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SBJ/20090727/This Week's News
Taking the wheel at ISC
Published July 27, 2009
When Lesa France Kennedy entered the drivers meeting at last April’s NASCAR race in Phoenix, it marked a personal reunion with the sport. Wishes of “Congratulations” and “Welcome back” came from team owners Richard Childress and Jack Roush. Handshakes and hugs came from drivers Carl Edwards and Jeff Gordon.
The week before, Kennedy had been promoted to CEO at the France family-run International Speedway Corp., the world’s largest and most influential racetrack operator. But what the promotion really signified was Kennedy’s re-engagement with the sport that her father and grandfather created and shaped for the last 61 years.
There was a sense throughout the garage at Phoenix that “She’s back,” and ready for a more public role as one of NASCAR’s most powerful figures.
It was two years ago that the deaths of her father, Bill France Jr., and her husband, Dr. Bruce Kennedy, both within a month’s time, sent Lesa into seclusion from the sport. She called it a type of shock that took her months to shake and she admitted that the grieving process took longer than she expected.
“It’s not something you put a timetable on,” she said. “You can’t just set a date that you’re going to be back.”
Bryan Sperber, the track president at Phoenix, was with Kennedy that April day, escorting her to some of the speedway’s new features, the Bud Roll Bar and the Speed Cantina. The inquisitive and focused Kennedy, 48, asked lots of questions, as she always does.
“There was a real excitement that she was re-entering the sport in a more active way,” Sperber said. “The loss of her father and husband were very public tragedies and there’s got to be a healing period from that. With Lesa back as CEO now, I think it helps turn the page.”
‘She has a tenacity’
It was 2005 when SportsBusiness Journal named Kennedy the most influential woman executive in sports. As president of ISC at the time, her fingerprints were all over a number of significant projects, including the acquisition of Chicagoland Speedway and the construction of Kansas Speedway.
In the mid-1990s, Kennedy took the lead on building Daytona USA, the showplace next to the speedway that has since become the Daytona 500 Experience.
“Lesa can be a bulldog,” said Cliff Pennell, the former R.J. Reynolds marketing chief during the Winston title sponsorship in the 1990s and an ISC consultant for eight years. “She decides that ‘We’re going to do this and it’s not going to fail.’ She has a tenacity that is very much like her father.”
Even though her appointment as ISC’s CEO took effect June 1 — when she replaced her retiring uncle Jim France — many in the motorsports industry say she was effectively the company’s CEO going back six, seven, even 10 years ago.
While engineering some of ISC’s most important expansion in the past decade, she also stuck around for the follow-up. When ISC acquired five tracks from racing icon Roger Penske in the late 1990s, including the Homestead, California and Michigan speedways, Kennedy took the lead on integrating them into the ISC family.
“Those tracks had very different operating styles, very different cultures,” Pennell said. “Bringing them all together — from a private group into a public company — was quite a task, but Lesa is so organized and so determined that she made it work. She has a way of getting everyone to put their differences aside and get behind a common purpose.”
On a larger scale, “simply to say that Lesa was behind this project or that project doesn’t do her justice,” said George Pyne, president of IMG Sports & Entertainment and formerly an 11-year veteran at NASCAR. “As it relates to ISC and largely to NASCAR, she’s played a role in every major decision the last 15 years, maybe more.”
She’s also out front on ISC’s two current projects: the construction of Daytona Live!, a $430 million retail, dining and entertainment development that will house the headquarters for NASCAR and ISC, and a joint effort with Cordish Co. to build a Hard Rock hotel and casino at Kansas Speedway.
But some of the company’s more recent struggles face Kennedy as she officially steps into the CEO job. The Daytona Beach, Fla.-based company reported second-quarter losses of $31.7 million, citing drops in admissions, sponsorship and hospitality revenue. The company still expects a profit for the year thanks, in part, to major reductions in expenses, according to John Saunders, who was promoted to Kennedy’s former position as ISC’s president.
The company also has failed with 50-50 partner Speedway Motorsports to steer troubled merchandise giant Motorsports Authentics in the right direction. MA is expected to post losses for a third time in four years. Created from the $245 million acquisition of Action Performance and Team Caliber, MA now carries a market value of about $38 million.
Also, recent expansion efforts in Staten Island, Seattle and Denver stalled, leaving analysts wondering from where ISC’s revenue growth will come. A Wells Fargo Securities report called track ownership an already mature, slow-growth industry, and ISC’s stock price of just under $25 last week was well down from the 52-week high of $42.58.
How Kennedy will react to these setbacks remains a question. The sister of NASCAR CEO Brian France, Kennedy is described as smart but quiet by the financial analysts who cover the publicly traded ISC.
“She’s not very visible,” said Dennis McAlpine, a veteran analyst who has covered the sport for 20-plus years. “She’s very hard to read because you don’t see much of her.”
“She’s going to need to be more visible because of the negative forces affecting the business,” said Barry Lucas, a senior vice president and analyst for Gabelli & Co. “She doesn’t necessarily need to be Brian France or even Bruton Smith, but she does represent a significant portion of the sport.”
Getting more out front
As the point person for ISC, Kennedy said she’s ready for a more visible role and understands that it comes with not only her leadership position with the tracks, but also as the vice chair of NASCAR, and her maiden name as well.
