DON’T BELIEVE THE LEXINGTON HERALD-LEADER
Kentucky’s special legislative session may seem like ancient history now, but I’m going back to revisit a misleading article published in the Lexington Herald-Leader on June 14, one day before members of the state House and Senate met in the capital in Frankfort.
Under the headline, “100,000 Horse Industry Workers?” the
article written by John Cheves called into question the number of jobs attributed to Kentucky’s horse industry. It accompanied another piece by Cheves, entitled “Horse Industry Has Problems,” that suggested things in Kentucky aren’t really as bad as people in the horse industry are making them out to be.The intent of the two articles, I assume, was to convince state legislators, who may have been on the fence about whether or not to vote “yes” on racetrack video lottery terminals (VLTs) or slot machines during the special session, that Kentucky’s horse industry a) isn’t really as big as people have been saying it is and b) no other state is ever going to challenge Kentucky as the national leader in foal production, so its tracks don’t need to offer the same expanded wagering menu that so many other states have.
The article about the number of people who are employed as a result of Kentucky’s horse industry was borderline outrageous. The author seemed to dismiss the 2005 economic impact study commissioned by the American Horse Council and its conclusions that there are approximately 96,000 direct and indirect jobs in the Bluegrass State resulting from the horse industry (all breeds and disciplines). Kentucky was one of 15 states for which detailed information was provided as part of a national study conducted by Deloitte Consulting. The study concluded there were 51,900 people directly employed in the horse industry in Kentucky. It also said that as a result of the horse industry’s spending power, there were another 44,100 “induced” or indirect jobs. Those jobs are not in the horse industry (they represent all kinds of jobs that horse industry people are responsible for supporting), but they wouldn’t exist if the horse industry wasn’t here. It’s a safe bet that if we lose some of those 51,900 direct jobs, the “induced” employment will fall as well.
The writer seemed to be saying the number was somehow “fudged,” that smoke and mirrors were used by Deloitte to get to 96,000 jobs. Jay Hickey, the president of the American Horse Council, said to his knowledge every industry that conducts an economic impact study does exactly the same thing. “I can tell you, they didn’t come up with this methodology just for the horse industry,” he said.
The article says the Kentucky Equine Education Project uses the 100,000 employment figure in its advertisements and that it is somehow misleading. But if the writer had gone to KEEP’s website (
www.horseswork.com), he would have seen a fact sheet about the industry that claims between 80,000 and 100,000 direct and indirect jobs. If anything was misleading, it was the conclusions of the Herald-Leader article.From a monetary standpoint, the direct economic impact of the horse industry in Kentucky is $2.3 billion, according to the same study. The total impact on the state (direct and indirect) is $3.5 billion.
Incidentally, Deloitte concluded that the total number of direct jobs in the horse industry across the United States is 453,612, and there are nearly one million “induced” jobs, bringing the total direct and indirect employment to 1,411,333. Nationally, the direct economic impact is $39 billion, and it increases to a total of $102 billion when the indirect impact is factored in.
But let’s go back to Kentucky for a minute and the Herald-Leader story, which concluded there are only 51,000 horse industry jobs in the state—not 96,000 or 100,000.
That’s still an awful lot of jobs. How many other industries in Kentucky employ that many people? One thing’s for certain: the number of jobs in the horse industry will be lower the next time the legislature meets. Horses and the jobs that go with them are leaving the state to race where purses are higher and breeders’ incentives more lucrative.
That’s no myth.
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Tags: deloitte consulting, economic impact study, horse industry economic impact, horse industry employment, jay hickey, kentucky equine education project, kentucky horse industry employment, kentucky's horse industry economic impact, lexington herald-leader, Paulick Report, Ray Paulick
June 29th, 2009 at 1:42 pm
Thank you Mr. Paulick. I was affraid that no one noticed the way our local paper was misleading us.
June 29th, 2009 at 1:48 pm
Sounds like Mr. Cheves (Herald-Leader) may be getting a check from the same group(s) that is paying David Williams off!
June 29th, 2009 at 1:50 pm
Ray,
We use Deloitte for our audutuing purposes (Tote Related in Vegas). They are some of the most meticulous peopel I have ever dealt with. Their methodology is sound and any resulting information from them, in my opinion is accuarate to a fault. As a lifelong person in the industry, it saddens me to realize that even so called horse country, a media representative can so maliciously take it upon himself to distort facts and aid in destroying an industry or in htis case, 1,000’s of people’s livlihoods.
