Kentucky state officials shake up NAILE leadership

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NAILE sheep judging

(Be sure to check out the Aug. 14 update on new leadership developments too.)

SALEM, Ohio — Steps by Kentucky state officials to change how the North American International Exposition is managed has caught some longtime employees and supporters by surprise, prompting a swift and vocal backlash against the moves.

Some say they fear the future of the NAILE could be in jeopardy without longtime leadership at the helm. Kentucky State Fair Board representatives, however, say the changes do not threaten the expo, and were necessary to address significant annual operating deficits.

Expo background

First held in 1974 as a beef-only show, the expo has since expanded to include seven species. Billed as the “world’s largest purebred livestock expo,” the North American International Exposition attracted 29,095 total entries in 2014. The North American Quarter Horse Show and the North American Championship Rodeo also accompany the expo.

More than 220,000 visitors and exhibitors attend annually, and the event accounts for an estimated $16.1 million in annual economic impact, according to the Kentucky State Fair Board.

Changes

The event is scheduled to be held this year, Nov. 3 through 20, at the Kentucky Exposition Center in Louisville, Kentucky. A former NAILE official, however, believes this year might be the beginning of the end, after a series of unexpected leadership changes in recent weeks.

On June 23, Kentucky Gov. Steve Beshear signed an order to reorganize the fair board that introduced sweeping changes, expanding fair board members from 15 to 21 and bringing in a mix of agricultural, state and business representatives.

The order also moves the expo general management role over to president and chief executive officer of the Kentucky State Fair Board. The order went into effect immediately, but must be ratified by the Kentucky General Assembly, which will go into session in January.

NAILE and other events run by the Kentucky State Fair Board have become major economic drivers, and the new board represents what has become a multi-million dollar business, said Amanda Storment, vice president of communications for the fair board.

She said the changes were imminent, considering the expo had been running significant annual operating losses.

“Since we’re a state agency, you can’t keep running in the red without taking some action,” she said.

Unexpected moves

The governor’s executive order was the first in a series of moves that came without warning, according to Claude Brock, who was NAILE director of media operations for 40 years.

Corinne Fetter, who had been the Kentucky Exposition Center’s director of expositions and general manager, resigned from her position not long after the order, Brock said in an interview Aug. 4. Attempts to reach Fetter were unsuccessful.

According to NAILE history online, Harold Workman served as the first general manager and was most recently vice chairman of the executive committee, but was not asked to continue in his role, he said in an interview Aug. 10. Jack Ragsdale, one of the founders, had been chairman, but was not asked to return either.

Cumulatively, Workman said, he, Ragsdale and Fetter accounted for 100 years of experience with the expo.

Brock was not asked to return to his post for the 2015 event either.

“Nobody knew what was going on,” Brock said. “It is all irregular. It is all swift.”

Out in the open

The moves may have remained quiet. That is, until a flurry of correspondence sent by Brock and supporters Gordon and Anne Patton Schubert, of Taylorsville, Kentucky, landed in mailboxes of livestock industry members and media in the beginning of August. (Anne Patton Schubert is listed as a member of the expo’s consultant committee.)

“Survival of the North American International Livestock Exposition may be in doubt, and it is likely that individuals who have recently been put in charge of the event are not qualified for the job,” the Schuberts write.

They urge livestock leaders to contact the fair board to express their concerns.

Joey Pendleton, a former Kentucky state senator, helped bring the dairy cattle competition to the expo 40 years ago. He is currently head of the dairy advisory committee and a member of the executive committee. In an interview with Farm and Dairy Aug. 4, he said he is concerned about the changes — namely how the sale money will be dispensed to the youth — but he doesn’t want the confusion to cloud the goal: a successful expo.

“I’m not going to sit around and let egos get in the way of us continuing to have a great North American,” Pendleton said.

Fair board report

The groundwork for change appears to have been laid a couple of years ago.

A 2014-2016 Kentucky State Fair Board business plan and budget was produced not long after Clifford “Rip” Rippetoe began as fair board president in 2013. In it, NAILE is highlighted as one of eight areas losing money — with a $1.1 million annual deficit. A review of NAILE budget statements since 2008 shows more than $500,000 in net losses each year.

But that’s only part of the picture.

“To fulfill the Fair Board’s mission of advancing Kentucky’s economy, it is not uncommon to host events which translate into little or no revenue to the Fair Board while bringing millions into the state’s coffers,” the report reads.

Big losses

Despite that disclaimer, the fair board’s revenues have declined dramatically in recent years, adding up to a $16 million loss total for 2015 and 2016.

The report cites a variety of losses. The board lost lease income after University of Louisville’s men’s and women’s basketball teams moved from the Expo Center to the KFC Yum! Center in 2010. Another rental lease, for the Kentucky Kingdom amusement park property, was dropped after the park filed for bankruptcy. (In the past year, the park has been resurrected and the lease renewed.) The Kentucky State Fair, which runs Aug. 20 through 30 this year, also saw a 2011-2013 decline in revenue of $900,000.

In addition, the report cites rising administrative costs, including health care and pensions.

Competition for exposition space has increased in the region as well. At the same time, overall occupation rates have declined, according to the report.

The mission still holds true, Storment said, but the mounting losses, especially following the Great Recession, required action with the NAILE.

“When we got a real handle on the finances on the North American, we knew we could not maintain those kind of losses,” Storment said. “It was an effort to right the ship.”

Workman disagrees.

The losses increased after state earmarked funds were discontinued about 10 years ago, he said. At an executive committee meeting in the fall of 2013 — after Rippetoe joined the fair board — Workman said he proposed bringing someone in to focus on selling sponsorships. The 2014-2016 fair board business plan proposes selling sponsorship to increase revenue for the NAILE as well.

To date, no substantial steps have been taken to follow up on his proposal, Workman said.

“The bottom line is there’s still a deficit, and there doesn’t have to be,” he said.

Meeting planned

Pendleton was on hand for the meeting between the Kentucky State Fair Board and the NAILE executive committee, which was held after press time on Aug. 11. He said last week he hoped to see resolution to the controversy.

“You’ve got to be adults and sit down and talk through it,” he said.

The NAILE posted an Aug. 5 open letter to the livestock industry, signed by Rippetoe, on its website and on its Facebook page.

“I want to assure you that the Kentucky State Fair Board fully supports NAILE and is committed to insuring continuity for the world’s large purebred livestock exposition,” the letter states.

Storment said Rippetoe has met with livestock representatives in recent days to assuage fear about the future of the expo.

“The people he’s met with so far have been favorable,” she said.

Brock isn’t convinced.

“We may very well be looking at the last year of the largest livestock exposition on earth,” he said.

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