Home » Lane One-on-One: Karl Schmitt Jr.

Lane One-on-One: Karl Schmitt Jr.

LSC has brought more than $800M to the Louisville community in the past 20 years

By Mark Green

Karl F. Schmitt Jr. became president/CEO of the Louisville Sports Commission in June 2015.

Editor’s note: This interview was conducted before the COVID-19 outbreak shut down the U.S. economy.

Mark Green: The Louisville Sports Commission was founded in 1999 to boost the area’s economic vitality through sports. What was that founding vision?

Karl Schmitt Jr.: The idea was to take advantage of the growing sports tourism and travel market sector. If you have had any involvement in travel team sports or traveled to another city to run in a marathon or watch a ball game, that is the industry that defines us. Twenty years ago, that industry was growing and it continues to grow. The leadership in the community thought we needed an organized effort to pursue sports travel tourism and land some of that for Louisville. There was already an industry that had sprung up – sports commissions formed around the country – and we were a little bit late to the party, but earlier than some.

MG: How successful has the organization been at fulfilling that vision?

KS: The dollars brought to town through just the sporting events, efforts and partnerships that the commission has in this community is somewhere north of $800 million over 20 years. That does not include the Kentucky Derby and what goes on at Churchill Downs and the University of Louisville and others. We do not measure all sports activities. We are focused on the inbound sports travel and tourism sector.

That $800 million we’ve measured is generally in room nights. For fiscal year 2020, which started July 1, 2019, and will run through June 30, 2020, we project somewhere in the neighborhood of 140,000 room nights. The dollar counts for room nights include what people are going to spend when they come here – hotel, gas, restaurants, attractions. That’s where that $800 million number came from on that 20-year stand.

MG: So the sporting events sector is a specialty sector of the tourism industry?

KS: LSC is a nonprofit, 501(c)(3) Kentucky-based LLC with a board of directors. We have an operating agreement with Louisville Tourism to manage the sports market segment in conjunction with them. They have resources they dedicate toward it as well. It has been the largest market segment for the past seven years. The reason many cities have a separate sports commission is because sports is very much relationship-based, and once you attract an event, the execution side on hosting a sporting event can be extremely complicated and much more manpower-oriented at times than other types of big-box conventions.

MG: Is the sports sector stable? Growing? Contracting? What are the key drivers?

KS: It continues to grow. It’s more than an $8 billion market in the United States, and much larger than that globally. What’s driving it is passion, fan avidity and people’s interest in their kids having opportunities. When there was a huge downturn in the economy a decade or more ago, we saw that people would give up dinner out or rounds of golf so their kids could still continue to play travel ball. Or they might run in a marathon in another city. That passion for sports, and all of those things that youth sports combines have continued to fuel growth. And there are more opportunities.

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In the last recession, while other travel-industry segments suffered double-digit declines, sports was in the single digits and made a quicker recovery.

MG: What is LSC’s annual budget and where does it get its revenue?

KS: We’re about a $1.6 million operation. We get approximately 30% of that from Louisville Tourism through an operating agreement. For the rest, we own and operate eight events that have their own operating budgets, and then we go out and raise money.

MG: What are those events?

KS: We own three running races: the Louisville Pure Tap 5k; the Norton Sports Health 10k; and the Urban Bourbon Half Marathon, presented by Jim Beam. We own the Paul Hornung Award presented by Texas Roadhouse, the college football award, which this year honored Lynn Bowden, who also got our Howard Schnellenberger Award for the MVP of the Kentucky-Louisville football game. We own the Louisville Corporate Games presented by Humana; its tagline is “Field Day for Adults” and it’s a health-and-wellness play to get people out and moving. We just created an esports event called The ACE eSports Championships. We own and operate the Live in Lou Cross-Country Classic, which is the largest college cross-country meet in America. Live in Lou is Greater Louisville Inc.’s talent attraction program tag, and we struck a deal with them to help them get branding nationally from that market segment with kids.

The number of events we own and operate comes and goes, because if they’re not financially successful or don’t meet our other objectives, we will ditch them and move on. We got into the other events for three reasons: some are for marketing; some are for community health and wellness, such as the running races; and others are profit centers for us where we can take 100% of the proceeds and plow that back into our operation.

MG: What are the primary and most significant activities that LSC engages in?

KS: We love events that come back every year, and we particularly love events that people in the community and state appreciate. We host two of the largest girls travel volleyball events in the country, each of which will lay down over 120 volleyball courts; they’re here every year. We host three of the largest girls travel basketball events; they’re here every year. We host the largest indoor archery tournament in the world; it’s youth and middle school/ high school archers from all over the United States. We host a lot of cycling, a lot of BMX and other cycling disciplines. Cycling, basketball, volleyball and archery have been our core. We have also hosted a lot of fencing events, although we don’t have any here on an annual basis.

MG: What events attract the most people to town?

KS: The largest are the three girls basketball events that occur over three back-to-back weekends in late June and July. Approximately 18,000 female basketball players between the ages of 13 and 17 come here to play, and so do more than 400 college coaches; it is during the open recruiting period. Girls basketball has become our largest sport.