June 29th, 2009 at 2:17 pm
A client, wishing to headquarter in KY, has sent or is sending, 5 head to NY. That is $5X a day lost income to the farm and more than a day’s pay for the help.
Add to that mares abandoned in lieu of paying overdue board bills and explain how the payroll gets paid, let alone maintained.
Moreover, two friends are abandoning established KY farms for partnerships in other states.
This does not sound like a rosy future for things equine in KY.
Thanks for nothing, Williams.
June 29th, 2009 at 2:28 pm
I wouldn’t expect the Herald Leader to necessarily be a cheerleader for the horse business nor should they be for the horse business or any other for that matter. However, given the importance of the issue and the horse industry’s impact on the Lexington area, it shouldn’t be too much to expect that they at least get the facts right.
I’ve heard the paper referred to as the Herald “Misleader” before, perhaps the moniker fits.
June 29th, 2009 at 2:33 pm
That’s why we call it the Herald Misleader - and do not read it but instead use it for paper under the littlerbox.
June 29th, 2009 at 2:48 pm
Ray said, “Horses and the jobs that go with them are leaving the state to race where purses are higher and breeders’ incentives more lucrative.”
More important is where are the customers going. Until that is answered, the future will remain bleak. Slot machine jockeys are at best a band-aid on a heart attack.
June 29th, 2009 at 2:49 pm
The same games are played here in Ohio by the majority of the “major” daily newspapers. Tracks, owners and breeders have been demonized over the past week due to the slots proposal for the 2010-2011 state budget. The plan to close a nearly $3.5 billion hole in the budget now appears to be a dead issue. And it’s at the point where the state is removing trash cans from state parks to save money……that is how bad things have gotten here.
June 29th, 2009 at 2:50 pm
As a trainer, I have stayed through 3 Kentucky winters, in order to race at Turfway Park.
I have made a point of NOT running in Indiana, nor Ohio this year, all in hopes of supporting local racing.
Three of my string have now returned home to their owner in California, one of them a KY bred who would have done well continuing to race here. But purses are becoming dismal. People are running out of money. This is an out of state owner who sent her horses all the way here, with only one being a KY bred.
This is income lost. Owners are leaving.
And since this seems to be setting the current trend, I will be heading elsewhere with my remaining string for this winter. First time for everything. I never dreamed of going to another venue for racing during the winter. Things have changed. It’s tough enough laboring through the climate 7 days a week- and now there doesn’t seem to be a point in it, after all- purses won’t be enough to pay bills. Might as well move on.
Hopefully we can come back in the spring.
June 29th, 2009 at 3:31 pm
It’s simply mind-boggling how Kentucky is unwilling to support it’s signature industry. I never, ever would’ve thought this day would come. What about tourism? Why bother going to Kentucky if it doesn’t have horses? What makes it different from any other mid-west state without them? Nothing. The politicians clearly have no idea how severe the trickle-down effect is going to be.
June 29th, 2009 at 3:41 pm
I cannot, for the life of me, understand who is paying these yoyos if its not the casinos.
The only other scenario that makes any sense is Keeneland is funding these guys in the hope that Churchill abandons the state, leaving the Kentucky race meet/Derby in Keeneland’s hands.
June 29th, 2009 at 5:59 pm
Ray,
Have you sent this to the Editorial department of the Heral Misleader. I certainly hope they run it if you do….the bias of this Lexington paper is a disgrace to most journalist.
Signed,
Avid supporter
June 29th, 2009 at 6:14 pm
Don’ worry about a think, just close your eyes and get on the Obamo, Poluse,Reed, Barnie Franks and Chris Dood’s band wagon they seem to have all the money. Anyway they will be running all the Track Tracks soon just like everything else.
June 29th, 2009 at 7:01 pm
ray,
The print media has had a liberal bias for decades.
“If we like the news we’ll print It,if not we’ll Slant It”
June 29th, 2009 at 7:22 pm
Well Jason, if casinos are paying them that means casinos are funding both sides of the argument, since Turfway is partially owned by a casino company. Now what does that prove?
You want to convince more people in Kentucky to go along with this? Be polite, don’t go around accusing everyone who doesn’t agree with you of hating the horse industry or being a corrupt SOB in the pocket of some even more corrupt cabal. Remember that these are our friends and/or neighbors, or for those outside Kentucky, the neighbors of our friends. You aren’t going to convince someone that they can’t live without you if you’re busy convincing them that you can’t live with them.
June 29th, 2009 at 7:27 pm
Ron and Steve,
You guys crack me up. The Republicans (the more conservative of the two parties) in the Kentucky legislature kill the slots bill and somehow you’re turning this thread into an attack on Obama and a “liberal media bias?” At least point the finger of blame at those responsible.
