The $5 million allocated to The World Games 2022 in Gov. Kay Ivey’s record $8.8 billion Education Trust Fund will allow organizers to finally close the books on the $14.1 million debt incurred from the 10-day event, CEO Nick Sellers said in a statement to AL.com.
“The World Games 2022 was utilized by our state’s economic development leaders to recruit business prospects from around the world,” he said. “Despite the challenges of the pandemic, which led to the budget deficit, it was a successful event for Alabama and provided many learnings for future international events.
“This funding request will allow the Birmingham Organizing Committee to satisfy the remaining financial obligations and successfully close out The World Games 2022.”
The dept was initially revealed last summer, not long after the completion of the event. Delayed by a year due to the pandemic, the Games cost $65.1 million to produce--$10 million less than originally projected, according to Sellers—and fell far short of revenue goals. The event generated about $51 million through sponsorships and ticket sales, leaving a $14.1 million shortfall, Sellers said at the time.
“We have every intention to raise the associated funds and pay our vendors,” he said at the time.
Sellers attributed the shortfall to worst-than-predicted ticket sales and sponsors backing out of commitments.
In May, just prior to the event, $2.5 million in expected sponsorships was lost, he said.
Ticket sales also fell short of the 200,000 expected. “We had to recalibrate from $7 million down to $4 million in ticket revenues,” he said. “That was a $6 million hit. We expected $57 million (in revenue),” he said. “We ended at $51 million.”
At the time it was reported the World Games had outstanding invoices totaling $15,656,173 owed to more than 100 companies or individuals. (Cash on hand accounted for final calculation of the $14.1 million debt.)
Soon thereafter, the Birmingham City Council approved the allocation of $5 million toward the debt—although Councilor Valarie Abbott was pointedly critical of the council not being informed of the debt until then.
“What did you know and when did you know it?” she asked Sellers. “We were left in the darkest of dark … I deeply resent being left in the dark. We deserve some respect,” Abbott said. “We didn’t get any.”
“I want to apologize,” Sellers said. “I should have communicated more effectively, more directly to you.”
Birmingham Mayor Randall Woodfin, prior to the vote, said having to spend the additional $5 million “sucks,” but supported the action.
In September, the Jefferson County Commission approved providing up to $4 million more to help address the $14 million debt. The county previously contributed $5 million to support the event.
That debt remains. “The World Games obligations to the BJCC, Sheraton Birmingham, and Westin Birmingham hotels have not been satisfied,” said BJCC CEO Tad Snider. “The balance remains at [around] $1.2 million combined.
“We continue to remain engaged with The World Games and remain optimistic that plans underway to satisfy these balances, as well as other obligations of The World Games, will be successful.”
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