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Sports Complex: Debt Again: Outgames, $5 million deficit; Gay Games, $35,000 Remaining on Matching Grant Campaign
by Jim Provenzano
2006-11-22

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Outgames CEO Louise Roy (left) and Mark Tewksbury. Photo by Montreal 2006

__________

They claimed they would outdo the Gay Games in many ways. They said they would, according to their slogan, 'play for real.'

Montreal's Outgames did outdo the Gay Games in at least one way: by ending with the highest deficit for a multi-sport LGBT event in history.

On Nov. 13, several Canadian media outlets released the news—the French-language Journal de Montreal broke the story—that the 1st World Outgames finished with a $5.7 million deficit ( $4.3 million USD ) .

While representatives had claimed that the event, with an overall budget of $14 million ( CAN ) , closed with a surplus, a government audit in September revealed quite a different outcome.

Only weeks after Outgames' conclusion, co-president Mark Tewksbury claimed that 'Montreal will enjoy significant social and economic benefits, both in the short and medium term.'

The fact that this enormous deficit even made headlines is surprising, considering that Outgames representatives apparently tried to cover up the news.

Montreal municipal affairs minister Nathalie Normandeau told CBC News that the $5.7 million deficit was revealed by a Quebec government audit, despite the fact that the provincial government gave Outgames more than $3 million in loans.

Outgames co-president Marielle Dupere criticized Normandeau for talking to the press about the financial loss. 'We had an agreement with [ the government of ] Quebec that we were not supposed to talk with the media,' she told the Toronto Star.

According to the Journal de Montreal, only weeks before the event's opening, Outgames organizers told the government that the games' financial problems were temporary. The Quebec government provided an emergency loan of $1.4 million ( CAN ) , which, by some accounts, saved Outgames from being cancelled. Within days of the event's closing, CEO Louise Roy claimed a $200,000 surplus.

Shortly after news of the deficit made Canadian headlines, Outgames' Web site, www.Montreal2006.org, abruptly shut down. Requests for comments from Outgames representatives were not returned. However, Dupere told Canadian media, 'There are no regrets about the games. Montreal needs this kind of international event to position itself in the market.'

The 1st World Outgames were underwritten by the government of Canada, the government of Quebec, the city of Montreal, Radio-Canada and Tourisme Montreal. These organizations backed the event with millions in loans, services and cash. Whether any of those loans will be repaid seems doubtful.

The news of the Outgames deficit came as no surprise to some sports organizers. Gene Dermody, a Gay Games organizer since its inception and a Federation of Gay Games ( FGG ) board member who participated in several Games bid contract negotiations—including ones with Montreal—said he feels vindicated, since he never voted to award the games license to the Montreal organizing committee in either of its bids. ( The city had also bid to host the sixth Gay Games. )

'What has always been missing from the discussions of the past few years, vis-a-vis the 'split,' has been the unwillingness of much of the GLBT media to investigate the Outgames and their organization,' said Dermody.

Montreal was initially given the bid to host the seventh Gay Games, but the contract disputes of November 2003 led to one of the most contentious controversies in GLBT athletics.

The FGG warned the Montreal organizing committee about its large-scale vision of 24,000 participants. Following problems with Sydney's 2002 Gay Games ( $1 million debt, followed by bankruptcy ) , the FGG asked Montreal to scale down its projects. Montreal refused through 13 contract revisions, and appropriated the concept of the Gay Games, creating a rival event. The FGG chose Chicago Games, Inc. ( CGI ) to host the seventh Games, which were held July 15-22, a week before Outgames.

Even as this financial deficit seemed imminent, Outgames representatives like former publicist Jean Yves Duthel were spreading rumors about Chicago's financial woes by saying of the Gay Games, 'I wish them luck, but they have no money.'

The news of the Outgames deficit should not be surprising for those who followed organizers' claims. Roy said in 2003 that the break-even point was 16,000 participants. Outgames had about 10,500 sports participants, and 1,200 more at a human-rights conference that preceded the games.

In May 2006, at a Montreal press conference, Roy declared, 'We have obtained financial viability.' Two months later, according to the Journal of Montreal, she was privately begging the Quebec government for more than $1 million to keep Outgames afloat.

Roger Brigham, director of Wrestlers Without Borders, spoke as an individual and not as a former communications director for the FGG. He said that blaming low participation at Outgames is misleading. 'They fell short of that mark by roughly 3,000 athletes, if indeed all the people showed up that they said showed up,' he said. 'If the average registrant paid $150, that would be a failed revenue of $450,000, or a little more than a tenth of their actual losses.'

Even with more than $8 million ( CAN ) in government funds, the event did not make money. A last-minute effort to fill the stadium at opening ceremonies, and attempts to blend Montreal's annual Diverse/Cite pride events, led to disgruntled vendors claiming lower attendance at pride events than in previous years.

Yet, Outgames organizers continued to act as if nothing went wrong. At the conclusion of the games, Roy stated, 'Thanks to this financial and logistical support, the 1st World Outgames have and will continue to have a significant social and economic impact for Montreal, Quebec, and all of Canada.'

That impact may not be the one Roy intended, but more like the $4.77 million deficit after last summer's FINA World Aquatics Championships, and like the 1976 Olympics, which left the city of Montreal and Quebec Province in debt for decades to upwards of $1 billion.

Brigham said that Outgames' problems are rooted in the contract disputes of 2003: 'This sad turn of events underscores the importance of an independent but mutually cooperative relationship between a host organization and a licensing organization. Montreal badly underestimated the value of the FGG brand, which Roy called an overpriced 'American trademark.''

How will this affect the future of the LGBT sports movement? Will the second Outgames, scheduled for 2009 in Copenhagen, Denmark, even take place? Representatives from that organizing committee did not respond to several requests for comments.

'What this portends for the future is hopefully a radical reorganization of the FGG to continue the legacy of the Gay Games based upon the miracle of what Chicago did in two years,' said Dermody.

While Outgames' Dupere told Canadian media that Outgames was delivered as planned and on budget, she blamed the Chicago Games for 'spoiling things.' Representatives from Chicago were measured in their comments.

'We're saddened to learn of serious financial losses experienced by the Outgames in Montreal,' said Kevin Boyer, board co-vice chair of CGI. 'While the competition between the Outgames and the Gay Games was often spirited, we genuinely wish the LGBT community of Montreal the very best.'

Chicago's Gay Games saw a $200,000 deficit, which has already been reduced, Boyer said, to a mere $35,000, after an inventory liquidation sale and a $100,000 matching grant from philanthropists Dick Uyvari and Joe La Pat. Boyer cited the heat wave that swept Chicago during the games as the main reason for additional expenses.

With the Outgames Web site shut down, it is unclear whether paid sales of their commemorative book and other merchandise will be honored.

As for the Chicago Games' finances, increased holiday sales of the commemorative DVD may cover CGI's deficit before their April 2007 deadline for final reports.

'We're proud that the business model developed by Chicago Games, Inc., in cooperation with the Federation of Gay Games, will be a success and that we will break the cycle of financial losses experienced by previous hosts,' said Boyer. 'Our partners, sponsors, and volunteers—especially the City of Chicago—are the reason for this great accomplishment.'

Jim Provenzano is the author of the novels PINS and Monkey Suits. Read more sports articles at www.sportscomplex.org; e-mail sportscomplex@qsyndicate.com .


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