28 November 2003

Dear Gay Games Participants, Supporters, and Friends:

  1. We want to thank those of you who have written us letters of support during the past several months, particularly in the last several weeks. Without minimizing the circumstances that led to the eventual end of the relationship between the Federation of Gay Games and Montréal 2006, the Federation is remarkably optimistic about the future of the Gay Games movement.


  2. We are proud that, once it became clear that the two organizations could not reach agreement on an acceptable contract, the Federation board moved forward at the 2003 annual meeting with committee work, including a process for selecting a new host for Gay Games VII. We know you want to know when and where the next Gay Games will be, and we talk about that later in this letter.


  3. To help you navigate through this letter, click on any of the following headings:

    4. Thank you for your continued patience and trust
    The Federation of Gay Games — Who we are
    Federation disappointment, and disappointment around the world
    A comment about Montréal 2006's messages
    The Federation's Negotiation Team
    Negotiation "Agendas"/"Strategies" — and Honor
    What does "consultation by the governing body" mean?
    Why did negotiations take two years? — A timeline
    M2006 financial status and spending strategy
    M2006 and Tourism Montréal (Tourisme Montréal)
    Comments About Montréal 2006's 13 November Open Letter
    Montréal 2006 and Transparency
    Corrections to Statements Made by Montréal 2006
    Federation Press Release Examples
    Équipe Montréal's participation during in-camera discussions
    Description of the question and answer session with Montréal 2006 at the Chicago meeting, and Federation deliberations
    Sydney 2002 Sports Participant Survey
    M2006 Criticisms of the Federation's Strategic Plan
    Goals and Resources — The Worth of the License Fee
    A Host's Self-Interest — Consultation v. Control
    Comments about the FGG Board structure
    The FGG and the Montréal community
    Moving forward

    Thank you for your continued patience and trust

  4. Now, after taking time off to return to our respective lives and reflect on this unquestionably unique chapter in Gay Games history, we write at length to assure you about the Gay Games' future, talk to you about why it is important that the parent organization maintain a role on your behalf in the running of each Gay Games, and — our least enjoyable part — address some of the statements published by Montréal 2006 (M2006) in the last couple of days of the Federation's 2003 annual meeting.


  5. We acknowledge the requests of our many supporters who have asked us to address in some detail our viewpoint of what happened. At the same time, we acknowledge the views of those who say "enough already" — feel free to skim or stop at any time.


  6. At the risk of overkill, there are links to other documents within this letter that can give you even more information.


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    The Federation of Gay Games — Who we are

  7. As you know, the Federation (FGG) is an international all-volunteer organization. We are a community-based organization that has as its mission ensuring that an event called the Gay Games 1) is held every four years, and 2) is designed to meet the needs and wishes of Gay Games participants. We cannot state that more simply.


  8. Regardless of the title, it is wrong to think of us as a faceless "federation" or "corporation." We pay dues to belong, and most of us pay our own way to attend at least one full week of meetings each year, giving up personal vacation time and significant social life, freely choosing to devote our community service hours to ensuring that the Gay Games not only exists but thrives.


  9. Our meetings involve long hours in committee discussions and general sessions. As with all organizations, it is challenging to do the work as efficiently as possible. We do not pretend to have all the answers.


  10. We come from a wide range of nationalities and interests. The Federation represents many of the best groups that the global LGBT community has in sports and culture. Many organizations serving on the Federation's board were started by participants brought together at a past Gay Games. Many individuals on the board have actual experience running Gay Games events — from the initial questioning of "what are we getting ourselves into?" all the way through to writing the thank you notes afterwards. We are wholeheartedly committed to the future of this now 21 year-old event. It is our collective good will that provides a Gay Games host city with the knowledge and support to carry forward its own plan of success.


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    Federation disappointment, and disappointment around the world

  11. It goes without saying how profoundly disappointed we are regarding the failure of license agreement negotiations with Montréal 2006. Nevertheless, the Gay Games event does not belong to any one host city — it belongs to the world. One way the Federation works to ensure that the Gay Games belongs to the world is by letting our board be open to any group that supports the Gay Games' goals. We recognize the disappointment felt around the world by the end of the relationship; this same disappointment was felt deeply within our own membership.


  12. The decision by Montréal 2006 to stop negotiations is not the end of the Gay Games as an event. It is, in fact, a possible addition to the international LGBT sports calendar. People supporting either organization in the current situation should simply adjust to the fact that, at this point in time in the world, the two groups' viewpoints of what the Gay Games event should look like could not be reconciled. We respect Montréal 2006's decision to put on the Rendez-Vous 2006 event separately, and before going on we want to state for the record that, regardless of comments below responding to statements made by Montréal 2006 about the Federation and the Gay Games, we wish them success in their endeavor.


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    A comment about Montréal 2006's messages

  13. Our language here must be blunt in places simply because so many of M2006's public statements have, over the last several months, been extremely critical and one-sided. We understand their position in some respects — everyone is, of course, still looking for a permanent, successful formula for the Gay Games event — but M2006's emotions have sometimes clearly gotten away from them in depicting their side as noble and just in the face of a cruel and unreasonable Federation of Gay Games.


  14. Montréal 2006 has several full-time employees who, it appears, have recently worked virtually around the clock managing an extensive negative media campaign against the Federation. Using classic public relations techniques, they have disparaged the many organizations and individuals who are the guardians of the Gay Games movement, accusing us of employing divisive tactics they themselves practice — all this after having publicly traded on the good will of the words "Gay Games" for two years.


  15. We likewise understand Montréal 2006's frustration over the collapse of the negotiations; but while freely pointing out perceived Federation shortcomings, they have consistently failed by omission to acknowledge their own role in developments, speculatively accusing Federation directors by name for actions without getting all the facts, and not being up front with the Federation or the public about the power behind the organizing efforts in Montréal. In light of these events, the Federation has consistently attempted to take the high road and not single out their representatives. The Federation has trusted that in time and with perspective its volunteer directors would be able to present fairly our side of the story. That is, of course, what we are doing here.


