Daytona International Speedway Media Conference

Topics:  NASCAR, Daytona International Speedway

Joie Chitwood, III
June 18, 2013

LENNY SANTIAGO: Good morning, everyone, and welcome to today's teleconference. As I'm sure you've already read in this morning's press release, we have some very exciting news about the future of Daytona International Speedway. Joie will make a few brief comments and then we'll open the floor for questions.
JOIE CHITWOOD: Thanks, Lenny. The first thing I'd like to do is really thank the France family for their leadership, like to thank the ISC board of directors, this commitment to invest in Daytona Beach is significant and really proud that we get to be part of it. When we talk about what this meaning to our fans, it's about amenities, opportunities to enjoy the event from a different perspective, seat comfort, vertical transportation, social areas, technology, innovation. It's really the key to our future in terms of the next 50 years of providing great experiences at our venue.
One of the things that we did today was unveil a logo as part of it, which is Daytona Rising, and it's really the reimagining of an American icon. When you think about Daytona, it was built with more than just concrete and steel, it was built with a vision, determination, and most of all it was built with imagination. Imagination is what caused a small‑town service station owner to dream of creating a racetrack that was bigger, faster and more exciting than any that came before or any that's come since. Imagination is what fuels every childhood dream of one day winning the Great American Race. Imagination is what's inspired millions of fans from all over the globe to climb into our grandstands and witness some of the greatest moments in motorsports history; it's a reimagining of what a race experience can be, blending the modern amenities that fans expect today with the heritage that race fans expect from Daytona.
Everything about the race experience from seating to concessions to merchandise to conveniences will be reimagined to create the world's first true motorsports entertainment complex. Just as the Speedway did more than five decades ago, Daytona Rising will harness the power of imagination and reimagine an American icon in the process.
We're going to have a groundbreaking on July 5th at 10:00 a.m. Friday of the Coke Zero weekend in which we officially put that first shovel in the ground, and of course we're going to do it in Daytona fashion, which means it'll be big and bold. So just excited after 12 months of a lot of hard work that we reached this point in which we have an approved project, and today is Day 1 of 927 days that will get us to January 1st of 2016 with this reimagination of an American icon. I'm ready to take questions.

Q. Joie, thanks for taking the time for us. I'm curious, by decreasing capacity to 101,000, what do you think might happen to ticket prices? I think if people have fewer seats that might take them tend to believe that ticket prices could go higher. Obviously there's the cost of the project itself, and most of your Backstretch seats were kind of under $100 for the Daytona 500. You have very few seats at that price on the Frontstretch, and I was curious whether you've gotten even that far trying to figure out what the impact of that might be.
JOIE CHITWOOD: You know, we have, and that's a great question. For us, we understand the commitments to the fan. We've got to readjust our pricing mix so that we have affordable seats on the Frontstretch, and we're committed to doing that. We're committed to making sure that our fans can continue to bring in coolers, all of their own food and drink, and committed to continuing our free parking in our Lots 7 and 10. Just because we're going to make this huge investment in our property, we're not going to transfer that downstream to our fans. We think there's going to be some new opportunities for us as it relates to sponsorship, hospitality and the other amenities that we offer, but we're not going to turn around and leverage our ticket prices. We know that our fans need some good entry‑level pricing and we will have to reprice the mix so we have some of those opportunities on the Frontstretch. That was something we discussed early on in the process and we're committed to in this redevelopment, making sure our fans still enjoy some of those opportunities. Decent‑priced tickets, the cooler, the parking, those are the things that get people to attend events. We're not going to go the other way.

Q. And I was also wondering if you made any changes to seating arrangements or where seats are placed in light of the crash in Daytona in February.
JOIE CHITWOOD: So for 2014 there will be no changes to any seats that we have, the Frontstretch or the Backstretch.
We will then start to go through the process in '15 of some relocation, communication to our fans, and understanding what seating mix we have. But for '14 there will be no changes. We spent some time between Speedweeks and now making the improvements to the gates, and that was through our study with HNTB and then the review by Walter P. Moore. But for 2014 there will be no changes to the current footprint that we have. But as we get closer to '15 we'll start communicating what kind of experience, if there's relocation if any and what kind of seats we have at that point. It's going to be significant in '15 in terms of that mix.