Volleyball is second, and after that, archery. A new one we added two years ago is wrestling, for middle and high school up through college. We see that as a growth area for us. Travel baseball is big, too.

MG: How do you find events?

KS: We’re very much a partnership-driven organization. Our most important partner is Louisville Tourism. After that, we work very closely with our natural parks and with our three universities. We work very closely with City Hall in terms of opportunities to use parks and roadways. We study the market in terms of what events out there in the inbound sports travel world match up with our facilities, our hospitality industry and our available dates.

For example, we don’t try to attract any event that would take place Kentucky Derby weekend. Louisville also has a couple of large, convention-type events that swallow up the whole city, like the North American Farm Machinery Show. So we know what weekends work best, and after that it’s a question of relationships.

MG: What type of relationships?

KS: We work very hard on our relationships in three areas. You have national governing bodies of sports such as the NCAA and USA Volleyball, USA Gymnastics, USA Fencing; these are organized bodies that are either the road to the U.S. Olympic Committee, the NCAA or NAI or standalone organizations. Separate from those are the private independent operators. Ironman, for example, is owned by an organization called the World Triathlon Corp. There are a number of organizations out there that own multiple events that we work with. Then the third one is on the international front, when we believe we can host events of that nature.

There are industry trade shows that we attend on a regular basis. Our national association, Sports EPA, puts on a large trade show every year. There are two or three others we go to. We make sales calls to Colorado Springs, Colo., where about 75% of the national governing bodies of sports are headquartered. We make sales calls to Indianapolis, where about a dozen or more national governing bodies of sports are located. In addition to the NCAA, Indianapolis has gymnastics, USA diving, USA track and field. We are constantly making sales calls, and after that it’s very much relationship-based and finding how you can make the link between a rights holder and a rights holder’s event.

MG: What is the size of the staff?

KS: We’re a staff of eight. Greg Fante is our VP of sports development, our sales person. Greg has been at it for longer than the Sports Commission has been in existence. He is very well-respected within the sports travel industry, and is our point person on sales and event attraction.

We also have a vice president of revenue, Julie Howell. Her job is to raise dollars for our organization and occasionally help clients when they’re coming to town. We have a director of marketing and public relations and a director of operations who helps the event operators when they come to town and make sure they have everything they need. We have one person who oversees all of our three running races. We have an office coordinator, a researcher, and myself.

MG: Is there a typical timeline involved in competing for, winning and holding one of your events?

KS: In sports, the timeline can be fairly short, because it’s seasonal. Occasionally we’re looking at one- or two-year timelines, but sometimes we’ve had a piece of business we’ve been working on for six or eight or even 10 years before we can land it. But it’s usually a one- to three-year situation. Three weeks ago, along with our local universities, we completed bids on hosting 70-plus NCAA championships and regionals. It’s on the bid cycle that would start in the fall of 2022 and run through the next four years.

The NCAA is by far the largest single bid event. Each of them has an RFP that you look at and a whole set of rules to respond to. It’s very time consuming, but it’s also now a pretty good model they have in place.

MG: How well does Louisville compete for events? 

KS: We think we’re an overachiever. Our professional trade association, Sports EPA, divides the world into three market size segments, and we’re one of the smaller cities in the large market sector, so we’re competing against large cities all over America. We more than hold our own. The local hospitality industry would agree that the amount of room nights that we generate through inbound sports travel is significant.

MG: What are Louisville’s advantages and disadvantages?

KS: In the sports world, it’s about facilities. We have some terrific advantages in facilities, particularly our state fairgrounds, which is 1.2 million s.f. under roof and 750,000 contiguous feet of Class A exhibit space. Those large volleyball, basketball and wrestling events we host, and the archery event, can take place under one roof, which is incredibly convenient for the event operator and helps enhance the experience for participants and also their travel people, because you can go to one facility and be there all day. A lot of times those types of events are in three or four different facilities in the same city. The state fairgrounds and the Kentucky Exposition Center are enormous for us, as is the Kentucky International Convention Center downtown. 

We also have several spectacular championship-caliber facilities, such as the KFC Yum! Center; the new Lynn Family Soccer Stadium where Louisville City Football plays; and the baseball Bats stadium. Those facilities help us get big championship-caliber events like women’s Division I volleyball national championships and men’s regional basketball championships. We just bid on all three divisions of the NCAA national championships in soccer for Lynn Stadium.

Louisville Metro government and state government and our citizenry and adjoining counties have been terrific in allowing us to use roads and waterways for things like an Ironman (swim-bike-run competition). Our parks in Louisville are great facility advantages.

We’re facility deficient in a couple areas. We are just in the process, through the efforts of the Louisville Urban League, to build a state-of-the-art indoor track facility called the Norton Sports Health Athletic and Sports Complex. It allowed us to just bid on Division I, Division II and Division III indoor track national championships.

The other huge advantage we have is our central location; it’s easy to get here for a lot of fans and participants. We have a tremendous hospitality industry with hotel rooms at various rates. We have a wide range of dining options and are constantly on lists of the top foodie cities in the country. Then, there is ease of getting around. We are way more preferable than a city like Atlanta or Chicago or Dallas in terms of driving.