  16. In particular, Montréal 2006 has released two documents that we are addressing here: their open letter dated 13 November 2003, and their November 2003 comments about the Federation's current strategic plan. While we recognize Montréal 2006 says they "deeply regret" the fact that the situation has become so public, at the same time they have shown no compunction about challenging the Federation with these documents in e-mails sent around the world and documents posted on their website. Equal time compels us to respond to statements with which we disagree to show both sides of the picture.


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    The Federation's Negotiation Team

  17. As we had done with Sydney, the Federation created a liaison task force with Montréal. This twelve-member group came from a wide range of backgrounds: age, gender, nationality, culture/sports, individuals/organizations. This group was not a pre-established clique — in fact, several individuals had numerous respectful disagreements and differences on various past issues. However, we think it is indicative that during the entire period of negotiations there was always a strong consensus for our line of conduct and there was even unanimity on all major decisions.


  18. In contrast to Montréal 2006's all-Canadian negotiation team, our contract negotiation team was comprised of two Americans, an Australian, a French-speaking Italian who at one time lived in Montréal, and counsel native to the U.K. This group and the Federation's larger Montréal Liaison Task Force were empowered by the board to oversee negotiations. A democratic vote of the board gave these groups their authority; several additional votes extended their authority. The Task Force reported regularly to the board and, with the exception of certain drafts of the license agreement, furnished the board with complete copies or all relevant information in all documents exchanged between our negotiation team and M2006.


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    Negotiation "Agendas"/"Strategies" — and Honor

  19. The Federation knew that if the negotiations with M2006 ended unsuccessfully, we would be without a host three years before the planned date for Gay Games VII. For this reason alone, the Federation's best interest was to conclude an agreement with M2006. Equally, in that event, M2006 would be in the position of having received all the advantages of being a designated host without being subject to most of the duties required of a Gay Games host by contract.


  20. Such advantages included:
  21. The latter two items in particular point up as a falsehood Montréal's claim never to have received any information of use in the planning of their event.


  22. Duties of a host include:
  23. Only by signing a contract would the Federation have begun receiving any of those funds and those approval rights.


  24. Equally true, the Federation knew that if the negotiations with M2006 ended unsuccessfully, the FGG's actions and decisions would be scrutinized by our constituents, which is happening now. Unlike M2006, the Federation represents the interests of perhaps hundreds of thousands of individuals and the Federation has always felt accountable to them.Payment of a license fee.


  25. For this reason as well as our own commitment to fairness — because, at one time, our board was clearly enthusiastic about the M2006 organization — the Federation was motivated to reach an agreement with M2006 and in that objective we were compelled to take steps that could be substantiated later by facts and by clear good faith.


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    What does "consultation by the governing body" mean?

  26. Here is how it worked with Sydney 2002: Sydney 2002 sent the Federation detailed quarterly budget reports, and there were monthly telephone conferences in which S2002 gave us their latest profit/loss statements, cash flow schedules, and reports from the executive director and key staff. Those reports included information such as participant registration numbers (we could see which sports were on target and which were not), status of venue contracts (so the Federation could tell how far along certain venue contracts were to being finalized, including the costs for each venue, and what if any percentage was funded or value-in-kind from government or sponsor sources), and sponsorship contracts (status of the CEO's work in that area for various contracts).


  27. We consulted with Sydney about their merchandise — a perfect example was a T-shirt design that resembled a prominent, internationally-recognized logo (Gucci) which could have resulted in a trademark lawsuit. The Federation also assisted Sydney 2002 in a wrongful termination lawsuit by an employee. We helped Sydney 2002 fight an injunction filed by Sydney Aussie Stadium area residents ostensibly over noise-related reasons in relation to the opening ceremony. (We address the matter of press release and promotional materials' review and approval further below.)


  28. Simply put, this is consultation, not control. Through their press releases and e-mails, Montréal 2006 has, for their own reasons never fully revealed to the Federation, used the word "control" repeatedly to convince people that consultation such as the above is excessive. Until our relationship began with Montréal 2006, we never even thought of it as control — in talking to the press in the past we described it as an ability "to assess the organizational readiness to put on the event."


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    Why did negotiations take two years? — A timeline

  29. M2006 said in Johannesburg in October 2001 that they were ready to sign the draft bid license agreement and pay the Federation US$100,000 immediately. At the time, their pledge seemed little more than a statement of confidence in their own organizing abilities. Clearly, however, the draft bid license agreement had to be tailored to the special needs of whichever city had won the bid. The Federation did not accept any money from M2006 and said it would do so only when the two parties had a mutually acceptable license agreement.


  30. Montréal 2006's bid preparation and presentation was, without a doubt, excellent. They, like all four bidding organizations, were applauded by Federation directors and also asked very hard questions about their bid plans. We need not repeat the many strong points offered by Montréal; we have mentioned those frequently in past public statements.


  31. Some of the most pointed questions specifically asked of M2006 — which we believe should have been a strong signal to them about the possible areas of negotiation or FGG concern should they win the bid — involved the size of their plans (19,000-24,000 participants — a huge, drastic jump in the size of an event that had never paid for itself above 3,500 participants), the number and kind of entertainment/party events, the personality of the M2006 group as compared with that of their bitterly disappointed Montréal 2002 bid predecessors, and ramifications of combining the Gay Games with the annual Divers/Cité pride event.


  32. It was clear there were differences that needed to be worked out. Federation directors were much reassured, however, by statements such as, "[W]e want to work very, very closely with you; we want to listen to you. These are not the Montréal games. These are the Federation of Gay Games' games coming up, and this is the way we want to work." *(Excerpt, transcript of the Montréal 2006 bidding presentation, Federation of Gay Games Annual Meeting, Johannesburg, South Africa, October 2001.)