June 29th, 2009 at 7:56 pm
Bob Lee,
I believe we were talking about the Lexington Herald-Leader.
Don’t get your panties in a bunch.
June 29th, 2009 at 8:09 pm
Hey Steve,
My “panties aren’t in a bunch” that’s why I said you guys “crack me up” as opposed to something like you guys “piss me off.” I’m not upset, just a bit confused. As a former journalist I’d never heard of the Lexington Herald-Leader or any major daily newspaper in Kentucky being referred to as “liberal.” I guess it’s all relative, perhaps my own bias coming into play. I’m from the land of “commie, pinko, liberals” (San Francisco) and from my perspective the Lexington Herald-General is rather conservative.
June 29th, 2009 at 8:24 pm
Fair enough Bob,
Personally I’m against Slots,Can’t stand the things.There about as ugly as a Tattoo on a good looking Woman.
By the way,which party is responsible for the decline of horseracing in Cali?
June 29th, 2009 at 8:40 pm
Hi Steve,
I don’t think the decline in racing in Cali is the result of the action or inaction of either dysfunctional party. They’re both too busy screwing up the overall economy here to give horse racing a second thought. That said, from most of what Ray and others in the industry have written it does appear that responsibility for the death of the slots bill in Kentucky falls squarely with the Republicans. The news reports suggest the votes were largely along party lines, i.e. Dems=yes and Repubs=no.
While I’m not opposed to slots on any moral grounds I also believe (as someone previously mentioned) it’s like “a band-aid on a heart attack.” Slots will not solve the major problems confronting horse racing.
June 29th, 2009 at 9:08 pm
Maybe we can get someone from Cal. who is in the Horseracing industry to comment on which party has been more helpful to the industry.
I do know that The dems have had majority power for two decades.
June 29th, 2009 at 10:20 pm
If you mean the state legislature - yes the democrats have held a majority for the past couple of decades. Of course that is somewhat mitigated by the fact that Republicans have occupied the governorship for 15 of the last 20 years.
June 29th, 2009 at 10:45 pm
It’s not the Dems or the Repubs. The govt. has only a small role in the demise of racing. Approving confiscatory takeout is the governments biggest mistake. However, waiting for the government, either side, to solve all problems is a sad commentary on the collapse of our society in general. I haven’t read one article in the newspapers, trade journals, or blogs, addressing declining attendance and interest in racing. Slot machines doesn’t address that. The casinos specialize in what they call player development, getting people in the door and keeping them there. Racing has never even acknowledged that they have customers. Racing does everything that they can to inhibit attendance, from parking fees, to admission fees, programs, warm beer and cold hot dogs. Casinos have free parking, no admission, good food - usually complimentary, and free drinks for players. Combined with better odds, it’s no contest as to where is the best place to spend your gambling dollars.
June 29th, 2009 at 11:18 pm
Slot machines benefit the Racetracks and Horseowners It does nothing for the Horseplayer.
June 29th, 2009 at 11:45 pm
I agree that the government and political parties are neither the problem or the answer when it comes to the demise of horse racing. The industry has failed across the board to address the single biggest problem it faces - a complete inability to market the sport to new and younger fans. When it comes to marketing, this industry is living in the Stone Age and as a result both other sports and other forms of gambling have passed it by. Remember the NTRA’s big marketing push last year? It consisted of a few print ads and TV spots etc. focused on the slogan “Go, Baby, Go.” That’s the industry’s best answer to a coordinated effort to attract new fans?
Churchill decides to try out Friday night racing and they draw nearly 30,000 fans. Some industry pundits write about it as if it was a brilliant new initiative by Churchill. Any marketing 101 class at the local community college would have reached the conclusion that Friday night racing at Churchill would bring thousands of entertainment-seeking new fans to the track for a good time. Duh. Why did it take the corporate geniuses at CDI decades to reach the same obvious conclusion?
June 30th, 2009 at 6:37 am
“100,000″ is a totally made up figure. A group like KEEP pays a third-party to do a study that is nothing more than a math equation dependent on assumptions. The author of the study makes darn sure the assumptions please the group paying the bills.
I don’t believe the people with jobs in this state dependent on horse racing would fill Rupp Arena. I’m not even sure it would fill the lower bowl.
