Letter to Supporters

Montréal, 24 October 2003

Dear Athletes, Friends, and Montréal 2006 Supporters,

First, we would like to thank you for the outpouring of support we have received from all over the world over the past couple of days. Your encouragements are very much appreciated, and we re-state our commitment to you to deliver the best sports program and Games the GLBT global community has ever seen in 2006.

We apologize for sending you another document, but please remember as this negotiation becomes more public that there is always more than one way to look at a situation. Sometimes information that is given publicly does not always represent the spirit of private correspondence and negotiations behind closed doors.

In the spirit of transparency, Montréal 2006 would like to offer a few points of clarification to the correspondence you received from the Federation of Gay Games (FGG).

Public Communication of the Negotiation Process

It was with great disappointment that Montréal 2006 learned that Mr. Charlie Carson, FGG Secretary, chose to speak publicly to a media outlet regarding the current state of negotiations. It was this interview to Outsports that sparked mainstream media requests in our market in Montréal, which then led to the necessity of releasing a formal organizational response from Montréal 2006 in the form of a press release on 16 October 2003. It was mutually agreed that neither party would speak to a media representative until after negotiations had reached a conclusion. Unfortunately Mr. Carson chose to ignore this agreement.

The Federation's Mission of Assisting Hosts of Gay Games

Montréal 2006 appreciates the role the FGG states it plays in assisting host cities to deliver successful Games. Unfortunately to date, two years into the delivery of Gay Games VII, Montréal 2006 has not received a single piece of such information to assist us in the preparation of our event in 2006.

Recognizing the importance of past Games experiences, and for prudent, realistic planning for our event, Montréal 2006, at its own expense, brought the former Sports Director of Sydney 2002 to Montréal for six weeks. Montréal 2006 takes lessons from the past very seriously, and has done everything in its power to ensure that past mistakes are not repeated. While in Montréal, the Sydney 2002 Sports Director worked with the Montréal 2006 team to create a detailed analysis of our plans, including forecasted income generation and participation numbers that for the first time would create Games delivered on budget. Financial prudence has always been a priority for Montréal 2006 and will continue to be so.

Size and Scope

The Federation has requested that Montréal 2006 adopt a more prudent approach with a conservatively sized initial plan that has a built in flexibility to grow when money is secured. Montréal 2006 has always agreed with this idea in principle. As the organizing committee we have to face the challenge of putting this principle into action while also honouring the natural growth within the GLBT global sport movement.

Did you know that we have compromised significantly on the numbers of participants, reducing our projections from 24,000 to 16,000 participants? Did you also know that there is a bottom line cost per athlete to compete in the Games? And that is the job of the host organization to finance the participant's costs? The delivery of financially viable Games does not translate into reducing the size or the scope. Many of our costs are fixed, so the cost of delivering the event does not go down proportionately if you reduce the number of participants. In fact, in our analysis, we have discovered that Games of 10,000 or even 12,000 athletes is a money-losing proposition. What the FGG is proposing in using those numbers as a starting point is to repeat the failures of the past. The numbers of participants that is the "break even" starting point for Montréal is 15,540 athletes with a budget of $16 million CA.

The Federation has also stated that the plan proposed by Montréal 2006 is based on a budget forecasting an income that is roughly double the forecast income of the Sydney Games. This is false since we have revised our budget from $20 to $16 million CA. What they are also neglecting to add is that 35% of that budget (over $5 million CA) is already secured, with participant registrations and ticket sales, making up another 51% of our revenue. The other 14% comes from the sale of merchandising products, fund-raising activities and sponsorships. Our budget contains a contingency reserve of 10%. As responsible administrators, in the unlikely event that we do not meet our objectives, we have planned cost-cutting scenarios to compensate for any shortfall.

While comparisons to the past are fair, so is looking at the facts of the present. Montréal is the first city to host the Games in North America in 12 years. Montréal is the first host city to enjoy unparalleled support from all levels of government. Montréal is the first host city, three years before the Games, to have a full-time professional staff devoted to its successful delivery. Some of their success already includes the announcement that Montréal will be the first city to have a national television contract.

The Issue of Micromanagement

If you were on a Board of Directors which was held legally accountable for the decisions of a corporation, would it be reasonable that you be expected to give final authority to an outside body to make those financial decisions on your behalf? If the FGG truly wanted only reasonable rights of supervision of our plans we might not find ourselves in an impasse with the negotiations. What the FGG has requested is final approval rights. This after Montréal 2006 has agreed to pay close to a million dollars CA ($655,000 US) in licensing fees for the right to deliver their event.

Your Interests

The Federation, as the official body that represents only 21 of the thousand GLBT sport teams we have found around the world, has pledged that your best interests will drive their negotiations. We offer the same pledge. From day one, the goal of Montréal 2006 is to deliver Games that are inclusive and have the possibility to accommodate the largest number of participants while remaining financially viable. Our vision has not changed.

Lucie Duguay Co-President

Mark Tewksbury Co-President