  33. No bidding organization was told that selection meant automatic approval of all bid plans — this is key. Bid plans are meant to show what an organization thinks is possible under the best of circumstances. All Gay Games VII bidding organizations supposedly understood that the final picture of what their Gay Games event might look like would emerge only following license agreement discussions with the Federation. Far from being hampering, this process was designed to help a host learn from the experience of others and not try to re-invent the wheel. There was plenty of opportunity within the framework of 30 sports, a select few cultural events and opening and closing ceremonies for any one host to put its local stamp on the Gay Games.


  34. Still, among other things, in October 2001 the full impact of 9/11 had yet to be felt. The world had changed. Sydney 2002 was encountering an Olympics hangover and reduced sponsorship opportunities, an unfortunately typical pattern of turnover among their staff, and a plan that repeatedly had to be cut back as participant numbers and local financial contributions were not as great as hoped.


  35. In the next several months, the first license agreement discussions with M2006 took place by phone and e-mail. Unfortunately, the Federation's increasing attention to Sydney got in the way of significant progress. While the Federation's consultation process with Sydney 2002 was productive during the year leading up to Gay Games VI, part of that process revealed to us that Sydney was struggling to put on its event and was reluctant to implement its own Plan B budget. We informed M2006 that our efforts to work with Sydney 2002 were dominating our time. M2006 seemed to accept that. In the meantime, both the Federation and M2006 pledged to each other that we would operate in the spirit of the draft bidding license agreement, and the first extensive face-to-face negotiations would take place at the Federation's annual meeting in Vancouver in July 2002.


  36. In Vancouver, nine months after winning the bid, M2006 first told the FGG that approval rights were a major sticking point. They did not want the Federation to see in advance any press releases or other promotional materials, merchandise, or sponsorship agreements. They also wanted to cut down on the amount and types of reporting to the FGG — they did not want us to see reports presented to their own board, such as those produced by their Executive Director.


  37. In other words, just when the Federation believed it had come up with a productive formula for working with a Gay Games host organization and anticipated improving on it by having it in place for four years rather than the year and a half with Sydney 2002, the next designated host was saying they rejected our business model.


  38. At any rate, in response to M2006's position, the Federation conceded in Vancouver on certain details of several issues. An example is the FGG approval process of promotional materials, which had worked well with Sydney even through several staff changes on Sydney's side. We believed it was important to retain approval over materials. What we conceded to M2006 was significant reductions in the amount of turnaround time for granting such approval compared to the FGG approval rights with former host Sydney 2002.* Overall, we left the meeting thinking we would be able to reach agreement with M2006 soon on all outstanding issues.
    *(Here's how the approval process worked: If the Federation did not get back to S2002 within a certain number of days, an item was deemed automatically approved:
    1) The host's nonexclusive right to use FGG trademarks, subject to FGG reasonable approval, was 20 business days;
    2) Merchandise, materials and licensing agreements — the FGG had 10 business days;
    3) Advertising and press information — 2 business days;
    4) Other issues such as media contracts and sponsorship contracts did not contain specific approval periods and were covered by the General Approval Provision, which gave each side 10 business days to approve. Since few materials were being generated in an immediate "crisis" mode, these were considered reasonable approval periods. Exceptions could always be made (and indeed were) should immediate turnaround be required. The process worked comfortably and well with Sydney — Sydney was grateful for factual corrections and the FGG was confident that Sydney's materials were professional and appropriately targeted. It was, in short, a productive consultative relationship of benefit to both organizations.)

  39. Then Sydney happened. Everyone knows Gay Games VI ended with a deficit of approximately AUD $2 million. What many people do not know is that, had it not been for the actions of some key S2002 board members and other guarantors to counter Ticketek's refusal to release funds (contrary to Ticketek's previous promise), the Sydney Gay Games was on the verge of cancellation just about a month before.


  40. This is the climate the Federation was facing in the lead-up to Sydney. In October 2002, the FGG wrote a long letter to M2006 discussing the history of the Gay Games event as well as the current crisis in Sydney (an uncomfortable repeat of the situation in Amsterdam). We told M2006 that the next host must accept the responsibility, for the long term good of the Gay Games movement, to break the cycle of financial deficits. We felt that it was something achievable and, with the right mindset, something that could be communicated to the public and sponsors as a positive way to approach the future.


  41. Some of us thought M2006 might be relieved not to feel obligated to carry out everything in the bid plans that they might have believed necessary to include simply in order to win the bid in the first place. Most of us thought M2006 was more likely not to be happy since it would indeed mean a reassessment of their bid plans. The latter was in fact the case, but M2006 eventually gave us indications that they understood and agreed with our position.


  42. After telling the Federation that they would operate in the spirit of the license agreement, M2006 nevertheless showed up in Sydney with a promotional booklet intended for distribution that they had not shown to us. It was clearly written well in advance of Gay Games VI. The booklet included a change in the sports roster and committed to print for worldwide distribution many of the largest figures from their bid plan. These were all areas that had yet to be negotiated.


  43. After extensive discussion, including consultation with M2006, the FGG's Montreal Liaison Task Force made the difficult decision to disallow the booklet's distribution. The decision was predicated on the knowledge that participants in Sydney already knew Montréal was the designated host for Gay Games VII and there was already considerable enthusiasm over that fact. Indeed, a ceremonial flag transfer to Montréal was to take place at the closing ceremony. The booklet's problems were deemed to outweigh the benefits of its distribution. We knew and understood that M2006 was not happy with that decision. At a meeting in Sydney on 1 November 2002, the Federation's board approved the decision to disallow distribution.


  44. At that same meeting, the Federation board set March 2003 as a deadline to reach a license agreement with M2006.


  45. Other meetings were held that week between M2006 and S2002 and between M2006 and the Federation. During a frank discussion, Sydney officials told M2006 that they agreed with the Federation that the number of participants M2006 wanted was too large of an initial plan and was setting Montréal up for failure should those numbers not be achieved. The media and sponsorship climate in Sydney had become less focused on the thousands of people who were indeed coming than on S002's inability to reach initial targets, leading to a perception, fair or not, that organizing efforts were failing.