You guys need to spend a few days outside of the horse farms around Lexington and see what is really going on in Kentucky. Most people in this state could not care less about a relatively few wealthy horse breeders and very wealthy track owners. Go into a McDonald’s in Paducah or Bowling Green or London or Covington or any part of Louisville except within two blocks of Churchill Downs and nobody cares how much Brereton Jones or some oil sheikh sells a yearling for.
June 30th, 2009 at 7:25 am
ah bc
State traveler, eats at the finest all over the State and talks of nothing but horses to the huddled masses.
The accounting firm is wrong but ole bill knows his horses…yp…sure
tell the boys from across the river hello
June 30th, 2009 at 8:15 am
Billy Crockett, so you don’t care that KY is losing a huge part of your state’s history, and what makes it unique from any other state? So tell me, why should I visit your state? The midwest in general is pretty generic. I lived in Chicago for a time and the city itself was interesting, but get outside it and there isn’t much difference between IL, IN, IA, TN, WI, etc. I really don’t mean any offense, but there isn’t much that makes any of them stand out from the other. TN has country music, I guess. But Kentucky has such a rich history intertwined with horses and that’s its identity. Why should I even bother with your state if it’s going to look like all the other midwest states? My husband and I even planned to move there in the next few years to indulge my lifelong passion for horses. Looks like we may be headed for NY or PA instead.
June 30th, 2009 at 8:35 am
Billy… your comment that “100,000 is a totally made-up figure” is an insult to the intelligence of people who know how the study was conducted.It was extensive and based on in-depth surveys of businesses throughout the state. I saw a copy of the survey, and it was very detailed in its scope. The Paulick Report will continue to allow your tiresome and repetitive opinions to be placed in our comment section, but I’m not going to allow some of your outrageous lies to stand without rebuttal.
June 30th, 2009 at 9:21 am
I think we have let govenrnment take over and/or get into our business far too long. As a child growing up in KY we had to make the farm productive in order to eat. We had no incentives other than paying our bills and living within our means. As time went on we got incentives NOT to grow crops. Sounded good. Now we have PDR and farmers get money not to develop. More money in our pockets and less incentive to take care of the industry. It’s still the ‘good ol boy’ sysem here and always will be. You can’t buy your way in-but we will take your money. You can be born into it, not have a dime but, still have the clout. Someone will take care of you. I think we are simply running out of suckers from out of state. The system has now trickled down to almost everyone in our state in one way or another. Look around-how many deals have you done that were on the shady side of good business?
June 30th, 2009 at 10:16 am
If you think the horse business only has an impact on horse people you are way off base. Try checking the real estate market. Due to our wonderful heritage of equestrian businesses, we have prospered for over 200 years. Many books and movies have made our state famous. Not to mention the Kentucky Derby. When people can’t buy a home because they don’t have a job due to this economy, we in turn lose builders, vendors, designers, carpenters, painters, furniture stores, car dealerships, clothing stores, restaurants, lumber companies, and the list goes on. But if you are in government I suppose you can write your own check? How many homes are you willing to buy to make up the difference? I see so many people giving to the homeless in other countries while our own schools have dumbed down to make sure no one is left behind. Charity starts at home and it also starts with the exercisers and jockeys who risk their lives each day. The horse business is a hard business and we should get back to business and away from government programs. Elect the people we need and make them stick to their promises. If they lie, and you know they do, impeach them and find someone who CAN make our lives better.
June 30th, 2009 at 10:41 am
Ray,
I am very familiar with reports of this type. The key ingredients are the assumptions made and the multipliers applied to the assumptions.
I have no-doubt there was an extensive canvassing of businesses to provide documentation - both quantitative and anecdotal. However, as with almost every survey such as this, the end result is a big round number. In this case 100,000.
Does anyone really think a purely scientific survey would end in a big, round number such as 100,000.
Just as with gaming revenue projections, these types of studies seem to always overestimate in favor of the legislation being proposed.
I don’t hear people not close to this business talking about lower purses and smaller sales number at Keeneland. There are a lot of people who would like to be able to play slots closer to home. Their motivation is convenience and fun…not helping the horse racing business.
There are a lot of people who would like to see their taxes lower.
The horse racing industry is very insulated. Just because every consigner one knows thinks Steve Williams is the anti-christ doesn’t mean most Kentuckians do.
The bill that failed was illogical. It made the argument that purses were too low but then provided the overwhelming majority of the benefits to the track owners themselves rather than the horsemen. The track owners in Kentucky would have received one of the most lucrative revenue splits in the country.
I happen to firmly believe if the bill had been scaled down in scope to where the majority of benefit went to horsemen and the state, it had a pretty good chance.
