VOL. 45 | NO. 15 | Friday, April 9, 2021
By Tom Wood
Knoxvillians Kevin Clayton, Teddy Phillips and Darby Campbell, all members of the Music City Grand Prix investors group, prepare to board a flight for a group meeting in Nashville.
— Photograph Provided
Teddy Phillips knows a good investment opportunity when he hears it. But the chief executive officer of the Knoxville-based heavy civil construction firm Phillips & Jordan needed some questions answered before committing.
An IndyCar Series open-wheel racing venture was being proposed for Nashville, and Phillips, whose family once operated a NASCAR track in Maryville, was approached by the management group about joining the effort as an investor/owner.
“This is one of those things where, when it was brought to me … it was something that I looked at and went, ‘You know, this doesn’t make a lot of sense,’” Phillips recalls of those initial meetings a few years ago.
Phillips reached out to several fellow Knoxvillians – Darby Campbell, owner and president of Safe Harbor Development; Kevin Clayton, president and CEO of Clayton Homes; and Patrick Roddy, then the chief operating officer of AC Entertainment – for their entrepreneurial advice and to discuss the matter.
“I was intrigued. Matter of fact, the first investor in. And then we started gaining some traction,” Phillips says.
And with traction came momentum. Campbell and Clayton joined the high-profile ownership group, which includes superstar Grammy Award-winning entertainer Justin Timberlake and retired NASCAR star Dale Earnhardt Jr., among others while Roddy joined the management team as director of budget and finance.
As a result, in slightly less than four months, the inaugural Big Machine IndyCar Music City Grand Prix will roar through the streets of downtown Nashville, covering a 2.17-mile course that includes the streets around Nissan Stadium and will cross the Cumberland River via a 600-yard straightaway on the Korean War Veterans Memorial Bridge.
The internationally televised race will cap a three-day festival (Aug. 6-8) of music, food and motor sports. Besides the IndyCar main event, there also will be TransAm Series and GT America Series races.
The event is expected to boost tourism and potentially draw more than 100,000 fans to Nashville for the inaugural weekend.
Matt Crews, a record-setting placekicker at Middle Tennessee State University before getting involved in racing, is the CEO of the Music City Grand Prix. He applauds the ownership group, especially the Knoxville-based members, for helping turn dreams into reality.
“Putting together the financial backing of the ownership team behind (the race), that’s been a phenomenal group to see evolve and to get to know,” Crews says. “This management team (Crews, president Christian Parker and chief operating officer Jason Rittenberry), this ownership team really give us a great opportunity to be very, very successful.”
Adds Parker: “We are very fortunate to have Teddy, Kevin, and Darby as part of our ownership group. It’s a testament to the excitement that this festival has generated in Tennessee and the gateway it can become for growth and visibility across the Volunteer State. As a privately funded event, we couldn’t do it without our incredible ownership group.”
Here is a closer look at the Knoxville contingent, the racing and other issues and their backgrounds.
‘Gentlemen, start your engines’
In a free-wheeling, mostly serious but often humorous Zoom conversation, the Knoxville foursome recounted some of the advice they gave Phillips, then how he essentially recruited the rest to join him on the venture.
They’ve known each other for years, invested in the same companies and projects, traveled together and worked together.
Phillips thought this would be another fun project for them.
“We ended up putting the group together and when I felt comfortable to go to some of my friends that are kind of like-minded, that are entrepreneurs, and saying, ‘hey what do you think about this?’ And we were able to attract a lot of attention to it,” Phillips says.
That might be an understatement about the strength of the ownership group, all leaders in the business, music and sports worlds.
Beyond Timberlake, Earnhardt, Campbell and Clayton, the list of owners includes Big Machine Records CEO Scott Borchetta, former driver and Cup Series team owner Justin Marks, driver and stunt coordinator Stanton Barrett, J.R. Hand, president/CEO of Hand Family Companies, and Pinnacle Financial Partners executive Andy Moats, among others.
To a man, they agree that getting to know their more famous ownership partners has been a blast.