  46. At the FGG's meeting with M2006 the morning of the closing ceremony, the FGG again discussed with M2006 the new realities facing the Gay Games movement. We asked them to scale down their initial plan and work up, rather than shoot for the moon and risk disappointment and possible financial failure along the lines of repeated Gay Games hosts.


  47. M2006 voiced all manner of objections, such as they should not be held responsible for the past, that things would be different in 2006, that they already had government support lined up that previous hosts had not had, and in fact that they had already promoted their large scale event to their sponsors and they would not be able to hold onto their sponsors' support for a smaller scaled Gay Games. They also told us that past financial failures were isolated to a host's local communities, that the news of the deficits was unknown in Montreal and that it didn't affect their market. Federation representatives found the latter difficult to believe given the number of Montréal and Canadian participants at the Gay Games and the innate curiosity of each city's local press. We told them the FGG had already heard previous hosts on several continents say "our city will be different."


  48. At any rate, M2006 did agree to do a revised plan. The FGG made it clear to M2006 that we were not saying no to their large-scale plan. We just wanted M2006 to start with an initial plan that could grow once income was secured. The Federation left Sydney believing that was the way both sides would head towards finalizing a license agreement.


  49. After a short break following the Sydney Gay Games, contract negotiations resumed. To the Federation's dismay, for some reason M2006 began putting back in provisions that, from the FGG's position, had already been settled or had already been accepted both in principle and in substance by M2006's failing to object on them when invited to do so* — in other words, going back in time. The FGG found itself in a time-wasting cycle of discussions about old matters, generating an ever-growing number of drafts. M2006 continued to say they wanted to sign the license agreement as quickly as possible, but we could not understand why they continued bringing up what we thought had been understood as settled.. *(Bidding organizations were similarly invited to point out 'problem' provisions during the bidding process. Montréal 2006 never mentioned these relevant sections at that time.)


  50. After reluctantly agreeing in November 2002 to provide us a downscaled base plan, M2006 waited until March 2003 before submitting their CAD $9 million budget to us — a 4-month delay. Even so, there was no plan describing how the event would be produced on that 9 million. Nevertheless, the FGG was encouraged by correspondence such as that from M2006's counsel on 7 March 2003 in which she wrote, "[A]lthough we may have some wish remaining of making GGVII a grand event, we do concur with the wisdom of your views that it is better to hold a smaller successful event than a big one that may ultimately turn into a financial fiasco. In that sense, your experience is precious."


  51. The Federation's initial deadline of March 2003 came and went. In fact, the Federation's Negotiation Team overstepped the FGG board's authority to continue discussions with M2006 — both the FGG and M2006 were participating in the gay and lesbian sports conference in Boston at the end of March and the FGG co-presidents, both members of the Federation's Negotiation Team, decided to schedule a trip to Montréal immediately afterwards in an attempt to move discussions along.


  52. The size of the initial plan continued to be the main topic of discussion. We asked M2006 to give us a budget and tell us what a Gay Games in Montréal would look like based on the participant figures in Sydney — about 12,000. Knowing that the Gay Games' return to North America would likely exceed the numbers in Sydney, from the Federation's standpoint starting with the Sydney figure seemed to be a prudent base from which to build. (When we received Sydney's final information, we learned the actual figure was closer to 11,000, but we did not change our 12,000-figure budget request of M2006).


  53. It was another five months later, in August, before they sent us new financial figures and this time the budget had grown back up to CAD $16 million. The August 2003 budget was accompanied by six scenarios ostensibly showing why 16,000 participants was the Òabsolute break-even pointÓ financially. However, all M2006 had done in the different scenarios was proportionally lower the amount of participation fee income with no changes in expenditures — neither fixed nor variable — and, in particular for items like ceremonies, outreach, or venue costs, there was no analysis of what items might be changed to produce a break-even event at lower participation numbers.


  54. Meanwhile, as outlined elsewhere in this document, the Federation was caught between press requests for Federation statements about Sydney and a new prospective host that did not want the Federation to speak openly to the media about anything. Despite M2006's having told the Federation that they would provide budgets for a smaller scaled event over a range of sizes, M2006's private assurances became question marks in the Federation's mind as M2006 continued to speak to its local press and at the IGLA Championships in August about the larger numbers in their bid plans.


  55. Eventually, in early September 2003, M2006 went for broke and produced Draft 13. Many items that were consistently present in the contract during the previous two years of discussions were so radically different in Draft 13 that the clock essentially started from zero. Negotiation details erupted in public, and M2006 began a public campaign urging arbitration or mediation and offering up a Montréal-based arbitrator (see paragraphs 83-87 below). In an attempt to lobby Federation directors to support M2006's preferred license agreement Draft 13, they spent thousands of dollars on direct mail packages when the FGG had already sent its directors all of the same critically important documents free via e-mail.


  56. For various reasons, negotiations never progressed to in-person meetings. Nevertheless, members of the Federation's Negotiation Team were willing to travel from Paris and Sydney for meetings in New York. The perhaps tedious details are that we offered to meet with them there on one date in October and they did not get back to us in time. We followed up and offered another date in New York. Without indicating whether or not they accepted this second proposal, M2006 offered a different date in Montréal. We responded that our team could not make that date and offered that the two negotiation teams meet in Chicago since M2006 representatives would already be there as the host designate.


  57. The first meeting was scheduled for Friday night, 7 November, where the FGG Negotiation Team was supposed to have access to the contracts and agreements concluded by M2006 with other parties. But late that day Montréal 2006 informed our counsel that they would not let any Federation directors see those documents. The in-person negotiations between the two groups finally got underway Saturday morning, 8 November (other details in press release example of 9 November 2003 below).


