South Central Business Association

How does the Kentucky Derby affect our Economic Community?

Nov 19, 2001

By David Mcginty
The Courier-Journal

A new study of the economic impact of the Kentucky Derby, commissioned by Churchill Downs, estimates that this year's Derby weekend pumped about $205 million into the Louisville-area economy.

The study, done by the Louisville firm Wilkerson & Associates, came up with a much larger number than a 1992 study, which estimated the Derby had an impact worth about $60 million.

Several factors may help explain the difference. The 1992 study, commissioned by the University of Louisville Equine Administration Program, covered a two-day period, including the Kentucky Oaks on Friday and the running of the Derby on Saturday. The current study includes the Thursday before the Derby.

Besides the extra day, other factors have undoubtedly contributed to an increasing impact, said John Asher, vice president of communications at Churchill Downs. Derby weekend costs have gone up, and ''there has been a significant bump in attendance at the Kentucky Derby and the Kentucky Oaks'' since 1992, he said.

In 1992 attendance at the Oaks was 79,824 and at the Derby 132,543. This year's attendance was 102,904 at the Oaks and 154,210 at the Derby.

The current study also includes money spent at Sports Spectrum, an off-track wagering facility that was not in use during the 1992 Derby.

The new study attempted to assess the various kinds of tourist spending -- on such things as food, lodging, souvenirs, fees and gasoline -- by someone coming to the Derby, and to incorporate the spinoff effect the spending would have as those dollars were re-spent in the local economy.

Including spending outside the Louisville area, the study found the Derby's total impact was $217.8 million.

The study concluded Derbygoers directly spent about $137.8 million this year, and that this money produced indirect spending of $80 million more. That includes spending while traveling to or from Louisville.

The impact on Jefferson County's economy was about $194 million, while the impact on Oldham and Bullitt counties was $1.1 million. Clark, Floyd, Harrison and Scott counties in Indiana received a boost of about $9.8 million.

The study includes about $18 million wagered at the track at Derby time. Most of that money would be returned to track patrons in the form of winnings, some of which were no doubt immediately pumped into the local economy.

Asher said the track has wanted to do an updated study for a couple of years, and the results will help it in its marketing efforts and in attracting sponsors.

''We think we mean a lot to this community and have for a long time,'' he said.

The figures are also likely to become an arguing point for the track if it seeks assistance from the General Assembly next year -- as track officials have broadly hinted they might. And Louisville Mayor Dave Armstrong said Friday, ''I'm in their corner.''

''I can't verify the financial impact'' of the Derby, Armstrong said, ''but I know it's significant.'' Yet Churchill Downs' facilities are outdated compared with competing sport facilities, he said.

''Our largest sports attraction is Churchill Downs, and we're still locked in the 1950s,'' he said. ''The accommodations are not as luxurious as so many other sporting facilities. I think Churchill Downs ought to be a Taj Mahal that people from around the world come just to be able to see.''

''It is impossible to calculate what the Kentucky Derby means to the community,'' said Mike Bosc, a spokesman for Greater Louisville Inc. ''It's enormous. It's one of the most recognized icons in the world.''