Business Operations

9 Months Ended

Sep. 30, 2011

Business Operations

Business Operations

NOTE 2 — Business Operations

Dover Motorsports, Inc. is a public holding company that is a leading marketer and promoter of motorsports entertainment in the United States.  Through our subsidiaries, we own and operate Dover International Speedway® in Dover, Delaware and Nashville Superspeedway® near Nashville, Tennessee.  These facilities are scheduled to promote nine major events during 2011, all of which will be under the auspices of the premier sanctioning body in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”).

In 2011, we are scheduled to promote the following major events:

· 2 NASCAR Sprint Cup Series events;

· 4 NASCAR Nationwide Series events; and

· 3 NASCAR Camping World Truck Series events.

All except two of the major events listed above were promoted during the first nine months of 2011.  A NASCAR Sprint Cup Series event and a NASCAR Nationwide Series event at our Dover International Speedway facility were promoted in October 2011.  These events were promoted in September 2010.

We derive a substantial portion of our revenues from admissions, event-related and broadcasting revenues attributable to our NASCAR-sanctioned events at Dover International Speedway which are held in May and October.  Total revenues from these events were approximately 90% of total revenues for 2010.

On August 3, 2011, we announced that our wholly-owned subsidiary Nashville Superspeedway notified NASCAR that it will not seek 2012 sanction agreements for its two Nationwide Series and two Camping World Truck Series events.  We continue to conduct the weekly events we have scheduled for the remainder of 2011 and are currently evaluating all of our options for the facility.  We incurred a non-cash impairment charge of $15,687,000 (see NOTE 4 - Impairment Charge for further discussion) and severance costs of approximately $150,000 in the third quarter of 2011 as a result of this event.  Additionally, we recorded a $2,245,000 provision for contingent obligation reflecting the estimated portion of the Wilson County bonds debt service that will not be covered by the projected sales and incremental property taxes (see NOTE 11 — Commitments and Contingencies for further discussion).

In November 2010, we announced the closing of our Gateway facility.  The Gateway facility is located on approximately 290 acres of land in Madison, Illinois and the racetrack is primarily on leased property.  We had long-term leases for approximately 150 acres with four landlords.  We also own approximately 140 acres near the Gateway facility.  In February 2011, three of the four landlords agreed to terminate the land leases in exchange for 18.5 acres of owned real estate and our agreement to abandon all improvements and certain personal property (including the racetrack) on the leased land.  See NOTE 5 — Discontinued Operation for further discussion.

We closed our Memphis Motorsports Park facility in October 2009 and executed an agreement to sell it in December 2010.  The real estate sale closed on January 31, 2011.  After closing costs and including the proceeds from the separate sale of all personal property at the facility in December 2010, our net proceeds were approximately $2,000,000.