Curtis Sampson

He has created telecommunications companies that rang up strong returns for investors. And he’s found creative ways to keep Canterbury Park in the money.
Curtis Sampson

HOMEGROWN SUCCESS

 

1933: Born in Hector, Minnesota.

1955: Graduates with a degree in business administration from the University of Minnesota.

1966: NACC is formed with Apache Corporation as the controlling shareholder.

1968: Apache agrees to sell NACC to Continental Telephone.

1970: Sampson launches Communications Systems Inc. (CSI) to acquire Apache’s Suttle telecommunication equipment operations, enter the telecom consulting business, and make acquisitions.

1986: Spins off North American Communications Corporation (NACC II) as a public company.

1990: Hector Communications formed.

1994: Forms Canterbury Park Holding Corporation to acquire Canterbury Downs.

2006: Sells Hector Communications Corporation, with $157 million to shareholders.

2012: CSI operations include Transition Networks, Suttle, and JDL Technologies.

If Curt Sampson had stayed in Minneapolis, where he worked for Peat Marwick Mitchell as an accountant after college, he might have become a partner. Or if he’d had joined his friend LeRoy Carlson, now president and CEO of Chicago-based telecommunications company TDS, the parent company of U.S. Cellular, he might have found a spot in the TDS C-suite. Instead, in 1955, he went home to Hector, a small city many miles from the Twin Cities.

“But only by going back to Hector could things have worked out as well as they have,” Sampson says.

It’s worked out very well indeed. Now 79, Sampson has had a hand in building several multimillion-dollar telecommunications companies, with his western Minnesota hometown as his base. In the Twin Cities, he may be best known for his purchase and revitalization of the Canterbury Park racetrack.

The seventh child in a family of 10, Sampson got hands-on business experience as a teenager helping his parents develop a greenhouse when his father, a state employee, was pushed into early retirement. “Really, I grew up with nothing,” he says matter-of-factly. But Sampson did have industry. He was able to attend the University of Minnesota; during the last two years of college, he managed a cooperative dining business.

After graduation and three months at Peat Marwick, Sampson returned to Hector, where he began working with Harold Ericson to build a series of telecommunications companies headquartered there. Minnesota Central Telephone soon included five telephone companies in central and southwestern Minnesota. In 1962, a group of investors including Minnesota entrepreneur Curt Carlson formed Midwest Telephone Company, for which the Hector group acquired another five telephone companies. The area of service came to include the west Lake Minnetonka area, the Lindstrom and Center City area north of St. Paul, and 25 other telephone companies in eight states.

The group also included an Illinois company called Suttle, which manufactured telephone equipment to be located on users’ premises. “Ericson and I worked closely on all the acquisitions but Ericson left the financial and integration end of the business to me,” Sampson says.

In 1966, the Hector and Midwest groups were acquired by Apache Corporation, and oil and gas exploration company led by Raymond Plank, and combined to form North American Communications Corporation. In 1968 Apache accepted an offer to sell North American to a larger company, Continental Telephone—a deal that would have shut down the Hector operation.

“After the merger with Apache I had an offer to go work for TDS, but I decided I wanted to start over again on my own,” Sampson recalls. In 1970, with a staff of three, he formed Communications Systems Inc. One of CSI’s operations initially included the Suttle operations in Illinois, which were moved to Hector.

The First National Bank of St. Paul was prepared to underwrite the entire $750,000 Sampson needed to acquire Suttle from Continental. However, Sampson had already pitched his vision to eight investors, asking for $20,000 to $25,000 each. The total investment by the original shareholders was $365,000 with First Bank providing the debt capital. “Between 11 people we were able to come up with everything we needed,” Sampson says. “A $30,000 investment is worth $15 million today.”

Suttle, he notes, was “the cash cow that allowed us to do everything else.” The acquisition of telephone companies followed with the first in 1970. Cable TV franchises were soon acquired and the systems built starting in 1973.

The “second” North American Communications Corporation (NACC II) was formed when CSI’s cable operations became public in 1986. CSI shareholders received a share of North American for every two shares of CSI they owned in the tax-free spinoff. Growing to 75 cable TV systems, it was sold for $90 million in 1989, netting $75 million to shareholders.

In 1990, CSI formed Hector Communications Corporation and spun off its telephone companies and cable TV operations. HCC grew to 75,000 telephone and cable TV customers in Minnesota, South Dakota, and Wisconsin. HCC was sold in 2006 to three Minnesota telephone companies; shareholders received $157 million. At the time of the sale, Hector had $56.7 million in cash and no debt. Since the deal, CSI has acquired numerous other telecommunications equipment and telecom consulting companies.

Gary Pint managed the telecom and power products operations of 3M. (Hector cable TV staff provided assistance to 3M engineers who were developing a rural cable TV system.) Pint has has known Sampson for 35 years, and has served on the CSI board for the last 15 of those years.

“Curt has tremendous sensitivity to people,” Pint says. “Of course he’s highly disciplined, he reads people very well, and it goes without saying he’s very smart and entrepreneurial. He understands the application of technology and, although he says he’s conservative, he is prepared to take risks. But he is also very considerate of everyone he deals with and he is highly ethical.”

Sampson seized a particularly unusual opportunity in 1994, when he bought Canterbury Park, which had lost $10 million in its most recent season. Sampson had developed an interest in horse breeding from a colleague on the United States Telecommunications Suppliers board.

Since then, Canterbury has charged back, with Sampson’s son, Randy, in the saddle as CEO. Canterbury’s most recent win was a landmark deal with Minnesota tribal governments that cleared the way for legislation allowing additional card gaming and larger purses at the track and off-track betting at Indian-owned casinos. Governor Mark Dayton signed the bill into law in May.

With a month left of the 2012 legislative session, Sampson proposed to the board of Canterbury that it was time to seek cooperation rather than the kind of legislative confrontation that had typified relations with the two parties in the past. Sampson says Randy found that the negotiations with the Shakopee Mdewakanton Sioux Community were remarkably friendly. The agreement significantly increases the purses, which he believes will revive horse racing in the state of Minnesota and preserve the future of Canterbury Park. The cooperation agreement was signed June 4.

It’s a lucky break for Canterbury. Indeed, Sampson says that some people have told him, “You’re the luckiest SOB I’ve ever met.”

“And what I say to them is, ‘You’re right. I was lucky five times in a row.’

“How does the old saying go? ‘Luck is where opportunity and preparation cross.’”