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    M2006 financial status and spending strategy

  58. M2006 repeatedly claims to have secured unprecedented financial support (that they estimate at roughly CAD $5 million) from various forms of government and government-related companies. We agree that the apparent level of support secured in advance for what was originally intended to be an official Gay Games event is unprecedented.


  59. When one looks at these contributions, however, one realizes that many are value-in-kind contributions, or cash earmarked for specific purposes (e.g., international promotions and the production of a promotional video). Only a fraction of the contributions come under the form of undesignated cash that M2006 is able to allocate freely, in particular to operations and production of the core components of the event.


  60. In M2006's budget, the largest income line made of pure, hard cash is the total of the participant fees, which — together with ticket sales and merchandising — constitutes more than the half of the budgeted income. In our view, the fact that so much of the income was coming from the participants, whose interests the Federation represents, justified that the Federation should have some degree of approval over the allocation of these funds.


  61. M2006's estimated time line to receive ticket sales revenue and for the return-on-investment on some budget items (e.g., the ceremonies) appeared overly optimistic as well, compared to Sydney's.


  62. An arguably excessive emphasis of the M2006 budget on marketing and the unprecedented size of their personnel hiring plan were also reasons of concern for the FGG. M2006 basically appeared to be allocating first and foremost their resources to fund a P.R. machine programmed to invest a too-important fraction of the Gay Games budget — most of which is participants' money — to promote the Montréal event, and, perhaps more so, Montréal in itself as a gay travel destination, with no sufficient guarantees that the values of the Gay Games would be preserved in this process.


  63. This spending strategy also did not fit with the Federation's call for extremely prudent financial spending, focused mainly on the core components of the Gay Games event (a 30-sport festival, opening and closing ceremonies and a few select cultural events) that the FGG had been advocating for months.


  64. We also question whether the Montréal model is sustainable in the future. It will take a sizeable commitment on the part of local governments, and we do not know how many municipalities will make a similar investment for future Gay Games or whether it is, in actuality, a one-time occurrence.


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    M2006 and Tourism Montréal (Tourisme Montréal)

  65. A senior representative of Tourism Montréal, Mr. François Goulet, is one of the most recent members of the M2006 Board, replacing Philippe Colas, one of the representatives of the Montréal's LGBT sport community. During the negotiations, M2006's attorney informed the Federation's counsel that Mr. Goulet was a key decision maker in the negotiation process.


  66. A key Montréal 2006 communications employee has been on loan from Tourism Montréal. As well, the President of Tourism Montréal traveled to Johannesburg as part of Montréal 2006's bid committee.


  67. These and other factors made Federation directors wonder whether Montréal 2006's plan was less to use their city and the support of the tourism authority to showcase the Gay Games than to use the Gay Games as a part of the tourism authority's plan to showcase their city — further, that that plan was designed mainly to attract money of our participants to boost the city's economy, possibly with reduced attention to the best interest of the participants and the Gay Games movement.


  68. The Federation obviously recognizes that one of the reasons cities bid for the Gay Games is the attractive prospect of the important economic impact, and the FGG also acknowledges that a strong partnership is necessary between the host organization and the local tourism authority. But in the number and kind of activities being planned simultaneously within one massive week in Montréal in 2006, the shift of focus towards the underlying economic interests rather than the desire of perpetuating the Gay Games' values increasingly became an issue of discomfort for the Federation board.


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    Comments About Montréal 2006's 13 November Open Letter

  69. One of the most disappointing aspects of the past several months has been Montréal 2006's frequent, persistently negative and misleading statements made about the Federation. We think there surely must have been a way for them to publicly acknowledge differences in our respective positions without resorting to accusations that they themselves know to be untrue. By criticizing the Federation, they criticized by extension the leadership of some of the best LGBT organizations in the world who serve on our board. We do not understand why they may have thought their statements might somehow have served to bring (or drive) the two sides closer together. If anything, their public campaign only served to erode their support on the Federation board. M2006's 13 November Open Letter contains much typical such language.


  70. For lack of any better method, we will simply address certain sentences or issues raised in the order presented in their 13 November letter.


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    Montréal 2006 and Transparency

  71. In the second sentence of their letter, they write, "Montréal 2006 [makes a final statement] in the spirit of transparency." The Federation wishes M2006 had been more transparent with us. They have continually cited a total figure of government assistance without clearly breaking the figures down into cash and value-in-kind support until the negotiation meeting of 8 November. They mentioned having already spent CAD $1.5 million in organizing efforts but never gave the FGG any report detailing what that money has been spent on. We do not know to whom M2006 is obliged to deliver reports. The Federation has previously known the salaries of host employees as a simple matter of budget review; no such information has been made available about M2006 staff, and we do not know if this information has been provided to other parties, including Montréal citizens. As noted elsewhere here, for the first time in Gay Games history the parent organization has not been privy to contracts the host — even a prospective host — has signed with outside parties.


  72. Also as noted elsewhere here, open community meetings — not just staged press conferences — have been held by all previous Gay Games hosts as a way of garnering support and addressing matters of local interest. When would Montréal 2006 begin such sessions? The FGG co-presidents were in Montréal last April, yet Montréal 2006 would not organize a get-together of sports leaders nor its board members for even a casual meeting. The Federation has variously proposed joint meetings with M2006's business supporters or Divers/Cité. Few of these reasonable requests were even acknowledged by M2006, much less followed up on.


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    Corrections to Statements Made by Montréal 2006

    "The kind of dialogue the FGG is engaging in its press releases serves no purpose, except to be divisive."
  73. Simply put, this is media spin. Montréal 2006 attacked the Federation in public first on 17 October 2003 after Outsports.com interviewed representatives of both the Federation and Montréal 2006 and published an article on 16 October 2003 about the status of the negotiations. As previously noted elsewhere, in our representative's interview with Outsports.com, the Federation acknowledged that negotiations were continuing, refused to go into details that were not already public knowledge about the matters being negotiated, and respected Montréal 2006 for having its own viewpoints in the negotiating process ( http://www.gaygames.com/en/FGGOutsportsInterview20030928.htm.) For whatever reason, Montréal 2006 not only mentioned figures to Outsports.com about areas being negotiated, such as participant numbers, they also said they thought they could "hold successful Games without the FGG if obliged to do so." (Article available at Outsports.com website.)


