanted to pursue that route,  he had planned on giving it to his grandson.  I suspect it was sold to Stewarrt because it was Stewart and for a reasonable price with some stipulations

If you can get a major event or two, and the attendance to support it.  It can be highly profitable.  enough so that even that 10 million could be paid back in reasonable number of years.   The problem is,  Most events take years to reach the status they get to in attendance, purse and ticket price.  Tony walked into three events with a ROI probably that is ten times the purse of those events,  Dream, World and Kings Royal. with other weekends that are normally highly profitable.  He also added the Mudsumer.

Location, date (not up against other big or weekly shows in the region), sanction and tradition are so important with big events.  By way of example I live half an hour north of St. Paul, Minnesota, about 6 hours from Knoxville and around 5 from Husets.  We have made many car trips to Knoxville shows and a couple Nationals but rarely went to Husets.  I know a few hard core fans and photographers who liked hitting some of the Husets WoO dates over the years but nothing at Husets ever motivated me to burn up vacation and hundreds of dollars because it was a must see. 

I'd be willing to go out on a limb and say that it would be very difficult for a track in Brandon to ever achieve the status of any of the other big events.  I just don't think the location lends itself well to establishing that kind of a tradition, especially now that great sums of money will no longer be thrown out there to attract Sprint teams.  Keep in mind the track has been there since the mid 50's so they have had plenty of time to establish tradition at the level of a Nationals but have never done it.  Even Jackson's Nationals IMHO is a bigger tradition than anything at Husets.  Husets has been a great weekly venue that hosts a few specials every year but they never even come close to a tradition like the $50,000 to win Late Model USA Nationals at my home track Cedar Lake.  Those couple of big shows they tried at Badlands last year never got off the ground and nobody in their right mind would make a $9.75 million dollar bet that they could create a tradition in a reasonable number of years as you pointed out.

Another thing that hasn't come up in the discussion is that we all enjoy the big Sprint Car specials but the backbone of tracks like Husets without a Nationals level tradition is the local Stock Car and Modified shows week in and week.  So that I don't get blasted I'll point out a few reasons why I say that.  Competitors from those classes are local and bring friends and family through the gate every week as opposed to some Sprint team that hauls in from a couple hundred miles away once or twice a year.  I know some travel there to see Sprints but the numbers aren't even close to the consistent week in and week out numbers following their local friends and relatives in the entry classes.  Big shows like the Outlaws draw big crowds once or twice a year but they come with big sanctioning fees and that amount of money paid for one WoO race would cover a lot of B Mod purses.  Case in point, I live within an hour and a half of seven dirt tracks off the top of my head but only one of them has several traditional big events each season.  Some tracks run A Mods as their top class and aside from local 360's could never touch the cost to sanction a WoO show for example.  I think what a lot of people might not realize is that many tracks on the schedule require extra event sponsorship simply to put on a WoO show once a year.  Obviously if a promoter is out looking for help just to get them into their track it's not some huge money maker like a lot of fans seem to think it is.  I'm not familiar with Husets weekly operation over the years but I would venture to guess that someone was stepping up to help get the WoO in there.  

I'm pretty convinced that $9.75 million is an untouchable number so this deal will be interesting to see how it pans out.  My wife's aunt and uncle stopped by on Friday night.  She's from Sioux Falls area and her brother built motors for Stock Cars and Modifieds for years.  Her brother-in-law lost his life in a 360 race at Husets some years back so they've got a lot of connections to the place.  I put the bug in her ear to see if she could get an idea what the local weekly support class racers are thinking about this whole mess and what they're hearing.

Stan Meissner