Sports fans like to do sports stuff, and we have iconic sports destinations in Louisville. The Muhammad Ali Center, the Slugger Museum and Bat Factory, and the Kentucky Derby Museum and Churchill Downs have been big selling points for us. Those are places that people like to visit, and those help us in our sales efforts. 

MG: What would be on your wish list?

KS: We have been working for almost the entire life of the Sports Commission on getting a multi-field, a rectangular-field sports complex that can host soccer and field hockey and rugby and Australian-rules football. We’re talking about 16 to 20 fields where you can host very large competitions – ideally somewhere in the area of 80 to 100 acres. We don’t have that in Louisville. We believe it’s (going to be) there somewhere, we just haven’t quite figured out the right plot of ground. The good news is that both Metro Government and state government believe in and understand the public-private partnership (P3) model. The P3 model that we have discussed is that a government entity would provide the land at little or no cost and a third party investor would come in with the capital (for construction) and also locate an operator. You could host large soccer and field hockey types of events. We don’t have that, and that’s probably our No. 1 deficiency.

MG: Is the LSC working in collaboration with the NBA2LOU organization headed by Dan Issel that’s trying to bring a professional basketball team to Louisville?

KS: We have been. It’s not exactly in our space of the inbound sports travel, but it is sports, it’s prestigious, it’s valuable to the community. We helped with behind-the-scenes public relations, particularly in the early days of the announcement. We are there to assist in any way. We did the same thing in the early days with Louisville City Football. While pro sports are not necessarily right in our wheelhouse, we are there to help, and have helped.

MG: Does LSC have any involvement in or relationship with the Kentucky Derby or horseracing?

KS: The team at Churchill Downs is the best in the world at putting on big world-class horseracing events. We fill in the cracks where we can for them but don’t do a lot. They do more for us in selling the community. If an event operator is worried about moving a lot of people around, the level of service that can be provided or getting enough volunteers, we point toward the Kentucky Derby and the Breeder’s Cup and say, “This is the level of execution we can, and have, consistently done in our community.” That has helped us convince a lot of clients to come to Louisville.

MG: You mentioned the Norton Track and Field facility. Tell us a little bit more about its significance.

KS: From an inbound sports-travel standpoint, it can move the needle a little, because there’s an underserved market for championship-caliber indoor track facilities. This facility, in Louisville’s West End, will be a state-of-the-art, 200-meter hydraulic banked track. The track is banked because of those really tight turns at 200 meters so the runners can run faster than on a flat surface. Being hydraulic, it can be laid flat in about three minutes so now they can do sprint races. Indoor track season runs from mid-December to mid-March. In the off-season, you could host concerts there, wrestling, gymnastics, volleyball. AEG Worldwide, one of the largest entertainment event facility operators in the world – which operates KFC Yum! Center – has signed on. They are operating the Lynn Family Soccer Stadium and will operate the Norton Sports Health Indoor Track Facility.

MG: What is its target completion date?

KS: That facility will be completed before the end of this year. They’re still raising dollars but do have the money to build. It’s going to bring us new types of events we haven’t had before. From the standpoint of helping a neighborhood, it will improve so many different facets. One will be people coming into the neighborhood to that facility and spending their dollars there. Another is the impact of the high achievers coming into a neighborhood. A third impact is the economics of this facility being one of several new anchors in the West End of Louisville to help lift up the neighborhood.

MG: How did you come into this field? What was your background?

KS: My dad was the first executive director of the Catholic School Athletic Association, which is the Archdiocese of Louisville’s formal sports program. I was around football games being organized and track meets, basketball leagues, volleyball leagues and softball leagues. I was one of 10 kids, and we were all expected to help out with these events. From there, I got a degree in journalism and got a little bit of a public relations background. I played college sports. I was a high school and college basketball official, and I was a sports information director in college. I was a PR person, not only in college, but also at Churchill Downs for almost 20 years. That entire array of things came together to put me in the spot where I could add value to the Louisville Sports Commission’s efforts.

MG: Do you have a closing statement?

KS: A lot of my sports commission contemporaries around the country talk about what else we can do besides the economic piece to add to quality of life in our community. In addition to the economics of the inbound travel and room nights, we hit on two areas: talent attraction and retention, and health and wellness.

The health and wellness data is clear: If you exercise on a regular basis, you’re healthier, happier, more productive, you live longer. So we’ve created an entire initiative called Louisville Active to help get people moving in our community. That’s our health and wellness piece.

As for talent attraction, we’re around a lot of young people who are very high achievers. And as the commercials point out, less than 1% of student athletes go on to careers in sports. We work at connecting our business community with those young people who are coming to our town. The LiveInLou Cross Country Classic is one example of our working with our chamber, Greater Louisville Inc., and their talent attraction initiative. GLI did a great job this year of activating our cross-country classic and got in front of 2,700 kids who are all going to be looking for jobs.

Mark Green is executive editor of The Lane Report. He can be reached at [email protected].