  74. In what appeared to many Federation directors as a panicked form of damage control, the next day (17 October), M2006's discipline and emotions appeared to go unchecked and they distributed a pages-long question-and-answer media release — including sending it to Gay Games participants around the world — going into lengthy and explicit detail about the negotiations and criticizing the Federation's viewpoints, clearly compounding public divisions themselves.


  75. In their 13 November letter and at other times, Montréal's divisive and untrue statements have included:
  76. Montréal 2006 has since repeatedly attempted to make the Federation look unreasonable or out of touch with the needs of the LGBT community. Montréal 2006's "divisive" comment was written about what were in fact fair, temperate and frank press releases issued by the Federation before and during the recent annual meeting (these press releases are still available on our website). The press releases issued on 31 October and 9 November are clear examples of the tone of the Federation's communications approach.




    77. Return to Top

    Federation Press Release Examples

    FEDERATION OF GAY GAMES OFFICIALS ANNOUNCE MEETING WITH
    ORGANIZERS OF THE 2006 MONTRÉAL GAMES
    Chicago meeting between the two parties seeks to finalise negotiations
    between the licensing body and designated host city

    WASHINGTON, D.C., 31 October 2003 — The Federation of Gay Games, in response to concerns expressed by the international gay, lesbian, bisexual, transgender and Gay Games communities, has proposed to schedule a face-to-face meeting with Comité organisateur Rendez-Vous Montréal 2006 (Rendez-Vous Montréal 2006 Games Organizing Committee) in Chicago, United States of America on 8-9 November 2003. The meeting will seek to resolve all outstanding issues relating to the draft license agreement the two parties have been negotiating during 2002-2003.

    In the interest of the best possible negotiation circumstances, the Federation supports the position that both the Federation and Montréal 2006 keep private the details of all sections of the license agreement that are still pending during this process until after the session adjourns in Chicago.

    "The Federation of Gay Games urges representatives of our communities, including our community-based media, to show their support for this movement by allowing the negotiations to proceed in the most serene context possible," said Roberto Mantaci, Paris-based co-president of the Federation of Gay Games.



    MONTRÉAL 2006 WALKS AWAY FROM NEGOTIATIONS
    WITH FEDERATION OF GAY GAMES

    CHICAGO, 9 November 2003 — Legal counsel for the Organising Committee for Montréal 2006/Comité Oganisateur Montréal informed the Federation of Gay Games today that Montréal 2006 had walked away from further negotiations with the Federation regarding the licensing agreement for Gay Games VII.

    "We deeply regret that Montréal 2006 made the decision to walk away from these negotiations which were planned with the best interests of future Gay Games participants in mind," said Federation of Gay Games co-president Roberto Mantaci. "The Federation made multiple concessions to Montréal 2006, and we are confident that we tried everything we could to reach an agreement with them while remaining true to our stated obligation towards safeguarding the fiscal responsibility by Gay Games hosts. Despite Montréal 2006's unilateral action, the Federation reaffirms our commitment to the continuation of future Gay Games."

    The Federation is in Chicago for its annual meeting, which opens officially on Monday morning, 10 November.

    The Federation had hopes that the negotiations between the Gay Games' governing body and Montréal 2006 would result in a license agreement that the Federation's board of directors would receive for discussion and a vote during the meeting.

    The first indication that negotiations might not go as well as hoped arose Friday evening, 7 November, when Montréal 2006 cancelled a previously scheduled meeting during which the Federation's license agreement team was to have had its first look at contracts Montréal 2006 had negotiated with local sponsors and supporters.

    Following a 15-hour meeting Saturday, 8 November, that went into the early hours, Montréal 2006 announced it was ending discussions while the Federation was drafting revisions to the license agreement that had been substantially agreed upon during the course of the day.

    "It is sad and perplexing that after two years of attempting to come to an amicable agreement, and repeated concessions by the Federation, Montréal chose not to assume the obligations of the license agreement," said Federation co-president Kathleen Webster.

    Federation officials said the major stumbling blocks were about the size and scope of the event and the registration fee amount that participants would have to pay.

    -30-
  77. In other words, when the Federation tries to state its side of the story, depict a timeline of events so that the public can judge for itself what happened and when, or, as in our 13 November 2003 press release, defend itself from false accusations, Montréal 2006 declares that the Federation is being "divisive."


  78. It is also striking that M2006 continued to use such negative statements after acknowledging to the FGG board on 10 November that M2006 "started the first press release. We are doing a business. We did a pro-active campaign." Their spokesperson also said, "[I]t's time for both sides of this to take the high road." Only three days later they resumed their attacks. (See paragraph 101 below for link.)


    79. "Essentially what Montréal has been seeking for months … has been the opportunity to be heard before the full membership of the FGG …"
  79. No such formal request was made for the Federation's 2003 annual meeting. But, in fact, Montréal 2006 has had the opportunity several times. In 2002, while negotiations were ongoing, they spoke to members of the FGG board in Vancouver and in Sydney. They have spoken to members of the FGG board at sports events such as the 2003 IGLA Championships. They have phoned members of the FGG board.


  80. Despite their agreeing that the FGG's Montréal Liaison Task Force and Negotiation Team would act as sole contacts for written correspondence between M2006 and the Federation, M2006 circumvented that process several times by spamming the entire FGG board of directors with any material they saw fit (many of our directors' e-mail accounts froze due to M2006's inappropriate actions). All this same material had already been sent to the FGG board by our Negotiation Team or addressed in the Negotiation Team's regular reports to the FGG board. As noted above, M2006 spent several thousand dollars mailing their Draft 13 and supporting documents to the FGG board — again, all relevant documents having already been distributed to the FGG board by our Negotiation Team. M2006 was obsessive about having its voice heard, needlessly because Federation representatives held up our end of the correspondence bargain.


