The world came, competed, and left behind a sizable debt.
The World Games 2022, held in Birmingham last month, cost $65.1 million to produce—$10 million less than initially projected. However, the 11-day event fell short of its revenue goals, generating about $51 million through sponsorships and ticket sales, leaving a $14.1 million shortfall, according to CEO Nick Sellers.
“I couldn’t be more proud of our team at The World Games 2022 Birmingham Organizing Committee,” Sellers said. “However, for many reasons, our revenues left us with a deficit. We are working with our public and private partners to close the gap as quickly as possible and satisfy all of our debts.
“We have every intention to raise the associated funds and pay our vendors.”
On Monday, Birmingham Mayor Randall Woodfin delivered a letter to City Council members asking them to approve a “final funding request” for $5 million.
“I respectfully request this matter be presented to the full council for consideration on Tuesday, August 23,” the mayor wrote. “If you agree, then I will request the leadership of the Birmingham Organizing Committee (BOC) to be present for this meeting.”
Council President Wardine Alexander: “The World Games was a success for the city and region. We were able to showcase Birmingham and surrounding cities to over 100 countries around the world and welcome thousands of people to Birmingham. The Council is continuing to work with the mayor to review and address the request that is before us; particularly as it relates to the needs of our local vendors.”
Sellers said the BOC “guaranteed Mayor Woodfin and the city council that any additional funds it contributes will go directly towards ensuring the Birmingham-area vendors are paid as a part of our plan to satisfy all outstanding invoices.”
Sellers said the BOC made the same commitment to the Jefferson Commission, “as well as satisfying our remaining invoices to our international partners. This is critical for ongoing economic development efforts.”
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Regarding further funding from the County Commission, President Jimmie Stephens said, “The commission has already given substantial funds to the World Games. The debt will be handled at a future date.”
Separate from the BOC’s calculations, Stephens says the commission is addressing $1.3 million in overtime costs from the Jefferson County Sheriff’s Department “related to the World Games”.
Other prior funders included The Birmingham Convention & Visitors Bureau. “We’re willing to step up, within reason,” said John Oros, CVB president. “That’s a board decision, and I’m sure they’ll take into consideration what I recommend.”
Oros wouldn’t reveal the amount he’ll put forth, but said the CVB has accrued more than $1 million in expenses related to the games, including $350,000 for advertising, some of it spent on radio ads during Atlanta Braves broadcasts “to enlighten people about the games and that they were coming.”
“From a sports tourism branding perspective, the World Games was very, very important,” he added. “It established us as a legitimate future destination for potential championship events for many international federations that had governing bodies in attendance. That’s the bigger picture—the true impact of what are we going to be able to book because of the number of international federations that saw our facilities.”
Various corporations also contributed almost $27 million to fund the games.
Numerous factors contributed to the deficit, Sellers said—most stemming from economic assumptions made when officials from the public and private sectors first bid for the games in 2015. Chief among them: Predictions about the number of visitors the event would draw to the region, particularly international visitors.
The newest COVID-19 surge likely contributed to the dearth of international travelers who came to Birmingham from Europe or, most significantly, China. Chengdu hosts the 2025 Games and an expected sizable contingent from its organizing group did not materialize, Sellers said.
That led to lower-than-expected ticket sales (about 60,000 individual tickets, plus those included in sponsorships) and weaker-than-hoped-for occupancy for hotels located beyond downtown and nearby areas. Additionally, the Games were originally scheduled for July 2021, but were rescheduled to the following year due to the global pandemic. The delay added several million to carrying costs to the budget.
Also, Sellers said, two sponsors—representing $2.5 million in pledge support—opted out about a month before the start of the games.
In short, the deficit was not wholly surprising.
“This was a massive undertaking,” Sellers said. “We’ve communicated an expected budget deficit to our public and private partners since the pandemic. The challenging economy and recent spike in COVID made the deficit worse than expected. But we are confident our partners will stand with us and support this final investment to help us balance the budget and honor our commitments to our vendors – most of whom are local.”
In an email to Woodfin and Sellers last week, and obtained by AL.com, Greg Barker, president of the Economic Development Partnership of Alabama, noted meeting the Consul generals and/or ambassadors from 18 countries, seven “nationally-recognized” site selection consultants, and 14 executives from eight global corporations.
“All of these activities are sure to yield positive economic development results and they would not have been possible without the World Games,” he wrote.
Said Alexander: “The City will continue to see a return on our investment for decades to come as we work to position Birmingham as a destination for large-scale events and entertainment, while taking into consideration the lessons we’ve learned from hosting the World Games.
“We hope that all our partners that helped to make the World Games possible will join us to ensure that all of the responsibilities are met.”
World Games $14 million shortfall; ‘We have every intention…to pay our vendors,’ says CEO & Latest News Update
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