“Just meeting all these famous guys, I mean, our partners are – well, these guys on this (Zoom) call are pretty famous – but, you know, we were with Kid Rock the other night,” Campbell says with a laugh.
“Dale Earnhardt Jr., is our partner … Justin Timberlake, and (IndyCar Series owner) Roger Penske … just to be around these successful guys in their own right. To meet them and just hang out with them and have some common thread is gonna be … it already has been, but I can see it being a whole lot of fun for years to come.”
Clayton says their first meeting with Penske – who raced in Formula One and NASCAR, has 18 Indianapolis 500 wins and more than 500 total victories as a team owner – in Indianapolis, convincing him that Nashville was the perfect place to host a Grand Prix race, made an impression on him. Penske then joined the owners to walk the proposed downtown course.
“Sitting there with Roger Penske was quite an honor,” Clayton says. “One of his first questions was, ‘Have you welded down the manhole covers? Because when these cars go 200 miles an hour over the bridge, the manholes (covers) will fly up in the air, you know.’
“We went up and pled our case with him on why we should do it in Nashville, Tennessee. And he was generous enough to come down and take a trip around the facilities – and he was sold,” Phillips recalls. “So that was the marquee event that we had to have happen, to get his buy-in and blessing to have this setup in Nashville.
“They’ve been a pleasure to work with and we’re looking forward to hosting them in Nashville for many years to come.”
Clayton notes that Penske had Tennessee connections even before agreeing to stage the race here.
“He owns the (IndyCar) series and then, of course, he owns the race team of (two-time Series champion) Josef Newgarden, too.”
Newgarden grew up in Hendersonville and now lives in Nashville. Besides driving, he is serving the Grand Prix as an official “ambassador” to promote the event.
Clayton calls Newgarden “the local hometown favorite for all of Tennessee. So I hope all Tennesseans will show up be pulling for Newgarden.”
Come race day, Campbell thinks fans will have as much fun as the fanboy owners.
“These things are great times and what they do is they create memories and fun that people remember the rest of their lifetime,” Campbell says. “And there’s nothing more rewarding than that … memories for a lifetime.”
Then Campbell laughs as delivers another one-liner.
“And, yeah, let’s all be honest … when we all grow up, we all just want to be Teddy Phillips anyway.”
Racing in Phillips’ blood
Getting involved in the Grand Prix felt like a natural fit for Phillips, a throwback to his childhood days at Smoky Mountain Raceway in Maryville, a track that once hosted two Winston Cup races a year.
“I grew up with the Pettys and the Allisons and all those folks. We ran a NASCAR speedway and we had two Cup races at that time,” he recalls. “I grew up on Saturday nights working the concessions, selling tickets or scoring cards or whatever we had to do. I have always been a huge motor sports fan.”
But track ownership was only a sideline for the Phillips family. His father, Ted, founded Phillips & Jordan with Ted Jordan in 1952, then after the company was sold in 1970, Ted Phillips and his wife Avis bought it back in 1986. With Ted’s death in 2018, Teddy was named CEO.
“My mom is the owner of our company,” Teddy says. “We’ve got a great workforce here locally and throughout the U.S. In Engineering News-Record (a construction industry weekly magazine), we’re listed in the top 200 companies in America. So that’s where we are.”
The magazine recently reported that P&J was awarded a $176 million Florida Everglades restoration contract. Work was scheduled to begin in April, according to the article.
Phillips and Clayton predict East Tennesseans will support the race.
“There’s a lot of IndyCar race fans in East Tennessee, it’s become very popular. We’ve gotten a huge response. Especially from car club members, auto dealerships and the like over there.”
And that’s why, Clayton says, he and Phillips were looking at backing a proposed motor sports complex in Oak Ridge. The project, spearheaded by developer Rusty Bittle, was canceled this week amid public protest.
“We think that it will be an incredible economic development asset for this region,” Clayton says. “There’s people all up and down the East Coast traveling to tracks every weekend and the uniqueness about this piece of property is that it’s large enough so that you can have – similar to this Nashville Indy race – there would be other reasons why families would want to come there.”