  81. This has become a rhetorical weapon only after the fact in M2006's attempt to paint the negotiation process and the FGG board's deliberations as unfair. The deliberation process is addressed in more detail below.


  82. By the same token, Montréal 2006 has not granted the Federation an opportunity to be heard by the full M2006 board — we never met several members of their board, despite our co-presidents' having requested to do so during their visit to Montréal last April — nor, as already mentioned, has Montréal 2006 complied with the Federation's expressed wish that Montréal 2006 hold open community meetings.


    83. "Montréal 2006 did everything in its power to find solutions to reach an acceptable agreement to both parties, formally requesting mediation, arbitration, and to be heard by the entire membership of the FGG. All were formally denied by the leadership of the FGG."
  83. What is being left out of the above statement is that Montréal 2006's only acceptable agreement (license agreement Draft 13) essentially called for the Federation to give them the use of the words "Gay Games" and then go away. Montréal 2006 wanted to be its own judge as to what a Gay Games event in their city should look like, how large it would be, how much it would cost, the messages it would convey, and how many ancillary activities would take place at the same time. Over the last eight years, Gay Games participants have been increasingly vocal to the Federation that this blanket use by Gay Games hosts has gotten out of hand. In different words, Montréal 2006 is criticizing the Federation for actually listening to the participants.


  84. More accurately, when it became clear that the Federation would not give them unfettered use of the Gay Games brand, Montréal 2006 decided to walk away.


  85. We have to ask, when M2006 brings up mediation and arbitration, why can't they present the full picture? The Federation was the first to propose an arbitration clause in our license agreement Draft 7, dated late October 2002. The internationally-respected Honourable Justice Michael Kirby of Australia agreed to nominate a mediator/arbitrator if ever needed.


  86. Yes, as differences between us increased during the past several months, Montréal 2006 proposed mediation and arbitration — but on their own terms, using a Montréal based arbitrator and meeting in Montréal. The Federation wrote to M2006 that we were not opposed to a mediation process as long as M2006 would provide some parameters to set the basis of such mediation. M2006 always failed to reply to these requests. In particular, the Federation said that more reasonable conditions would be to meet in a neutral city accessible to all parties (Federation Negotiation Team members were located in Paris, Sydney and Philadelphia).


  87. With respect to arbitration, M2006's legal counsel openly agreed with the Federation's legal counsel's opinion that arbitration is applicable to legal cases where an agreement is already in place and the two parties disagree on the interpretation of some of its parts. This did not apply to the FGG/M2006 situation as, precisely, a license agreement was not in place.


  88. The leadership of the FGG did not deny M2006 access to the membership of the FGG, even after M2006 first intimated legal action against the FGG in a letter from their attorney dated 28 August 2003 and a letter from their co-presidents dated 29 August 2003. Even at the Federation's 2003 annual meeting, Montréal 2006 representatives freely roamed the halls in Chicago. Until Montréal 2006 again threatened litigation in their attorney Marie Laure Leclercq's letter to the FGG of 11 November 2003, they were allowed to sit in during the open session and Federation committee meetings. At that point, the only legally responsible option was to disallow their attendance at the rest of the Federation's annual meeting. (See also paragraphs 91-94, 107 below.)


    89. "No parties walked away."
  89. A commonly accepted term for the action of the party that formally calls a halt to negotiations is that they "walked away." We stand by our use of this term to describe what Montréal 2006 told us they were doing at about 2 a.m. on Sunday, 9 November. Indeed, little more than an hour later, Montréal 2006 put on its website that they had ended the negotiations in Chicago. Key members of the Montréal 2006 Negotiation Team — co-president Lucie Duguay, board members Paul Uline and Franois Goulet, and counsel Marie Laure Leclercq — all left Chicago during the day Sunday.


  90. On Sunday, 9 November, the FGG co-presidents, together with other witnesses, met M2006's co-president Mark Tewksbury for the first time after the end of the negotiations. Still surprised over the unexpected development, our co-presidents asked Mark what had happened. Mark's answer was precisely, "We walked away. We saw the final contract and we walked away." The FGG co-presidents expressed their confusion over that statement, because, as they said to Mark, the Federation's Negotiation Team was in the midst of finalizing the contract when they were told the news that M2006 had decided to end the negotiations. Mark said he took note of that and would report it to his group. There was no follow-up to that conversation. Montréal 2006 representatives of course since changed their position to deny that they walked away.


    91. Return to Top

    Équipe Montréal's participation during in-camera discussions

  91. Montréal 2006 quotes the Federation's mission statement to claim that the exclusion of Équipe Montréal from the discussion about the Montréal 2006 contract negotiations was a violation of the principle of inclusion. As a corporation itself, Montréal 2006 must recognize that, just as it must comply with the laws in the Province of Québéc, the Federation is obliged under its Articles of Incorporation to operate under laws of the State of California that encompass a wide range of internal corporate responsibility requirements on the part of directors. To safeguard its role as the steward of the Gay Games movement, the Federation takes its legal responsibilities seriously. Annually, Federation Directors are sent materials reminding them of their duties of loyalty and care and they must sign conflict of interest statements in return.


  92. Équipe Montréal distributed an e-mail letter around the world during the weeks before the Federation's annual meeting. The letter contained several inaccurate statements and took Montréal 2006's side in the negotiations, making claims Équipe Montréal knew were prejudicial against the Federation, and they did not include or acknowledge positions taken by the Federation. The letter was indisputably one-sided to the point that Équipe Montréal appeared to be acting as an "agent" of Montréal 2006 — Federation directors had no option but to act to protect the interests of the corporation. No other Montréal 2006 supporters on the FGG board, and there are many, were excluded from the in-camera discussions; however, none of the others crossed the line of duty of loyalty and care like Équipe Montréal. We regret the situation — there was nothing happy about it. But any other responsible organization faced with similar circumstances would have had to make the same decision.


