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Shrapnel
Dec. 23, 2009, 12:11 AM
From www.eventingetc.com:


WEG Loss at $1.9 million in 2008
CEO of Foundation in Charge of Games Calls it Part of "Normal
Financial Evolution"

By Linda B. Blackford

This Article (some paragraphs excluded) Appeared in The Lexington Herald Leader
on Friday, November 27th, 2009


The non-profit foundation that is putting on the 2010 Alltech FEI World Equestrian Games showed a financial loss of nearly $2 million in 2008, a deficit that organizers say is normal for an event such as WEG.

The group's 990 form, which is required by the IRS for most non-profit organizations, shows that in 2008, the World Games 2010 Foundation ended its fiscal year with $9.6 million in assets and $11.5 million in liabilities, for a loss of $1.9 million. The previous year, the loss was closer to $1.5 million.

"This is normal financial evolution of an event of this magnatude," wrote Jamie Link, who became CEO of the organization in January, in an e-mail message. "As the foundation's activities must increase in order to prepare for the Games, expenses will naturally increase. Conversely, the bulk of revenues, especially ticket revenues, are realized closer to the event."

Expenses have risen from $3.2 million in 2007 to $4.4 million. About $1.5 million of that was used to pay salaries, including nearly $250,000 to then CEO Jack Kelly.

The Games are being paid for with revenues from tickets, sponsorships, licensing fees and trade-show rental spaces.

Currently, Games officials won't discuss the budget, but, in previous months, they estimated that sponsorships would make up $30 million of the $76 million operations budget, and ticket sales would make up another $30 million.

Organizers hope to sell about 600,000 tickets for the event, which will take place Sept. 25 to Oct 10. Each person attending is likely to buy tickets to more than one event.

So far about 131,000 tickets have been sold.

Taxpayer money is not being used for the Games' operation, but the state has provided about $81 million to build an indoor arena and an outdoor stadium and provide extensive road upgrades at the Kentucly Horse Park.

The Games have also been hit hard by the global economic recession, and officials have said that sponsorships have taken longer and been harder to pin down.

The title sponsor, Nicholasville-based feed supplement company Alltech, has already paid $8.2 million of its $10 million pledge.

Organizers have kept the details of other sponsorships under wraps, citing confidentiality agreements.

However, the 990 form shows some financial infusions from other major sponsors, such as Rolex, which gave the Games $500,000 in 2008.

Other contributions include $350,000 from John Deere, $141,177 from Rood and Riddle Veterinary Hospital in Georgetown, and $80,000 from Blue Grass Airport.

The 990 also lists contractors who have received more than $100,000. Those include:

Leroy Neiman, the famed sporting artist, who is being paid $240,000 to create the official art for the Games.

Digiknow of Cleveland was paid $160,000 for Web site development and maintenance.

WJ Sports and Events of Raleigh, N.C., was paid $137,562 for event coordination.

Red 7e of Louisville was paid $110,969 for marketing.

Hilary
Dec. 23, 2009, 10:10 AM
I'm not sure they have 'lost' the money, if you were to look at their 5-year budget plan it may well be a situation they have been expecting - much of the revenue will come a lot closer to the games. Maybe not, but a 15% variance is not the end of the world.

findeight
Dec. 23, 2009, 10:27 AM
Not a surprise. Heard some rumors when I was down there in September. Not the least of which was vendor space was 10k for an off the main path location.

Not sure on that 600,000 ticket projection, always thought that a little ambitious for a fall event in a small city with competition from a major college sports program for the spectator dollar. It's not like the European venues where you can have 6 countries and 3 major cities within a day's drive. Promising revenue from future ticket sales in return for investment is always dicey.

I'm sure it will go off well and they will get a good turn out...just maybe not as rosey as touted.

Oh...and that new indoor is a multi use arena used for other sports-and that is a good thing for revenue generation.