Saying Lowe’s Motor Speedway buzzes during May is like calling former raceway devotee Jessica Simpson “good looking.” She’s hot, and most folks know the speedway is, too.
With the addition of the NHRA POWERade Drag Racing Series event in September, Lowe’s will host six of the nation’s premier auto racing series during the 2008 season. Also on the schedule are three NASCAR Sprint Cup Series races, two NASCAR Nationwide Series events, a NASCAR Craftsman Truck Series race, three World of Outlaws Late Model Series events and a pair of Advance Auto Parts World of Outlaws Sprint Car Series races.
The 1.5-mile track in Concord hosts three major stock car races and a gaggle of related attractions in May alone, culminating in the Coca-Cola 600, NASCAR’s longest, during Memorial Day weekend. “We’ll have at least 400,000 people visiting the speedway during May,” says O. Bruton Smith, who founded Lowe’s and lays claim to it and six others around the country as chairman and CEO of Speedway Motorsports.
Calling Smith a success is another huge understatement. Worth more than $1.5 billion, he consistently ranks among the world’s richest people.
He remains active at the helm of two companies traded on the New York Stock Exchange: Speedway Motorsports, Inc., which owns seven race tracks, and Sonic Automotive, Inc., with 170 car dealership franchises and 34 collision repair centers.
“I like both companies because I built them from scratch,” Smith says. “They’re my children and I like them equally well.”
Racing has been in Smith’s blood since he was a teenager growing up on a farm in Stanly County, N.C., and he obviously enjoys it. The octogenarian looks and acts like a man closer to the age he claims—39.
He presides in his cubbyhole quarters at flagship auto dealer Town & Country Ford. He keeps a much larger office on the second floor, but he likes his street-level spot packed with racing memorabilia because it provokes interesting conversations and promotes rapport with his visitors.
Oh, and he can see his shiny black 2008 Mercedes out the window. It’s the one with 620 horsepower in a V-12 engine. “Best car I’ve ever driven,” he smiles, adding that he’s told that model exceeds 200 miles per hour on the German Autobahn.
Smith has been fascinated with racing since he was 8 and his father took him to a track at the old Charlotte fairgrounds off North Tryon Street. “It was so exciting,” he remembers. “Man, I sure loved it.”
Fresh out of high school, Smith bought a used Ford racer for $700 in 1949. His mother soon prevailed on him to stop competing and he started promoting and staging races, instead.
He organized his first competition on a half-mile dirt track near Midland, not far from where he grew up on the farm of Lemuel and Molly Smith, the youngest of nine children.
He rubbed elbows with legendary drivers from NASCAR’s early days, stars such as Buck Baker, Jimmy and Speedy Thompson, and Ralph Earnhardt, father and grandfather respectively of icons Dale Earnhardt and Dale Earnhardt Jr.
Another big name early on was Curtis Turner, who nominally helped Smith create what started in 1960 as Charlotte Motor Speedway, today named Lowe’s Motor Speedway, just across the Mecklenburg County line in Concord.
Like many superspeedways of the era, the track fell into Chapter 11 reorganization from which it eventually emerged despite lagging ticket sales, and, despite his departure from the speedway in 1962 to pursue other business, Smith became quite successful and began purchasing shares of stock in Lowe’s Motor Speedway. By 1975, Smith had again become the majority stockholder in the speedway, regaining control of its day-to-day operations.
Through the years, Smith has added other tracks to what has become Speedway Motorsports, most recently bringing New Hampshire Motor Speedway into the fold that includes tracks in Atlanta, Dallas, Las Vegas, California’s Sonoma Valley and Bristol, Tenn.
The speedway’s New York Stock Exchange symbol is TRK.
“I took racing to Wall Street in 1994,” Smith says. “They started talking about racing in the board rooms. It brought a lot of companies to the table that we had not visited with before.”
Speedway Motorsports reported total revenues of $561.6 million for 2007, down from $567.4 in 2006, but that includes lower revenues under a new NASCAR broadcasting rights agreement and higher income taxes.
“SMI’s core operations remain strong,” Smith told shareholders. “Almost four million fans attended our 2007 events, despite challenging economic circumstances, demonstrating that the demand and appeal for motorsports remains strong.”
He’s learned, Smith says, that making speedways fan-friendly builds lasting success. “Racing is recession-proof,” he says. “People will cut on some other things, but they still want their entertainment.”
He’s proud of the emphasis his tracks have placed on features that women appreciate, including a proliferation of upscale restrooms. Today’s raceday crowds are about 50 percent female, he observes.
“Women have fallen in love with the sport,” he smiles. “If the women come, men will follow.”
Major upgrades at Lowe’s Motor Speedway are greeting those hundreds of thousands of fans descending on the facility this month. There are 22,850 new, stadium-style frontstretch seats with armrests, more leg room and better handicap access that have been added. Renovations in the next three to five years could include more seat upgrades, double-decked suites and giant video screens. Total tab for the renovations is around $200 million.