Ray you really have a choice. You can continue to rail against Senator Williams and make the horse industry the blood enemies of the Republican party. Or you can really think through what would make legislation that would help and even save the horse industry in Kentucky as we know it palatable to Republicans and people not connected to this industry.
I will say this…after the Obama debacle, people in Kentucky are going to come out from every corner of the state to vote against Democrats for several election cycles. Obama will be to Democrats in 2010 and 2012 what Nixon was to Republicans in 1974 and 1976. Utlilizing a strategy based on beating Republicans in Kentucky during the next 4 years is a total non-starter.
As long as track owners benefit three times more than both the horsemen and the state, this issue is effectively turned out to pasture.
June 30th, 2009 at 10:56 am
The Herald Leader should be called out for its long-standing negativity towards the central Kentucky Thoroughbred horse industry. I can’t for the life of me understand why this exists at our primary local news source. If you read the Courier Journal’s coverage of the same subject, you will find a fair and balanced evaluation of the situation. One recent Courier headline reads ” Saving Kentucky’s HORSE HERITAGE: Lawmakers’ defeat of slots puts state’s thoroughbred franchise at risk”. Yet or own paper calls into question the industry’s characterization of its growing competitive disadvantage vis a vis other states in a series of articles published THE DAY BEFORE THE SENATE COMMITTEE VOTE to approve the House’s historic bill. I vote to cancel any and all subscriptions to the Herald Leader. It is an uncalled for and baseless disservice to our community to repeatedly discredit the horse industry in this manner.
June 30th, 2009 at 11:53 am
What the whole slots issue brings into focus is that the number of folks employed by the industy is a whole lot less than 100,000. A whole lot less! And, when you view the employment total from just the perspective of employment at the racetracks the number gsts whittled down even farther. How all of that gets presented to the public is a function of whatever employment-related argument you’re supporting. The scaremongers use 100,000. The naysayers use 51,000. Even the latter figure is inflated if you’re talking about what’s at risk where employment directly related to racing is concerned.
But, let’s put it all in perspective. How many people does the fast food industry employ directly and indirectly in Kentucky?
June 30th, 2009 at 2:59 pm
Richard R– you are a frickin’ idiot. At the end of the day, the slots issue does not call into question how many people are directly or indirectly employed by the KY horse industry. Even a moron like you has to admit that the industry employs A Lot of people, whether you like to admit it or not. The fact is, the fast food indusrtry ain’t KY’s signature one. Not one person travels from anywhere else in the world to KY to eat fast food. What’s more, the fast food industry in KY ain’t struggling for its life tooth and nail. Why are idiots like yourself obsessed with whether or not it’s 50,000 jobs or more? That’s not the only thing this is about. You want to live in the state of KY without a horse industry more power to you. I’ll betcha they’s a whole lot more that 50,000 KYians who wouldn’t want to join you and your tired arguments there.
June 30th, 2009 at 3:37 pm
Ray:
Please send this to the H-L.
June 30th, 2009 at 5:43 pm
Ray…I’ve got a question for you:
“The writer seemed to be saying the number was somehow “fudged,†that smoke and mirrors were used by Deloitte to get to 96,000 jobs. Jay Hickey, the president of the American Horse Council, said to his knowledge every industry that conducts an economic impact study does exactly the same thing. “I can tell you, they didn’t come up with this methodology just for the horse industry,†he said.”
Question is, how do I interpret Hickey’s remarks? I’m not a fan of AHC because of their passive, aggressive stance on human consumption horse slaughter, the Unwanted Horse Coalition, etc. Was Hickey saying that the Deloitte study was fudged or that the protocol/survey methodology was sound?
Seems like this Herald Misleader thing has flipped some folks’s switches…interesting posts.
June 30th, 2009 at 8:50 pm
Someone please tell me how much $ it would take to get BigDaddy (#35) and Richard R (#34) and put ‘em in a cage until only one walks out? Now that would be some entertainment. We could even get Keeneland to sponsor, promote and stage the event. BTW, my $’s on BigDaddy to be the one to survive the cage match!
July 1st, 2009 at 8:33 am
D. Masters,
Let’s look at this objectively. If firm A has a reputation for generating economic impact studies which are less flattering to their clients and firm B has a reputation for more flattering reports, who’s still going to be in business in 10-15 years? Fudged data, heavens no! Choosing the more advantagous of options when making assumptions or projecting revenue is not fudging. Wink, wink.
July 1st, 2009 at 6:25 pm
“Statistics are like a drunk with a lamppost—used more for support than
illumination.” Winston Churchill