WILMETTE, Ill. — The world’s two most successful race operators have recently gone private with their business transactions after being traded publicly for decades.

How does this change the motorsports landscape?

October 2019 will be recognized as a landmark period in the business of motorsports.  Both International Speedway Corp. and Speedway Motorsports, Inc. are no longer publiclytraded entities.

International Speedway Corp. and NASCAR announced their intention to merge late last year.  The France family offered to acquire the outstanding shares they did not own and take the company private.

The initial offer of $42 per share was raised to $45 after a set of negotiations, litigation and review by financial advisers. A set of independent directors (non-France family members) recommended approval.

A proxy vote was sent to outside shareholders and approved by a majority. As a result, shares under the ticker symbol ISCA are no longer being traded on NASDAQ.

The deal that made International Speedway Corp. a privately held company was valued at $2 billion.

ISC shares were traded publicly for more than 20 years, after the initial IPO in 1996.

Subsequent to the delisting, ISC was purchased by NASCAR and became a wholly owned subsidiary.

Speedway Motorsports’ timeline was shorter. Company officials announced a desire to go private in April.

Bruton Smith and his family offered to buy all outstanding shares it did not own, starting with an offer at $18 per share and ending up at $19.75 per share. The deal to take SMI private is valued at $800 million.

The majority of NASCAR Cup Series tracks are now under the private ownership of the France and Smith families. NAS­CAR/ISC owns 12 venues and SMI holds eight.

Why did these companies go private?

The primary reason is to face the headwinds of a competitive economic landscape.

Being able to make decisions without the scrutiny of the public markets is attractive.  Meeting quarterly analyst estimates and expenses for regulatory compliance is no longer necessary.

Decreasing attendance, declining television ratings, a challenging sponsorship environment and the uncertainty of broadcast contract renegotiation are the industry’s biggest concerns. The expiration of the tax break for motorsports facilities is also a factor.

Significant changes are being discussed about the future of the NASCAR Cup Series schedule, with a reduction in the number of races and a shorter season among the possibilities.

The broadcast contracts have been the most consistent — and largest — source of revenue for track operators. The current contract expires in 2024 and is valued at $4 billion. It pays about $800 million annually for a bundle of media rights covering NASCAR-related properties.

Uncertainty over the renegotiation of these contracts is significant due to the rapidly changing media landscape. A guaranteed increase is not a given and plateaued levels of revenue are possible.

In addition, the sponsorship model is being redesigned to offer tiered levels. Series entitlement and category exclusivity will no longer be the focus. Flexibility and bundling of rights with multiple properties will be the norm.

The key to the future is strategic flexibility. The France and Smith families are making significant commitments to the future of the sport and they have the backing of the financial institutions. They must be willing to innovate and make changes and the racing community will ultimately benefit from well-thought out decisions.