Smith committed to those improvements after a loud and public spat with Concord city officials who balked at his plans to build a drag strip near the speedway. Smith threatened to forsake Concord and build a new track somewhere else in the region. Then city council decided the drag strip was acceptable after all, and city fathers offered him incentives to stay.
“I learned a lot,” Smith says of the uproar from late last year. “We were wanted in other areas. Offers just flowed in.”
Within an 18-mile radius of Charlotte-Douglas International Airport, he heard of opportunities such as 600 acres in Rowan County with $8 million in grading paid for, or 2,200 acres in another spot with $300 million in tax incentives.
What he didn’t like hearing, Smith admits, is that owners of small businesses near
Lowe’s Motor Speedway worried that his anticipated abandonment of that track could ruin them financially. The thought of hurting them repelled him, he says.
He’s glad things worked out as they did. “We went through a public process with Concord and the whole area,” he says. “It started bad but, it ended good.”
So construction is underway now on Smith’s new $60 million drag strip on 125 acres across Highway 29 from the speedway. When it opens in September for the inaugural NHRA Carolinas Nationals, the strip will feature a starting line tower with 16 luxury suites and a rooftop viewing area. Grandstands will seat 30,000.
Smith, who has three other drag strips, is known for making changes at his tracks. “I buy a speedway and, invariably, I want to change it,” he admits as he lists major alterations he made to his facilities in Atlanta, Las Vegas and Bristol.
Changing Up the Recipe
Change is a key concept at Smith’s other company, Sonic Automotive, which holds a chain of dealerships that among them sell virtually every make of car. The company, SAH on the NYSE, reported $8.3 billion in revenue for 2007, with net income of $95.5 million, up from $81.1 million in 2006. Smith reckons Sonic sells about 22,000 vehicles a month.
Smith’s son B. Scott Smith is Sonic’s president and chief strategic officer. The younger Smith told shareholders: “Our key operating initiatives continue to drive our results even in a challenging new vehicle sales environment.”
In a decade, the number of dealerships will decline, the elder Smith predicts, but his holdings will expand. He wouldn’t mind becoming the largest auto dealer in the country. “That would be an enviable position to be in, if we managed them all properly,” he says.
He recently cut a deal to buy Beck Imports, one of the Carolinas leading Mercedes-Benz dealers with its facilities within a stone’s throw of Smith’s Town & Country campus. Why? “It’s right down the street,” he says matter-of-factly. “I know Mr. Beck and I know the family. I’ve known them for years.”
How can he grow in a contracting industry? Money and people, he says quickly. It’s easy to point to Sonic’s impressive dollar figures, but Smith says good people are essential. He believes he attracts them and keeps them because he helps them have fun on the job.
“I’ve jokingly said in some of my speeches that I want to take the word ‘work’ out of the dictionary,” he says. “I want to replace it with ‘fun.’ If you’re having fun doing what you’re doing, your productivity is going to increase 20 or 30 percent.”
Smith is strong on making training courses available, and his employees study at an in-house “College of Knowledge.” He also preaches what he calls “taking the high road.”
“If our employees do that, we’re a more customer-friendly company,” he says. “We’ve got to be absolutely right with our customers. We actually sell to sell again. We’re very strong on that.”
Smith has strong opinions on the future of the domestic auto industry. “There’ll always be a General Motors, there’ll always be a Ford,” he says. “But where will they build the cars?” After a moment, he suggests that might be China.
The cost of manufacturing vehicles in the United States includes enormous amounts for benefits to workers, those still on the job as well as retirees, Smith points out.
Although Smith is a Republican, he professes to espouse what is essentially a Democratic theme—a national health care plan.
“I’m for it because it’s what’s happening in the world,” Smith explains. “There are about 38 countries that now have a national health care program.”
Health care costs that American automakers pay account for $1,800 to $2,000 in the sticker price of a new domestic vehicle, Smith says. Yet Japan has a national health care program, so there are no medical benefits built into the cost of a Toyota, or any other Japanese-produced vehicle.
Smith pauses, then professes to truly like what he does. “I enjoy business immensely,” he says. And, when pressed, he admits he likes the advantages of his huge wealth.
As a young man, Smith says he admired legendary industrialist and eccentric millionaire Howard Hughes. “I’m not like him,” Smith laughs, then offers a light-hearted caveat. “In a way I am. I do have a home in Beverly Hills and he had one there, too.”
In recent years, Smith has enjoyed recognition for achievements in both racing and business. He’s a member of the International Motorsports Hall of Fame as well as the North Carolina Business Hall of Fame.
Smith’s daughter Anna Lisa is strong into equine pursuits and might not ever join his business enterprises, but his three sons are already part of his empire. Besides Scott Smith, son Marcus Smith leads national sales and marketing for Speedway Motorsports. And his youngest son, David Smith, is senior vice president of corporate development for Sonic, overseeing that company’s acquisitions of new dealerships.
“I do have a succession plan,” the patriarch grudgingly admits. “We don’t talk about it, but, yeah, we do.”
Yet Smith continues to tell people he’s 39. “Absolutely, I might work another 20 years,” he says. “I’m feeling good.” Analogizing to dragway lingo, it would appear that for Bruton Smith, “burnout” means just getting started.