BIRMINGHAM, Ala. (WIAT) — The Birmingham City Council will give the organizing committee of the World Games $5 million to help pay off shortfall from the weeklong event.
Following a lengthy discussion during their regular meeting, the council voted 7-2 to allocate the money from the city’s fund balance reserve.
Earlier this month, World Games CEO Nick Sellers reported that at the conclusion of the games, there was a $14 million deficit reported from the games. Among other reasons, Sellers pointed to a couple of vendors who pulled out at the last minute and less of a turnout due to a spike in COVID-19 cases during the games.
Originally budgeted at $75 million, the committee was ultimately able to hold the World Games in the city for $65 million. However, their revenue fell short $14 million.
Before the council voted on the matter, Sellers added that the group learned a lot through their work with the World Games that will be beneficial when the city hosts other large-scale events, such as the World Police and Fire Games in 2025.
“There was no playbook for doing this out of a global pandemic, but now we have one and it will make us better,” Sellers said.
Sellers added that when it comes to revenue, the 1984 Olympic Games in Los Angeles was the only Olympic Games to actually make a profit.
District 3 Councilor Valerie Abbott said that while she enjoyed the World Games and thought everyone had done a good job putting it together, she felt disrespected that the council was left in the dark about the shortfall.
“I guess my biggest concern is the fact that the city council, unless people knew something I didn’t know, were not informed of any problems until it was over,” Abbott said. “We didn’t receive any information and the thing that came to my mind is what did you know and when did you know it.”
Sellers responded that while the committee was confident it could get its operational costs underbudget, they did not foresee how few people both regionally and internationally would not be attending the games.
As Councilor Hunter Williams began to ask about what the group’s path forward would be if the council did not give them the $5 million, the council called a nearly one-hour executive session to discussion “pending litigation” before returning to discuss the matter further.
Some council members expressed their fears on what would happen if the group could not close the deficit and were forced to file for bankruptcy. Williams brought up how hard it was for the city to apply for grants and bonds following Jefferson County’s 2011 bankruptcy, which was the largest municipal bankruptcy in U.S. history at the time.
“That bankruptcy has cost this region not only economic development, but the community in exponential ways,” Williams said.
Prior to the council’s decision, Council President Wardine Alexander said it was important to consider every relationship as either being successful or an opportunity to learn.
“I want us to think hard on this opportunity to live and learn and make this truly an opportunity for a learning lesson as other events like this come before us,” Alexander said.
Councilor Clinton Woods was initially ready to bring a motion for the council to wait a week before making a decision. Ultimately, he chose not to do that, instead allowing for the city’s legal department rewrite parameters of the offer to stipulate additional commitments by the group to the council if they offered the money.
Following an hour-long recess to amend the wording of the motion, the council passed it 7-2. Williams and Woods were the two dissenting votes against the motion.
Mayor Randall Woodfin released the following statement after the council’s vote:
“The World Games 2022 was a success on many levels. We expect a strong economic impact when numbers are finalized. There are multiple economic development leads based on The World Games. You can’t put a dollar amount on the boost to civic pride and positive coverage of Birmingham worldwide due to the games.
“Let me stress, Birmingham benefitted greatly from this event. Taking the next steps to leverage the data and expertise from the Birmingham Organizing Committee while ensuring the Games and vendors close out on a positive note is critical to maintaining the momentum we have experienced in Birmingham.
“This event changed the funding model for The World Games. Previous events relied almost entirely on government funding. The 2022 World Games relied heavily on private funding. Funding by sponsors at the Birmingham games outpaced all other host cities combined.
“As a region, I urge our partners to join us.
“How we address the current challenges will determine how Birmingham performs on the regional, national and international stage for years to come.”