Tom Dundon: From Subprime Visionary to Potential NBA Champion Builder
Some entrepreneurs build companies. Others build empires. Tom Dundon has done both — and now he may be on the verge of building a championship team in Portland. From turning a struggling burger shop into lessons that fueled a multi-billion dollar finance empire, to reshaping the NHL’s Carolina Hurricanes into perennial contenders, Dundon has a track record of spotting undervalued opportunities and turning them into winners. The next chapter could unfold on an NBA court.
Tom Dundon’s path to becoming one of America’s most successful entrepreneurs began not with an instant win, but with a failure.
After graduating from Southern Methodist University in 1993 with a degree in economics, Dundon opened a small burger restaurant just off SMU’s Dallas campus called Izzy’s. It closed within a year, leaving him in debt but with a lifetime’s worth of business lessons.
In 1994, he took a job in the finance office of Frank Parra Autoplex in Irving, Texas. It was there that he met future partners, but Dundon was the one with the vision to build something much larger.
From Dealership Office to Subprime Finance Pioneer
Having worked inside the dealership, Dundon recognized a growing opportunity in subprime auto financing, which began to surge in the mid to late 1990s as Wall Street discovered the profitability of securitized auto loans.
Before this, most auto financing came from banks, credit unions, small local finance companies and large captive lenders tied to automakers like GMAC, Ford Credit, Toyota Financial, and Chrysler Credit, where I started my career in 1982. This was long before subprime auto financing existed.
The subprime model was clear. High interest loans, often 20 percent or more, could absorb a large number of defaults and repossessions while still producing enormous profit margins.
I know this firsthand. During this period, and after leaving Chrysler and then Mitsubishi Acceptance, my wife and I built the largest repossession company in the United States. American Recovery Service did about 14 million dollars in annual revenue when we sold it in 1999, and the closest competitor was doing less than half that. Subprime growth fueled our business, and we fueled theirs.
Founding and Selling Drive Financial
In 1995, Dundon co-founded what would become Drive Financial Services, securing early investment from FirstCity Financial in Waco and later from the Bank of Scotland.
By 2006, Banco Santander of Spain was looking for a foothold in the U.S. auto finance market and saw Drive as the perfect entry point. The acquisition gave Santander an instant three billion dollar loan portfolio. The smartest move Santander made was keeping Dundon as CEO, and the smartest move he had made to that point in his career was taking a bit less money off the table and keeping a 10 percent ownership stake.
What Dundon Built at Santander Consumer USA
From 2006 until the IPO in 2014, Dundon transformed the company.
Scaled the portfolio from three billion to tens of billions in managed assets
Built a nationwide dealer network with more than 14,000 dealer relationships
Expanded beyond subprime into prime loans, recreational vehicles, and unsecured personal loans
Secured exclusive financing partnerships, notably with Chrysler in 2013
Used securitization markets to recycle capital and maintain rapid loan growth
Drove margins among the highest in consumer finance despite high loss rates
When Santander bought Drive in 2006, the company was valued at approximately 600 million dollars. By the time it went public in January 2014 at 24 dollars a share, the valuation had grown to about 8.3 billion dollars. Today, Santander Consumer USA is valued at nearly 13 billion dollars.
Every bit of that growth can be traced back to Dundon’s vision when he created Drive, the aggressive growth strategies he executed while leading Santander Consumer USA, and the way he positioned the company to continue thriving after his departure.
Topgolf Investment During Santander Years
In 2011, while still running Santander Consumer USA, Dundon made one of his most successful outside investments, becoming an early backer and board member of Topgolf. At the time, Topgolf had only a small number of locations. Today, it has more than 90 venues worldwide, showing Dundon’s ability to identify scalable, high engagement businesses.
Departure and the Path Forward
Dundon remained Santander USA’s CEO until July 2015, continuing to innovate and position the company for sustained growth. By the time he left, Santander Consumer USA was the largest subprime auto lender in the United States, a position it still holds today.
Beyond Auto Finance and into Sports
After leaving Santander, Dundon shifted his focus to sports and entertainment ventures. In 2018, he purchased a majority stake in the NHL’s Carolina Hurricanes. Under his leadership, the team has made multiple playoff appearances, seen fan engagement and attendance surge, modernized its operations and facilities, and developed a culture of accountability and competitiveness.
I found this article published in the Raleigh North Carolina News & Observer interesting, as it was written on January 15, 2018, just after he had purchased the Hurricanes.
The Hurricanes had not made the playoffs in almost ten years before Dundon arrived, and they have made the playoffs every year since. The article describes Dundon’s desire to win, as well as his management style that transitioned smoothly from financing cars to positioning a major league sports franchise to go from a loser to a winner.
Why Dundon Fits the Portland Trail Blazers
Now, Dundon is set to lead the acquisition of the Portland Trail Blazers. The team has an exciting young core and, with Damian Lillard’s return, veteran leadership as well. This roster gives Dundon the opportunity to apply his proven formula: invest in talent and infrastructure, build upon an already strong fan culture, and balance financial discipline with bold moves designed to win.
From subprime auto finance to global sports entertainment, Dundon has consistently taken undervalued opportunities and turned them into market leaders. If history is any guide, Rip City might not have to wait long for another championship banner.