Organizers of the Alltech FEI World Equestrian Games have cut as much as $500,000 from their budget, Games CEO Jamie Link confirmed Wednesday.
The cuts come as WEG organizers contend with lower-than-expected ticket sales and the bills related to erecting 300 temporary buildings at the Kentucky Horse Park.
But any financial gaps will be helped by nearly $1 million raised in the past 21/2 weeks by the title sponsor, Alltech, selling high-profile memberships to the Alltech Commonwealth Club. Businesses spend at least $10,000 for the club and receive credit for tickets and other amenities.
Pearse Lyons, the president of Alltech, the Nicholasville-based feed supplement company, said it became clear in the last week or two that the Games needed more help. He also is jumping in with $2.5 million worth of staffing, or about 50 Alltech employees who will move to the Horse Park to help with finances, public relations and operations.
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"The resources are required; we have the resources here," he said. "All I said was let's pull these two teams together."
Lyons said the short-term financial strain is "the nature of this kind of event" because the bills come in before most of the revenue from the Games.
First lady Jane Beshear, who sits on the organizing committee, the World Games 2010 Foundation, said organizers still expect the event to break even. The Games are Sept. 25 through Oct. 10.
As for the budget cuts, Link said the board has trimmed planned visual elements for the Games, such as flowers and other decorations, from the $76 million WEG budget.
"We're talking about the must-haves versus the nice-to-haves," Link said. "We're not going to overspend just to make it look better. The integrity of the event will not be compromised."
Link also said the budget had been planned around the large bills of the build-out. He said WEG officials had structured the payment of large bills over time so that when more revenue comes in after the event starts, the foundation can finish paying them.
"We're right on budget ... this thing is going right according to plan," he said.
Alltech will furnish some of the visual elements cut from the budget as well, providing the 30-foot tall tower that will welcome visitors at the main entrance, along with graphic elements to decorate temporary grandstands, said Kelly Welker, director of Alltech's Games activation. Both of those had been cut, she said.
Alltech's $32 million
Finances have been a long-standing problem for Games organizers, mostly because the global economic crisis has hurt its two main revenue streams: ticket sales and sponsorships. Although organizers have remained tight-lipped about the money situation, the roughly $76 million budget was partly based on the sale of an estimated 500,000 tickets. So far, 325,000 have been sold, Link said.
Lyons has estimated that, not counting the use of his staff, he's spent $32 million on the Games, including his initial $10 million title sponsorship.
Alltech has been operating its own Games offices for months, rustling up sponsorships, even starting a toll-free help line to answer questions.
Alltech and WEG staffers held an organizational meeting Friday. Now Alltech employees will be augmenting the small staffs of finance, physical operations, hospitality and even information technology to work together before the Games start Sept. 25. Lyons said his staff of accountants already has been able to bring in more money from sponsors by restructuring some sponsorships.
"Now, there's money in the bank," he said.
Kentucky Finance and Administration Secretary Jonathan Miller, a member of the WEG foundation's board, said Lyons has been a "godsend."
"His generosity has been unprecedented," Miller said.
John Long, the CEO of the United States Equestrian Federation and chairman of the foundation board, welcomed the change.
"The WEG staff has done a wonderful job, but they're understaffed," he said. "It made sense to put the teams together and make them one."
Long said the size of the original staffs seemed right when they started several years ago. "But the enormity of the event continues to surprise all of us."
Lyons said that because he's so deeply involved in the Games, the convergence of the two groups made perfect sense.
"We have a lot of skin in the game," Lyons said. "This will be a real injection of enthusiasm."
Uptick in sales
Ticket sales, which have lagged below expectations in the past year, are picking up, Long said.
Foundation board member Alston Kerr said the board has been fiscally conservative. "You don't spend more than you think you're going to take in," she said. Kerr, who works with the hospitality committee, said she's seen an uptick in sales of high-price tickets in the past few days.
Board member Tandy Patrick said the group still needs to sell the projected number of tickets.
"We think we will. We think we're going to get there," Patrick said.