Q. Just curious as to the groundbreaking is supposed to take place on July 5th, and I did the story in reference to you are going to be doing some outreach to local companies, minority firms, women firms, when construction and contracts are awarded. When will that process begin?
JOIE CHITWOOD: That'll happen here in the near term. Now that we have an approved project, and that was approved last Friday, we now can have Barton Malow take the next steps of having open houses and opportunities in this community to find all of the vendors that would be willing to participate and making sure that they're qualified and all those elements. But up until Friday we did not have an approved project, so we weren't really able to get into the marketplace and offer that. But that should happen in the next couple months.
The groundbreaking on July 5th will be ceremonial and we'll have some fun with it, but the next Monday we will start to see some equipment out here, and the initial phases that we'll go through are underground and utility work. We don't see major structure on the property really until 2014. The latter half of '13 is really going to be kind of the internal things that you do to get ready for massive investment.
But Barton Malow will be reaching out shortly. That was one of the elements in our relationship with them that we thought was important is to reach out to the local community and offering the opportunity to participate.

Q. And Barton Malow, they are a‑‑
JOIE CHITWOOD: They're a general contractor. They have offices all over the United States. They have an office in Orlando.

Q. Joie, since you've been to Daytona and actually other places you've been to, also, you've been at the forefront of a lot of change. You've done the repave at Daytona. Could you talk a little bit about handling the change and what that does to you and your staff?
JOIE CHITWOOD: Thanks for the question. I'm not sure if our staff knows any different. We know that here running Daytona we're under the spotlight and there's a lot of opportunity with that. I'm just excited that I have the chance to be a part of something that's so unique, and I think about 50 years ago what it took to build the property. Here we are talking about this reimagination, the next 50 years, but I've had the opportunity to be part of building a property in Joliet, Illinois, the Chicagoland Speedway when we turned farmland up there into the racetrack. I had a chance to be at Indianapolis and put all the plans together for the Centennial. I've had a chance to be here at Daytonas as it went through the repave, and now with this next 50 years.
So I think our team is well prepared for this. We're excited by the opportunity. Make no mistake, it will be a challenging 927 days because we have to operate the venue, plan for the Daytona 500, plan for Supercross, plan for the Rolex 24, but we also have to keep an eye on the construction process, make sure we're communicating to our fans. So I don't expect any of us to get any sleep for two and a half years, and maybe we'll catch a break in 2016 at some point. But it's going to be a great challenge and I think one that our team is really looking forward to.

Q. What do you think the initial fan reaction is going to be once it's all complete?
JOIE CHITWOOD: I would hope that our fans would be thoroughly impressed with the attention to detail that we'll take, that we're investing private money to improve the experience, but we're also cementing the World Center of Racing's status well into the future. At the end of the day we want fans to attend events. That's the world we live in, so when we make these improvements with vertical transportation and all of these technology and innovation enhancements, the neighborhood to provide the social experience. More comfortable seating, I think we're going to give our fans more reasons to attend events in Daytona and make sure that if they're going to go to one NASCAR race they come to the Daytona 500.

Q. Compared to the plans you discussed back in February during Speedweeks, what are the significant changes that you're not going to be able to do, and what will fans notice when they come in in February of 2014?
JOIE CHITWOOD: Absolutely. So we're still disappointed in terms of being in Tallahassee this past year and the inability to have a partnership with the state. One of the things that we had to do is look at our scope, and one of the things that we took out of scope was the major overhaul of the midway area. The midway area is all of the ground between the actual fence, or the gates, and the International Speedway Boulevard. And so we're going to have to deal with that from a temporary perspective. We cannot make any permanent infrastructure improvements to that area.
I am proud to say we've been able to maintain all of the amenities that we wanted to add in the grandstand structure in terms of the entrance statements, the vertical transportation, seat comfort, the additional points of sale, restrooms, all of those elements. But the significant thing that we had to reduce was the outside area, which was the midway. I hope to keep that on the agenda for the future. I will continue to work with our friends in Tallahassee. I do believe we have a great story to tell. I do believe that we should be treated more fairly like the other sports properties in terms of sales tax rebate, and so I will continue to visit Tallahassee frequently to make sure all of our friends up there know how special Daytona is and that this company is making a huge investment in its hometown, which is going to benefit not just Volusia County, it's going to benefit Central Florida, it's going to benefit Florida, and those are the kinds of companies that I think our friends in Tallahassee should take the time to visit with.

