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St. Louis Post-Dispatch, November 9, 2010 column

 

 

Nicklaus: Investor believes parent firm's sale could revive Gateway International

BY DAVID NICKLAUS dnicklaus@post-dispatch.com > 314-340-8213 | Posted: Tuesday, November 9, 2010 12:25 am

Mario Cibelli feels St. Louis racing fans' pain.

As a nine-year investor in Dover Motorsports, parent of Gateway International Raceway, he has watched his shares lose two-thirds of their value. So when he heard last week that Gateway would close, he felt a kinship with the folks who used to fill the track's grandstand.

Since the announcement, there's been a lot of talk about why Gateway wasn't viable. St. Louisans weren't rabid enough about auto racing; the track was poorly configured, with difficult highway access; NASCAR never awarded St. Louis a major-league race.

Those may be contributing factors, but Cibelli thinks there's a bigger culprit. He blames Henry B. Tippie, Dover Motorsports' chairman. "We lost a lot of money on our investment, and racing fans have lost a track, because of Henry Tippie's management," Cibelli said in a telephone interview.

Like most fierce racing rivalries, Cibelli's dislike for Tippie goes back a few years. Cibelli runs Marathon Partners of New York, which owns 18 percent of Dover's shares. That makes him the biggest shareholder not affiliated with management.

Since May 2007, Cibelli has been urging Dover's board to sell the company. His website, SellTheCompany.com, features letters and other documents critical of Tippie.

He's up against a formidable opponent. Tippie has worked for the Rollins family, Dover's controlling shareholders, for nearly 50 years. The business school at the University of Iowa, where Tippie got his accounting degree in 1947, is named for him. Most importantly for Cibelli, Tippie controls more than half of Dover's shares, many of which are held in a Rollins family trust.

Cibelli maintains that all shareholders, family and nonfamily, would be better off if Tippie had sold the company a few years ago, when International Speedway Corp. of Daytona Beach, Fla., and Speedway Motorsports of Charlotte, N.C., were gobbling up competitors.

Between them, the two larger companies control 33 of the 38 races in the Sprint Cup, which is NASCAR's top series. Dover has two, both at the Dover Speedway in Delaware.

In one of his letters, Cibelli urges Dover directors to take an "if you can't beat them, join them" approach and sell to a "larger, more competitive entity."

Here's where his argument gets interesting for St. Louisans: Cibelli believes that under another owner, Gateway might still be open.

"If they had sold out to International Speedway, I don't know that Gateway would be closed," he said. "It would have had a much better chance of remaining open. If we had a strong operator with a lot of content to run through the facility, I don't think we would be in this position."

Cibelli gained support last week from a smaller shareholder, East Coast Asset Management of Essex, Mass., which sent a letter to Dover's board calling for the company to be put up for sale. East Coast estimated that Dover's management has destroyed from $150 million to $325 million of shareholder value in recent years.

If the sell-the-company crusade ever succeeds, Cibelli thinks a new owner might take a fresh look at Gateway's potential. Still, it's hard to revive a failed track, especially at a time when racing revenue is down nationally. In all likelihood, St. Louis' chance to host big-time auto racing has come and gone.

If local fans are bitter about that, perhaps they'll root for Cibelli in his ongoing battle with Dover. Reading letters from dissident shareholders isn't as thrilling as watching cars circle an asphalt track but, at the moment, it's the only motor-sports drama we have left.

 

Copyright 2010, www.STLtoday.com, 900 N. Tucker Blvd. St. Louis, MO

 

 

 

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