A $122 Million Super Bowl Bet: Lucas Oil Stadium
Despite the fact that the Giants walked away the winners of Super Bowl XLVI, it's a man you've probably never heard of who really won big this year. That man is Indiana native Forrest Lucas and his company, Lucas Oil, which owns the naming rights to Lucas Oil Stadium, where the Super Bowl was played.
And though the decision to buy the naming rights to the stadium initially looked like a Hail Mary when the deal was announced in 2006, it turns out it was a good bet for this company of just 400 employees.
"My first reaction to being asked about the naming rights was that it would be way too much and we couldn't afford to do it," said Lucas, founder of Lucas Oil Products, which manufactures and produces automotive lubricants, additives and oil. "But, as I was driving home, I started thinking about it and I didn't even know how much it cost to sponsor a stadium at that point, but I began to think that this could be the thing I was looking for to make a splash."
That splash ended up costing Lucas $122 million for a 20-year contract for the naming rights to the stadium, now Lucas Oil Stadium, which is the home of the Indianapolis Colts. But with an estimated $30-to-$40 million of media exposure expected during the Super Bowl, and hundreds of million viewers focused on the stadium during the game, Lucas, the constant salesman, is hoping the decision proves a valuable asset to his company.
t was a big gamble when you consider that the Super Bowl was not yet scheduled to be played in Indianapolis when Lucas made the deal in 2006. To help bring the Super Bowl to the Hoosier State, Lucas contributed $1 million of the $25 million which was needed for the bid to bring the game to his home state. In 2008, his contributions, along with those of 120 plus other donors, helped secure the bid for Indianapolis to host the 2012 Super Bowl, as NFL owners chose the bid for Lucas Oil Stadium over bids from Reliant Stadium in Houston and the University of Phoenix Stadium in Glendale, Ariz.
Lucas, however, decided it was worth taking a chance.
"When we first did it, I knew it would make us look like a Fortune-500 company, which we are not, but that is part of selling. I think, when it is all said and done, it will have a huge impact. At least I am betting it will," Lucas said, chuckling. "It certainly is giving a lot of attention and puts you out there."
While the Super Bowl may represent the latest chapter in the story of Forrest Lucas, his journey began just two counties over from the site of Super Bowl XLVI, when he began to slowly work his way up the ranks of the trucking industry in the 1960s. A few years later, Lucas began working as an owner-operator of his own fleet of 14 moving trucks. The experience proved to be a valuable one for Lucas in more than one way.
"It was a small business, so I was my own boss," said Lucas. "I learned how to save a nickel here and a penny there. I learned the things that it takes to be a good negotiator and a sensible person and also how to take care of your money. It forced me to be responsible and that was particularly important because it taught me to see something through, even if that meant working through the night into the next day. You have to have those kinds of ethics and people have to trust you."
Other than teaching Lucas valuable business lessons, owning his own fleet of trucks also allowed Lucas to lay the foundation for Lucas Oil Products. At the time, though, making his own oil was nothing more than his response to a problem his trucking fleet faced.
"I needed some better oil, that is all there was to it," said Lucas. "I had never learned how to make oil products, but I had worked as a mechanic on my own trucks, so I knew how transmissions and motors worked and I knew how oil interacted with them. Then I got curious about how to make it better."
Lucas attempted to make better oils that would help prevent his trucks from breaking down while also maximizing their performance for his fleet. To accomplish this, Lucas began searching in chemical junkyards for the right ingredients to mix and match to create his products. Those searches, combined with his existing mechanical knowledge, led to the first official Lucas Oil Products, and a test of these products on his own trucks proved the formula worked.
"I never went to college, but there are times when you are taught something and you are told this is the way it is and you believe it enough that you close your mind to any other thoughts," said Lucas. "Eventually I learned the way you were supposed to do it, but by then I already knew I was way ahead of everyone else."
When the economic recession of 1987 hit, Lucas had a chance to show others what he already knew. Since the recession hurt the commercial trucking industry in particular, Lucas now had an avenue to try to sell his products to small and independent auto-parts stores and truck stores. Two years later Lucas purchased his first plant in Corona, Calif., and the company has been growing ever since. In 2003 Lucas opened a second plant, in Indiana, bringing a part of the company back to his home state. That growth has continued until today, with Lucas Oil Products currently sold in over 20 countries around the world.
Humility and the right people
Today Lucas Oil Products owns racing teams and racing series, and sponsors racers. The company also owns television station and two racetracks, in California and Missouri. Additionally, the company owns the Lucas Oil Cattle Company and the Lucas Estate in Indiana, which hosts charitable events and corporate retreats. With over 100 products and annual revenues in excess of $150 million, Lucas' story is undoubtedly of success, for which he credits his business beginnings.
"I always tell people, don’t go out there thinking you are going to go out there and finance everything," said Lucas. "Then you are in debt up to your knees to start with. I never went into debt when we got the thing off the ground and running. I can't tell you how extremely important that is."
By avoiding debt, Lucas was able to expand and grow his business as he needed, but it was another quality that helped Lucas become a leader in manufacturing additives, oil and lubricants.
"I never let myself go daydreaming way out there into the future," said Lucas. "I was just trying to prepare for a few years ahead and I still do. I have always tried to be realistic. I would never have believed when I started that we would be where we are when we started. It wasn't until maybe four or five years ago that I thought: Nothing is impossible now. "
While Lucas' planning may have been crucial to the future success of the company, he is quick to give credit to others who have been there with him on the journey.
"A lot of it is being able to work hard, think outside the box, but I also surrounded myself with good people," said Lucas. "That was very important, because you can't know everything and you have to have a lot of people out there to help you. I couldn’t have done it without a good staff of people and I'll tell you we worked our butt off when we started and we still do."
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.
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