Clayton also began early
Like Phillips, Clayton grew up in the family business, which helped fuel his passion for motor sports.
Clayton’s father, Jim, started a used-car business in 1956 with his brother, Joe. A decade later, Jim founded his signature mobile-home business, Clayton Homes, which quickly became a leader in the industry and branched out over the ensuing decades.
When his father retired in 1999, Kevin took over and remained in charge even after it was sold in 2003 for $1.7 billion to Warren Buffett’s company Berkshire Hathaway.
Clayton credits his father, and a stint on Wall Street, for his love of motor sports in general and IndyCar in particular.
“I grew up on a car lot with my dad, so I was always hooked on being around automobiles. He started in the car business,” Clayton says. “I did motorcycle racing a little bit but then I got into cars, really, not until my early 40s and then got into the Skip Barber Racing Panoz Series and then later the Ferrari Challenge Series.
“But my connection, really, when I fell in love with IndyCar was when I was working on Wall Street on an internship. One of these trucking companies was going public, and I was working on their account. (The client) said ‘Why don’t you go to Indy?’ – they were based out of Indianapolis – and he gave me two tickets.
“I went there for four years straight because I fell in love (with the race). That was the year (1985) that Danny Sullivan spun out” but maintained control of the car and won the race.
“And so I’ve been hooked on it ever since. I’m super happy to be involved in the Nashville race.”
Campbell sees opportunities
While admitting he isn’t the race fan that Phillips and Clayton are, Campbell calls this a golden opportunity he couldn’t pass up. He also says it will boost Nashville’s recovery from the economic problems caused by the COVID-19 business shutdowns.
“I like racing like the next guy (but) I’m not an enthusiast. I mean, I love it and when I go, it’s great fun, but I don’t watch it on TV when I’m sitting around at home,” says Campbell, who owns and operates Nashville’s Margaritaville Hotel near the Grand Prix course, as well as 14 marinas from New York to Florida, several properties in Pigeon Forge, a water park in Georgia and other tourism-related properties.
“But I was just glad to be involved with these guys. I’m glad to see Nashville coming back and be a part of maybe spurring on some rejuvenation of that city.”
Asked if he looks at the Music City Grand Prix from a business approach as an investor or if it’s a hobby, Campbell and the others try to explain.
“I told Teddy early on that this was fun to me. I think all of us probably are in that,” Campbell says. “I don’t think any of us are relying on this to be successful for us to be successful, so to speak. I told Teddy … if I could get a return of my money – not necessarily return on my money – I’d be fine.”
Campbell and Clayton are like-minded on the question.
“It’s very hard to find an investment you think that will have a reasonable payback and then let alone one that you’re passionate about the sport, so it really hits on the hobby enthusiasm and then the investment as well.” Clayton points out.
Campbell nods and wants to clarify his earlier comments.
“Since I’ve gotten into this and learned about it, I’ve been impressed with what the return could be. And pretty excited about it,” he says.
“And having (Roddy) running it, I feel very comfortable that we’re actually going to be successful and it’s going to be a great investment.
“So it wasn’t that I didn’t take it serious but definitely – as Kevin said – to have fun and hopefully get a decent return on your investment, it’s gotta be a bonus.”
Roddy’s role to follow the money
Crunching numbers and following figures that’s Roddy’s role in this ambitious project. Not an owner like the others, but an essential part of the management team in charge of budget and finance.
“I track the money, so yes, I’m involved in every single aspect of this thing,” Roddy points out. “I’m not necessarily a racing fan but I do understand how big events like this work, how the money flows through them.”
Roddy grew up working for his family’s Coca-Cola distributorship before becoming executive director at the Knoxville Zoo. He then got involved in the financial world before joining AC Entertainment as its chief operating officer.
Roddy says the financial conversations with Phillips piqued his own interest in joining the Grand Prix management team.
“I got involved in this because Teddy called me. He goes, ‘This seems like a good idea but, you know, what is this? Help me understand this. Help me understand what these numbers mean.’ And kind of talked Teddy through them a little bit,” Roddy says. “Teddy was very persuasive … ‘Roddy, I need you involved in this. I need you to really help with this thing, understand the budget, understand how the money flows.’
