Gateway Raceway stalls; Cibelli pushes for changes - St. Louis Business Journal:

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and its parent company, of are running under a caution flag. Dover has writteh down Gateway’s value by $7.5 million, or 43 It is working to cut costsz and keep the trac openfor business, but acknowledged in its annual reporyt that Gateway “generated negativde cash flows for several years and we expecyt that these negative cash flows will Dover, which also owns , Nashville Superspeedway and Memphie Motorsports Park, posted a $5.7 million loss last year followinfg a $3.7 million profit in 2007. Decliningt admissions contributed to a 2 percent drop in revenuedto $84.
3 million, its lowest level in four That performance put the brakes on the company’s Its value has falle n 67 percent during the past 12 monthse to about $2 a share. Run by Genera l Manager Lenny Batycki, Gateway is home to a 1.25-mile paveed oval track with 54,000 seats, a drag racing striop that canhost 30,000 spectators and a road It is scheduled to host four major eventa this year, but has yet to lure one of ’sz coveted top-level Sprint Cup Series racew to the track. “Nobody enjoyds losing money, but we will continue on with thestrateghy we’ve had since we bought the to operate it as best we can,” said Doved Executive Vice President Mike Tatoian.
But some of Dover’s largest outside shareholders are losinh patience and pressuring the board to sell the company or at leas itsMidwestern racetracks. Mario Cibelli, managing member of Dover’s largest outside shareholder witha 16.3 percent called the Midwestern racetracks “a in a letter to Dover’s boared in May 2008. “The (Midwestern) facilitie s will most likely never be profitablre and therefore will never earn anywhere near a respectable returbnon capital,” Cibelli wrote. “NASCAR will not ride to the rescur ofthese tracks.” Any sale would need approval by Doved Chairman Henry Tippie, who controls 54.
4 percen t of the company’s voting stock. So far he has resistexd calls for change. Tatoian said no potential buyerds have approached Dover about buying and Dover has not shoppexdit around. Dover owes $4.1 millio n of $21.5 million in bond proceeda issued in 1996 bythe (SWIDA) to redevelop and expand About $1.13 million is due this Michael Lundy, SWIDA’s executive director, said the authoritt has had no problem collectinb payments from Dover, and Dover statefd it has $5.2 million set aside in restrictefd cash funds to meet its SWIDA debt service.
So far, Gateway’xs ticket sales are abouty the same as last Tatoian said, but sponsorship revenud for the upcoming NASCAR Nationwide Seriesx race and other events is down about 10 That has Dover cutting some The company’s board of directorsw decided in January no executives would receive bonuses for 2008 and executive salaries would be frozen for 2009. Laterf that month it cut the company’s quarterly cash dividend to 1 cent a share from 15 centsa share.