Issue:  Vol. 48 / No. 8 / 22 February 2018

2006 Gay Games breaks even

Chicago has become the first host of a Gay Games in 20 years not to be a financial bust.

After a triple-digit heat wave in Chicago the week of Gay Games VII last July raised expenses, curtailed turnout, and cut projected revenues, host Chicago Games Inc. had appeared headed for a triple-digit budget deficit. But CGI reported this week that a cohesive transition team and the stepped-up support of donors such as former U.S. Ambassador James Hormel of San Francisco and his partner, Tim Wu enabled Chicago to finish in the black.

After Gay Games I in 1982 and Gay Games II in 1986 each turned modest profits in San Francisco, the next four Gay Games saw major financial shortfalls. And Chicago, which had only two years to plan the Games after being selected following the withdrawal of Montreal in a dispute with the Federation of Gay Games, was the first one to face a competing LGBT international multisport event: the Montreal Outgames.

Those Outgames, which organizers initially reported would turn a profit, wound up losing more than $4 million.

“The final total cash budget was just a bit over $9 million,” Kevin Boyer, co-vice chair of CGI, told the Bay Area Reporter. “There was an additional $13.2 million in barter and in-kind sponsorships which included, among other categories, media and marketing ($7.2 million), legal service, cash handling, technology consulting, and waived facility rentals.”

Boyer said the state of Illinois provided a $125,000 tourism grant, 1.4 percent of the total cash budget.

“The FGG applauds CGI’s efforts to change the unfortunate paradigm with recent Gay Games to reach this stunning financial result,” San Francisco’s Doug Litwin, FGG officer of communications and marketing, told the B.A.R. “Their efforts since the close of the event have been remarkable. The federation is happy to have played a significant role. Looking ahead, we’re confident our new partners at Games Cologne will be encouraged by this positive news and learn as much as possible from Chicago’s experiences so the 2010 Gay Games have an equally solid financial outcome.

“What CGI has been able to achieve is all the more remarkable since they faced a challenge no other Gay Games has faced: a direct competitor,” said Litwin. “The financial debacle at the event in Montreal validates the FGG’s decision to support CGI and remain true to the founding principles of the Gay Games.”

“In the end, we needed to fill a budget gap of about 3 percent of the total cash budget, or about $300,000,” Boyer said. “We accomplished this with additional fundraising from donors and sponsors, especially longtime Gay Games competitors and supporters Dick Uyvari and Joe LaPat, as well as negotiated reductions in expenses with some of our vendors. We also continued to aggressively pursue post-Gay Games revenue from DVD, photo, and merchandise sales as well as the sale of hard assets such as furniture, technology, and equipment.

“The final step was assessing the exact total of any remaining liabilities so that we assess exactly how much would be required to make those payments. This included having our accountants place advertising noting that we were closing operations and that any parties that believed we owed them money needed to contact us. This process was accomplished just last week and final payments were made,” Boyer added.

“We are extremely grateful to our many donors, sponsors, volunteers, partners and vendors whose commitment and contributions made today’s announcement possible,” said Tracy Baim, leader of the shutdown follow-up. “Each deserves the appreciation of our city and the worldwide LGBT sports community.”

CGI officials said the work following the Games, when host organizations are usually depleted after four years of volunteer effort, was as critical to the overall financial success as the planning leading up to the event.

“The last three Gay Games lost significant amounts of money,” Boyer told the B.A.R. “We are told that New York in 1994 worked to reduce their overall debt and got it down to (a few hundred thousand dollars) before ceasing operations. However, the deficit totals for both Sydney and Amsterdam were so large that they immediately went into receivership. As such, there was no previous Gay Games to which we could look for an assessment of exactly how the wind-down process would unfold to the very end.

“Fortunately, with significant business expertise on our board of directors and under advice from our attorneys at Sidley Austin, we were able to accomplish the task. We will include this post-Gay Games experience in our reports for Cologne so that their administration understands that work goes on for almost a year following the closing ceremony.”

Tourism industry officials estimate the 2006 Gay Games poured from $50 million to $80 million into the local economy.

“We promised our community in Chicago that our Gay Games fundraising campaign would not undercut other important community projects, including the LGBT Center on Halsted,” said Suzanne Arnold, CGI co-chair. “Three-and-one-half-years later, our beautiful new community center is open and Chicago’s LGBT community is stronger than ever. Our local LGBT sports organizations are the strongest they’ve ever been, offering more sports to more people than ever before.”

“In 2003, when we launched the bid to host the 2006 Gay Games, we promised our local LGBT community, the city of Chicago, and the worldwide LGBT sports movement that the 2006 Gay Games would break even financially,” said Sam Coady, CGI co-chair. “We also made the commitment to leave a lasting and positive legacy for future Gay Games hosts – a sound business model upon which future Gay Games could be built. We are proud today to have fulfilled those promises.”

Cologne Games also announced this week it has launched pre-registration for Gay Games VIII, July 31-August 7, 2010.

— Roger Brigham, July 11, 2007 @ 11:11 am PST
Filed under: News,Sports

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