“So it was really just getting involved with, and then I got to meet Matt and Chris and Jason,” Roddy adds. “(I’m) very impressed with what they do, what they understand, their vision.”
Roddy, who in mid-April will begin traveling to Nashville on a consistent basis as race day approaches, describes his job as being able to anticipate potential money flow issues.
“It’s just asking the questions, let’s make sure we’ve got this tracked right,” he explains. “Let’s make sure we understand the numbers because as a new event it’s always changing and it’s the ability to be able to understand what the decision means monetarily.
“When something changes, we then rerun the numbers … what does it look like, what does this mean, good choice, bad choice. But again, you’ve got to keep moving because it’s coming … the date is set.”
Success during a pandemic
All four of them say the Grand Prix can be a financial success in a year when there are still major questions about the COVID-19 pandemic. Nashville businesses spent most of 2020 in lockdown and the recent Southeastern Conference men’s basketball tournament in mid-March was the first major event to return to Music City. Seating capacity at Bridgestone Arena was limited to 25% or about 3,400 fans.
But to a man, the owners say they are confident the race will prosper despite the current crisis – because their companies did.
Phillips & Jordan and Clayton Homes were both deemed essential companies, while Safe Harbor Development’s properties – marinas, restaurants, hotels and other tourism-related assets – were essential to the mental well-being.
“I thought it would be the end of the world, you know,” Campbell says. “But what happened is everybody who went and bought a boat wanted to get on the water and get away, and that’s the only thing they could do.
“And it’s crazy how busy it is. They’re out of boats, nobody has any marina slips available … nuts. Same thing as RVs.”
Among his Pigeon Forge properties is The Island amusement park with two Margaritaville hotels.
“I’ll promise you, (Pigeon Forge and Sevier County is) the No. 1 market in the United States during this pandemic and beyond. I mean, our sales in that market across the board in any business we’re in … for 2020, they were up over 2019 and now they’re starting out this year the same way.”
Campbell shut down the Nashville Margarita Hotel when the pandemic began in March 2020, but it has since reopened and is thriving, he says.
“The last two weekends (in mid-March, when the Zoom interview was conducted) we had 100% occupancy and our weekday occupancy has probably doubled in the last month. So I’m pretty encouraged where we’re going,” Campbell says.
Clayton and Phillips have similar 2020 success stories.
“We’ll do almost 60,000 homes this year. We’re No. 1 or No. 2 in the nation of being the largest provider of housing,” Clayton says. “So it’s been a busy year and I’m just super-proud of everybody getting through it. We were deemed essential during the pandemic and been fortunate because demand has been up about 20% all during this unfortunate time for the country.”
Adds Phillips: “Being an essential business like we are, we’ve been able to keep our crews working remotely and safely, and haven’t been affected by COVID like most companies have throughout the U.S. Being essential and being remote has been a plus for us to keep our workforce out in the field working.”
Ticket sales, optimism run high
Roddy says interest is taking off on all fronts, from the fans in both the U.S. and overseas to Nashville’s government and businesses, from corporate sponsors to television partners.
We’re very happy with where the tickets are. You’re starting an event in a pandemic and trying to get the word out,” Roddy says. “But as you can see and listen to these guys, the interest is there.
“The sales are strong, the hospitality sales are out through the roof. The sponsorships are moving great which is, you know, very important to an IndyCar race.
“We’ve just got to keep working hard, get it right, make sure when people come to the event they have a great experience whether it’s for the music, whether it’s for the racing, whether it’s for Nashville, whether for whatever it is … we’ve got to put on a great show. And we’re very happy with where we are right now.”
They all agree that the Nashville brand is helping sell the race on all fronts. For a good time, Music City is hard to beat.
“This is a great excuse to come to Nashville,” Roddy says. “You’re hearing about Nashville all over the world and this is an excuse. So it’s not just the hardcore race fan, it’s people who want to experience Nashville – ‘and let’s go to the race.’”
That’s music to everyone’s ears.
Come Aug. 8, they’ll be moving in really fast company.