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Five analysts and top management from sixteen sector firms examine the Leisure Goods & Services sector in this special 89-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info384.htm

TWST: How is the industry responding to the economic environment?

Mr. Hovorka: Because we are seeing consumers trading down and a softening in prices, we’re clearly not at the peak we were at 18 months ago. We are coming off that peak, and with that we are seeing the pricing pressure and, as I said, the trading down to lower price points.

TWST: What challenges does the industry face over the next six months or a year?

Mr. Hovorka: Certainly the macroeconomy is a large factor at this point. On the cruise side, we’re also seeing quite a bit of capacity coming online in the industry, not only this year but for the next three or four years. We’re expecting part of that capacity to be moderated somewhat by ships being moved outside of the North American market into secondary markets like Europe and Asia, which will reduce that growth rate in the North American market.

TWST: Of the two sectors that you focus on, cruise lines and motor sports, about which are you most optimistic?

Mr. Hovorka: In the near term, we’re probably more optimistic about the motor sports industry. We’re more optimistic because of a new television contract that NASCAR has signed for the broadcast of their races. That’s given particularly International Speedway (Nasdaq:ISCA) and Speedway Motorsports (NYSE:TRK) a fair amount of visibility on earnings and revenue. Because these contracts are locked in, the revenue and earnings of these companies are less variable now. Clearly, we are seeing some softness in ticket sales, particularly from corporate buyers, which is affecting revenue and earnings. But if we take a look at the cruise industry, the pricing pressure is more widespread, and in the near term, we’re seeing more challenges on the revenue front in the cruise lines than we are in the motor sports industry.

TWST: What is your rating on Speedway Motorsports?

Mr. Hovorka: Our rating on Speedway Motorsports is a strong buy.

TWST: Why?

Mr. Hovorka: The whole motor sports industry is going through a fundamental change, and Speedway is one of the largest beneficiaries of this. The fundamental change is that the company is moving away from a business model that was based largely on admissions. Under that model, in order to grow your revenue and earnings, you had to add seats and expand the number of people you could hold at a facility. That came with capital costs because you were building seats and it cost you something to build those seats. Now the company has had a dramatic shift in its business model with the new NASCAR television contract. The new model is based more on revenue being driven by sponsorship and television broadcast rights as opposed to admissions, so now you’ve got a business model that is more efficient on the capital side. You do not need to add significant incremental capital to generate more earnings and revenues from television rights. If the company could increase the rights fee on its television contract — as they have done dramatically this year -– it could increase its returns substantially. Therefore, with cash flow increases and returns on capital increases, we think the earnings multiple for Speedway Motorsports will also eventually increase.

This special issue includes:

1) Leisure Goods & Services - In an in-depth (4,100 words) Analyst Interview, Timothy Conder, Vice President at A.G. Edwards & Sons, Inc., examines the outlook for the sector and shares specific stock recommendations.

2) Leisure Industry Overview - In an in-depth (3,700 words) Analyst Interview, Hayley Kissel, Director of Merrill Lynch's Global Securities Research and Economics Division, examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Leisure Stocks - In an in-depth (3,900 words) Analyst Interview, Scott Barry, Director in Credit Suisse First Boston's Equity Research group, examines the outlook for the sector and shares specific stock recommendations.

4) Cruise Lines & Motor Sports - In an in-depth (2,600 words) Analyst Interview, Joseph Hovorka, Senior Analyst at Raymond James & Associates, examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for Cruise Lines - In an in-depth (4,100 words) Analyst Interview, Robin Farley, Executive Director in the equity research division of UBS Warburg, examines the outlook for the sector and shares specific stock recommendations.

6) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.