Bear Stearns Launches Comprehensive Coverage of the Motorsport Industry; Bear Stearns Analyst Places a Neutral Rating on the Sector.

NEW YORK--(BUSINESS WIRE)--August 4, 1999--

Bear, Stearns & Co. Inc. leisure industry analyst and senior managing director Jason N. Ader initiated comprehensive coverage today of the Motorsport Industry with a Neutral rating on the sector in a 134 page report entitled "An Investor's Guide to Auto Racing". Mr. Ader's coverage of the industry includes all four public companies, International Speedway Corp. (ISCA), Speedway Motorsports Inc. (TRK), Dover Downs Entertainment Inc. (DVD) and Championship Auto Racing Teams (MPH).

"Despite our enthusiasm for the industry's fundamentals, we view the sector as fully valued from an investment standpoint. Our discounted cash flow valuations for the public companies in our coverage reveal that much of the anticipated growth has already been priced into the stocks," Mr. Ader said today.

The business of Motor Sports is a growing multibillion-dollar industry and the fastest-growing major spectator sport in the US in terms of paid attendance and television viewership. The primary forces behind this performance are rising television rights fees, geographic expansion into major markets (such as Las Vegas, Dallas/Ft. Worth and Los Angeles), attendance and concessions and sponsorships. Mr. Ader notes that for the publicly traded motorsport companies these growth drivers could cause earnings to expand at a compound annual rate of 15% to 20% over the next five years.

As a reference tool, "An Investor's Guide to Auto Racing" covers the entire universe of public motorsports companies and is the most comprehensive study of the industry with full discussions of the economics of the motorsports business, including the difference between NASCAR, CART and IRL races for track owners. The report provides a unique perspective of the motorsport industry with three methods of valuation: Discounted Cash Flow; Enterprise Value/EBITDA; and PE/Growth Rate. To obtain a copy of this report, please call Glen Reid at [phone].

Industry Earnings Growth Drivers

- Television Rights Fees:

Of the growth drivers fueling the motorsport industry television rights fees will have the greatest impact, Mr. Ader said. "Television rights fees are expected to show significant upside, as existing contracts come up for re-negotiation over the next few years. We expect an industry-wide gain in television rights fees to more than $300 million by 2002, up from the current level of about $100 million. We are forecasting that television fees will contribute 20% of the average track operator's revenue in 2004, almost double their share in 1999," Mr. Ader added.

- Admissions and Concessions:

Admissions and concessions compose the greatest portion of the industry's revenues, garnering nearly 60% of the total estimated for 1999. Mr. Ader expects this to decline as other sources (notably television rights) will account for a greater percentage over the next five years.

- Geographic Expansion and Sponsorships:

Geographic expansion and sponsorships are also factors as two major facilities have been built in the last three years, and corporate sponsorships have grown at a 10% compound annual rate over the past four years, to $1 billion in 1998 and should exceed $1.2 billion in 1999, Mr. Ader notes.

Investment Positives: What Will Support the Growth?

- Seating Expansion:

"Seating expansion will be quickly absorbed by fan demand which will support the growth of the industry," Mr. Ader said. In response to the surging demand for racing events, track operators have made seating expansion an integral part of their growth strategies--adding seats at a rate of 5% to 10% per year, Mr. Ader added.

- Active Industry Consolidation:

Over the past five years, the three remaining publicly traded track operators--International Speedway, Speedway Motorsports and Dover Downs--have made a total of 12 track acquisitions, including ten Winston Cup dates, Mr. Ader said.

- The Value of a Winston Cup Race:

"One of the largest barriers of entry into the motorsports business is the scarcity of the Winston Cup series races," Mr. Ader said. "The high cost of constructing a Winston Cup-worthy facility as well as zoning and environmental restrictions favor the larger track operators, all of which have established working relationships with NASCAR and have proven they can successfully host major Winston Cup events," Mr. Ader added.

Investment Risks

Mr. Ader cautions that maintaining relationships with the respective sanctioning bodies is crucial to a company's operations, particularly with NASCAR as each of its event-sanctioning agreements is awarded on an annual basis. Other investment risks include industry sponsorships and government regulation, effects of inclement weather, safety concerns and economic downturn, Mr. Ader notes.

Bear, Stearns & Co. Inc., a leading investment banking and securities trading and brokerage firm, is a major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $20.1 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers professional and correspondent clearing, including securities lending. Headquartered in New York City, the company has over 9,800 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles and San Francisco; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit our website at http://www.bearstearns.com.