Via Fed-Ex and Facsimile

May 1, 2007

Board of Directors
Dover Motorsports, Inc.
1311 N. DuPont Highway
Dover, DE 19903

Dear Board Member:

I am contacting you in your capacity as a Director of Dover Motorsports, Inc. (“Dover Motorsports” or “the Company”).  Marathon Partners, of which I am the Managing Member, is a holder of more than 500,000 common shares of the Company.  After careful consideration, Marathon Partners believes that it is the right time for change at Dover Motorsports.  We strongly urge you to consider the contents of this letter.

Marathon has been a shareholder of the Company for approximately five years.  During this period, we have shared Management’s optimism that the Company would be able to achieve meaningful creation of value through the continued success of the Dover facility and the development of the Midwest racetracks into marquee facilities.  Unfortunately, Management’s strategy has been unsuccessful and the Company’s shares have reflected this reality, falling by almost 30% since April 2002.  The Midwest tracks continue to generate operating losses principally because the Company has failed to secure an additional Nextel Cup Series race.  Given the recent significant write down of the Midwest assets, it is now painfully clear that Dover Motorsports has failed to surface additional value since the separation of the racing and gaming assets.

We believe it is wasteful to further delay the inevitable.  We strongly believe that the best course of action for the Company is to sell itself by means of a competitive auction.  There are two main reasons for pursuing a sale of the Company:

• Industry giants, International Speedway and Speedway Motorsports, dominate the business

• Dover Motorsports has extremely limited growth opportunities

Over the past decade NASCAR racing has come to dominate the US auto racing scene.  International Speedway and Speedway Motorsports have consolidated track ownership to such an extent that they now dominate the industry.  With combined revenues of approximately $1.4 billion, the competition looms large over Dover Motorsports.  The marketing clout, sponsorship base, infrastructure and management resources of these entities exceeds that of Dover Motorsport’s to such an extent as to put the Company at a permanent competitive disadvantage.  Furthermore, NASCAR, the sanctioning body responsible for creating the racing schedules, is controlled by the same family that controls International Speedway.  It is very clear to us that the days of the independent operator are largely over.  Much in the same way that the Dover facility has slowly but surely bought out adjacent land owners, we believe it is inevitable that Dover Motorsports participates as a seller in the consolidation of track ownership in the US.

Our belief that Dover Motorsports should sell itself has come on the heels of a failed expansion strategy.  The Company has invested significant resources and capital in an effort to expand beyond the successful Dover facility.  This culminated in Dover Motorsport’s opening of the Nashville Superspeedway in 2001.  Late last year, asset impairment charges exceeding $60 million were recognized in order to write-down the value of the Midwest track assets.  With almost no hope of obtaining a Nextel Cup Series race, the Midwest assets are left burdening the profitable races of the Dover facility.  Further expansion into new facilities is out of the question at this point.  Additional prudent investment in the Dover facility remains an option but the opportunity is limited and certainly not large enough to generate meaningful growth for the Company.  It is patently obvious that Dover Motorsports has no significant growth opportunities within its core business.  Like you, we can always hope that NASCAR grants a Nashville Nextel Cup Race, but after 6 years reality has set in.  It is time for a different course of action.

While management’s intentions to grow the business have been admirable, aspects of the strategy are worthy of criticism.  Most obviously, the decision to build the Nashville facility, regardless of third party assurances, has been a costly mistake.  The sunk costs, ongoing operating losses and opportunity cost of the original capital are very large in relation to the Company’s current market capitalization.  Additionally, Dover Motorsports has pursued, perhaps correctly, a “play nice/don’t sue” strategy with the sanctioning body of the sport.  Without passing judgment, I note that other parties have pursued alternative strategies that have produced far better results for their owners.  Certainly, Dover Motorsports might have retained a close relationship with key participants in the sport by pursuing the ‘be nice’ strategy, but there has been no tangible benefit thus far for driving down this path.

In order to more fully maximize shareholder value, we also believe Dover Motorsports should consider dismantling the Company’s non-compete agreements with certain members of the Management team and the Board of Directors.  As it stands now, substantial payments are due should a change of control occur.  We urge the Directors to consider whether or not these payments afford any protection of value to the current owners of the business.  Given the Company’s inability to secure an additional Nextel Cup Series event, we highly doubt that any member of management would have success in securing a marquee race outside of Dover Motorsports.  If that is truly the case, how can shareholders view the non-compete payments as anything other than a transfer of wealth from shareholders to the management team?

While a sale of the cash draining Midwest facilities would be an attractive option, we continue to believe it is a waste of time and money to beat around the bush any further.  The proper course of action is to sell the Company to the highest bidder in a fair and open auction process.  With two giant industry players dominating the business and extremely limited growth opportunities, Dover Motorsports’ Directors will best serve their shareholders by merging the Company into a larger, more competitive entity.  The starkness of the current situation has become so clear as to make the sale opportunity greater than any other option available to the Board of Directors.

Gentlemen, if you can’t beat them, join them.  Thank you for your time.

Sincerely, 

Mario Cibelli
Managing Member