Q. In light of the accident that happened during Speedweeks, can you talk about which parts of the design keep an eye to upgrading the safety?
JOIE CHITWOOD: Well, we had a press conference a little bit earlier, maybe a month and a half ago, in which we talked about the improvements that we made specifically for the Coke Zero and for the events moving forward. We made improvements at Talladega and Daytona, and that was hiring HNTB, an engineering firm, to come in and review our fences, specifically the gate areas, and then we also brought in another engineering firm, Walter P. Moore, to review that, so we've made those enhancements to the gate structures for the upcoming events. Currently as we design the bigger structure, the grandstands, we'll take into account any information that came from those engineering studies with our fencing, but we acted very swiftly in terms of the improvements that we needed to make so that we could be comfortable running events here, and that's what we did to be ready for the Coke Zero 400.
We'll continue to look at safety moving forward. It's always a top priority. We want our fans not only to have a great experience when they visit Daytona but have a safe experience, and we're going to continue to look to improve every step along the way.

Q. In the release it talked about 2014 major event dates being run pretty much according to schedule. I was curious if you could look ahead to 2015 and would you anticipate having to move, I guess, either of your big NASCAR weekends because of the construction?
JOIE CHITWOOD: Well, you know, right now we're trying to get really that full schedule complete in terms of what we'll have available. '15 will be a significant year in which we go back in and really work on the current seats that we have. '14 will be focused on the new structure that will be built behind and above what we currently have, and so right now my visibility is only for '14 in the fact that we won't change the seating mix or count, meaning the Superstretch and the Frontstretch will be the same, and there might be some challenge in terms of getting our fans through the property to their seats, but we don't anticipate any changes to the events. '15 is a little bit far away right now to have good visibility, but we're working on that right now to try and make sure that we've got that under our belt, and obviously if we're going to do anything different with what we do, we'll let everybody know.
But right now we're just trying to get through '14 with a good plan and then we'll focus on 15.

Q. And are you getting rid of the Backstretch grandstands because of the cost it takes to maintain and run those, and if you're going to have ‑‑ I would assume you'd have wi‑fi, it would cost there, too, or are you getting rid of them because it just looks bad when they're empty?
JOIE CHITWOOD: Well, I think the key for us is we want every fan when they attend to have the same great experience, no matter where you sit. And the way to do that is to focus on the Frontstretch and provide all of those opportunities, which is why we would take down the Superstretch, because we cannot provide the same experience back there that we can provide on the Frontstretch, and that's the key; no matter if you sit in the first row or the top row or the middle, we want you to have the same access to all the amenities, whether it's the neighborhoods, the social space, vertical transportation, and we can do that on the Frontstretch so that every fan has that experience, and that's why we're going to take down the Superstretch. We can't offer the same amenities and experiences back there that we can on the Frontstretch, and we think by doing that it'll be better for everybody long‑term in terms of their experience and enjoying the Daytona International Speedway.

Q. Did you get feedback from people on the Backstretch stands that they didn't have a good experience or they just didn't feel like they had a full experience?
JOIE CHITWOOD: One of the things about the Backstretch, you feel disconnected from the venue in terms of the pre‑race experiences, the other events that we have, and in terms of the amenities that we offer, the ability to get to the midway area, the displays, the merchandise, and so that was one of the factors as we went through this is listening to the fans about what it's like back there and making sure, again, if you're a fan and you plan and make a huge investment to come to Daytona, we want to make sure that you get everything, and we can do that by getting you on the Frontstretch, and that's really why we're going to remove the Superstretch because we can't offer all of those things back there that we do on the front.
LENNY SANTIAGO: Thank you, operator, and thank you to members of the media for joining us today.