“I would like to be more out front,” she said. “I think that comes with leadership and it’s something I’m going to focus on moving forward. It’s one of the ways we can make everyone aware of the opportunities at ISC.
“The more we further the sport, the more we do to move our tracks forward.”
It was within the past few months that Kennedy said she was ready to resume her once-prominent role in the sport. It was July 10, 2007, when the Cessna 310 carrying Dr. Bruce Kennedy crashed in a Sanford, Fla., neighborhood, killing him and four others.
In the months after the crash, Kennedy receded from her role at NASCAR and ISC, taking days and weeks at a time from work to be with her son, Ben, now 17 and a short-track racer himself. Those weekend excursions to watch Ben race at nearby short tracks in Orlando or New Smryna proved to be part of the healing process.
“In the time after the accident, the first six months, my focus was totally on the home front,” said Kennedy, who lives in Daytona with her son. “In those six months, I was really in a state of shock. I had a lot to deal with personally, but I also knew that my dad and my husband would want me to keep going and to move on.
“We’ve got a lot of exciting things going on here at work, there are a lot of exciting things happening with Ben. We’re doing very well now, but it takes time.”
Putting a timetable on her return to a fuller work schedule wasn’t something she could do at first. Those who work with her say she remained engaged in the company, weighing in on important decisions even though she might not have had a regular presence in the office during the first year after her husband’s death.
In NASCAR, the commitment of the third generation of leadership, Brian and Lesa, is often gauged by how many races they attend. Their grandfather, Bill France Sr., founded the sport in 1948 and their father, Bill Jr., is credited with shepherding the sport from a regional phenomenon into a national hit during the 1980s and ’90s. They attended most every race and that’s where the bar is set.
But what most media and fans don’t see, co-workers say, is how often Kennedy has traveled in recent years to lead the new casino project at Kansas Speedway or the attempted expansion at Staten Island.
“I would tell people they’re wrong if they think she was not engaged in the business before,” said Roger VanDerSnick, ISC’s newly promoted executive vice president and COO.
But even as Kennedy talks about work the last few months, she describes it as “diving back in.”
“It’s just a difficult process and some days are better than others,” she said. “The advice I give to friends is not to put a timetable on it. You can’t.”
In the months since she was named CEO, Kennedy has been more visible, attending races, walking through the garage, engaging fans and stakeholders for their feedback. On a recent conference call with ISC’s business unit leaders, Kennedy opened with comments and chimed in several times over the course of the hourlong call.
“It was great to hear her because it had been a while since we’d had that kind of insight from her,” said Gillian Zucker, president at ISC’s Auto Club Speedway and an 11-year France family friend. “When she says something, it’s meaningful. She has the power to change the whole focus of a discussion.
“She’s never been a very public figure, she’s never wanted to be in the spotlight, all she wants to do is drive the business forward. That’s just her personality.”
Leading in crisis
Now that she’s fully re-engaged at ISC, the industry awaits her input on the NASCAR side of the business, where it battles dropping attendance, TV ratings and sponsorship.
When asked about NASCAR’s direction, Kennedy sticks to many of the same predictable talking points that Brian leans on.
TV ratings, while down, remain strong compared to most other sports. Crowds of better than 100,000 still fill many of NASCAR’s tracks. The new car is making the sport safer and more economical for the drivers and owners.
“The foundation of the sport is very strong,” Kennedy said. “If you look at the business, we’ve been fortunate that we’ve fared very well through the (economic) storm and we’re well-positioned for the future.”
That’s not a position shared by everyone, many of whom see the declines as evidence that NASCAR is on the wrong side of the plateau after several years of growth.
“Can she lead the most important public racing company in the world at a time when the industry is in crisis?” asked Humpy Wheeler, the former president of Lowe’s Motor Speedway, which is owned by ISC’s rival, Speedway Motorsports. “It’s going to take a lot of hard work to turn this thing around. We’re talking 60- and 80-hour workweeks.
“Lesa is a product of inherited leadership and there’s nothing wrong with that. We’ve had many great leaders who came to power that way. But this sport is in a serious situation leadership-wise. Lesa is very smart and she’s certainly capable of giving the industry what it needs, which is strong, passionate leadership.”
While she’s not exactly effusive when describing her relationship with her brother, Brian, the two are said to be closer after the deaths of their father and Kennedy’s husband.
“If he needs my support, he asks for it and he knows that I’m there for him,” Kennedy said. “We might talk once a week or several times a day, depending on what’s happening.”
There are many in the industry who want to see Kennedy wield even more of her influence on both sides of the France family businesses. Brian has said he won’t be a lifer in his role as NASCAR’s CEO, but his sister wouldn’t speculate on whether she might be next.
“My interest is solely on ISC,” she said.
Whether her interests expand in the future will be of particular concern for an industry fighting the throes of the recession.
“What you have to know about Lesa is that she’s not a politician,” said Zak Brown, CEO of Indianapolis-based motorsports agency Just Marketing International. “She calls it as she sees it, she’s passionate about the sport and she’s a very good leader.
“It will be interesting to see how big her NASCAR influence becomes. Her business card says ISC, but it feels like there’s more to the plan.”