08/11/97 A GAMBLE AS BIG AS TEXAS

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A GAMBLE AS BIG AS TEXAS

Out in the parched prairie north of Fort Worth--deep in the heart of Nowhere--O. Bruton Smith has rolled the dice big-time. He has gambled $140 million that he'll be able to lure enough fans to turn Texas Motor Speedway (TMS) into the capital of his auto-racing empire.
On nearly 1,000 acres acquired from developer Ross Perot Jr., Smith has erected 150,061 grandstand seats and 205 skyboxes around a 1 1/2-mile oval. And there are plans for 76 trackside condos--for supersound sleepers.
''We thought Texas would be big when we built it,'' says Smith. ''It turned out to be colossal.'' A little 10-gallon bluster? Maybe not. In April, some 185,000 fans showed up for a NASCAR race. According to a University of North Texas study, TMS is expected to generate 3,400 jobs and pump $160 million a year into the local economy. (Fort Worth's Chamber of Commerce says a weekend of NASCAR racing brought in almost $36 million.)
Maybe that's why Smith was able to cut a deal with the Fort Worth Sports Authority that should save him some $90 million in taxes over 30 years. In its first year, figures Wheat First Butcher Singer analyst H.B. ''Tom'' Thomson III, TMS will rack up net income of $4.8 million on revenues of $37 million for owner Speedway Motorsports Inc.
Not too shabby. Still, it's nowhere near the profit Smith needs to recoup his investment. The most crucial task: snaring more top-tier events. One of NASCAR's coveted Winston Cup races generates $8 million to $10 million for a track. TMS is now making do with one, plus secondary events.
Competition from other new speedways makes the chances of an additional Winston Cup race problematic. Indeed, Smith secured his April race only by acquiring a smaller track and moving the event to TMS. ''Texas [could be] extremely profitable with two Winston Cup dates,'' says Speedway Motorsports President H.A. ''Humpy'' Wheeler. ''With one, it's essentially a break-even or small-profit situation. These new trackseat money. We need more racing to feed the monster.''
Still, those corporate suites should help. Smith charges companies $65,000 to $100,000 a season. In Texas, 120 of the 205 boxes are leased to outfits such as Electronic Data Systems, Coca-Cola, and IBM. The track also rents exhibition space in an adjacent Corporate Village. There's infield parking for 1,300 motor homes and campers at $350 to $850 per race weekend. And TMS sells ''preferred seat licenses'' that guarantee the same seat for 30 years as long as you continue to buy season tickets. Cost: $750 to $2,000 a season. Some 40% of the 36,000 licenses have been sold thus far.
Like all modern tracks, TMS leverages its asphalt to the hilt. It plans to earn extra money by renting time to car clubs, truck-show promoters, used-car sellathons, and fantasy driving schools. In June, country and rock-music festivals pulled in estimated revenues of $300,000 to $500,000 apiece.
SOOTHING ROAR? TMS's condos remain a curiosity for nonracing fans. But somehow, Smith, who pioneered the concept at his Charlotte and Atlanta speedways, manages to sell them. TMS is building 76 apartments high above the track--at $275,000 to $575,000 apiece. All have been purchased. ''I just sold two to a lady from Taiwan who manufactures silk flowers,'' says supersalesman Smith with a grin. ''I have no idea what she wants them for.''
No doubt about it, the man can sell. But industry veterans caution that unless he can corral more big-time races, Smith could wind up with the kind of hangover Willie Nelson sings about. ''Our concept is 'If you build it, they will come,''' says Speedway Motorsports executive Thomas M. Sadler. As the racing world looks on, Smith is about to find out if that happens only in the movies.
By Stephanie Anderson Forest in Fort Worth, with Lee Walczak in Charlotte, N.C.

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