  93. An organization that is fair applies its own rules equally and impartially to all its members. The same policy was applied to Team Sydney four years ago and for the entire period of the partnership between the Federation and S2002, and yet Team Sydney never crossed the line of duty of loyalty. Nobody, Team Sydney and Équipe Montréal included, ever made an issue of the exclusion of Team Sydney from any Sydney 2002 related discussions and votes.


  94. However, it is incorrect that Équipe Montréal's was suspended from the Federation board, a statement that can be found in some public documents. According to our conflict of interest policy, Équipe Montréal was simply asked to excuse itself from any discussion and vote regarding the relationships between the FGG and M2006, including the contract negotiations. Équipe Montréal maintained all other rights and duties as a Federation Director.


    95. Return to Top

    Description of the question and answer session with Montréal 2006 at the Chicago meeting, and Federation deliberations

  95. The depiction of the question and answer session at mid-day on Monday, 10 November, is another case of M2006's presenting an incomplete picture.


  96. First, given that Montréal 2006 had walked away from the negotiations, the Federation was under no obligation to continue discussing options to go forward with Montréal 2006 at all. The fact that the board continued to do so for many hours is an indication of how deeply the Federation board believed it needed to be certain every last possible opportunity to go forward with its host designate was respected.


  97. We describe the course of deliberations for the record:


  98. Following the Montreal Liaison Task Force's report to the Federation board that morning, there was open-ended discussion. A motion was made to allow Montréal 2006 representatives to address the floor. Speakers against the motion said that the board had read exhaustive documents, including multiple draft license agreement versions, and extensive correspondence exchanged between the two groups — would anything new really be learned? Speakers for the motion said that, in the interest of fairness and because four M2006 representatives were still in Chicago, we should invite them to address the board. The motion passed.


  99. To provide some structure, a second motion was passed to pose some open-ended questions to the Montréal 2006 representatives. Directors submitted questions in writing to two people who then grouped them into common themes, arriving at nine questions. After discussion, the board thought that three minutes per response was a reasonable way to proceed, figuring the nine questions being asked would not likely take more than about 30 minutes to be answered adequately. The motion was amended to read nine questions with three minutes for each, and the motion passed. At about 3:30 p.m., Montréal 2006 representatives joined the Federation board.


  100. Montréal 2006's depiction of the question and answer session twists it into something different than what actually transpired. For one thing, Montréal 2006 writes as though their co-president Mark Tewksbury was the only one present. All four remaining Montréal 2006 representatives in Chicago were part of the session — Sports Director Josée Généreux, Vice Executive Director Jacques Taillefer, and Director of Marketing Tom Czerniecki.


  101. All nine questions were read, then each question was asked individually. Each time before answering, Mark consulted with the other three M2006 team members. They had more than twice the amount of time available to address the issues raised by each question; they chose to take only 12 minutes themselves and then left the room (http://www.gaygames.com/en/FGGMontrealQ&A20031110.htm).


  102. Montréal 2006's position was clear — it was Draft 13 or nothing. They accurately depict this viewpoint in their 13 November 2003 open letter. Among their answers, they gave the Federation two hours to agree to Draft 13.


  103. Resuming deliberations, the Federation board devised three motions that would be taken in sequence: 1) cease negotiations now; 2) offer M2006 again the license agreement draft that both parties had been working on when Montréal 2006 walked away (Draft 13.5, retaining certain approval rights by the Federation); or 3) offer to sign Draft 13 (effectively giving up all FGG approval rights). Passage of one motion would eliminate the need to consider any subsequent motion.


  104. The margin, however, was one vote, and some directors expressed confusion about the order of the three motions. Showing flexibility and commitment to fair process, the board continued discussion. Eventually the earlier motion was rescinded and the process began again. This time the motion to cease negotiations failed, but barely, and only due to a tie, 23-23.


  105. The board moved on to the motion to offer Draft 13.5 and developed language that would offer further concessions to M2006 than had been finalized early Sunday morning. The hope was that this would show Montréal 2006 our good faith attempt to continue the relationship. That motion passed overwhelmingly, 40 yes, 4 no, 2 abstentions. We posted the result of that vote on our website later that evening so the public could see that we had continued to try to broker a deal with Montréal 2006 (http://www.gaygames.com/en/media/Release-10-11-03.pdf). The key sections of that motion removed the Federation's right to a share of any post-Games surplus and offered an amnesty clause upon disclosure to the Federation of M2006's third party agreements and activities. The offer was good until 1 p.m. on Wednesday, 12 November 2003.


  106. Montréal 2006's depiction of this process is, as noted above, quite different. What we want the public to know is that, later, several of those directors who voted against the motion to cease negotiations with Montréal 2006 said on the floor they were proud that the board had honored a democratic process and the will of the body to achieve a result acceptable to the majority.


  107. At 6:15 p.m. the in-camera session ended and all observers, Équipe Montréal delegates and members of Montréal 2006 were welcome to join the full board. The Federation's resolution was publicly announced. Federation co-president Roberto Mantaci announced that Montréal 2006 representatives told him they did not have the authority to make the decision and would take the offer back to their board. Montréal 2006 did not ask to address the board further that day; it was late and the session adjourned.


  108. The next morning, Josée, Tom and Jacques informed the Federation that Montréal 2006 was turning down the Federation's revised Draft 13.5. The one remaining board member, Co-President Mark Tewksbury, was no longer in Chicago; in fact, he left in time to be back in Montréal for that morning's press conference where they announced they would indeed move forward with plans for Rendez-Vous 2006. Simultaneously, on 11 November 2003, M2006's attorney wrote a letter to the FGG's counsel using language that made it inappropriate for the Federation to allow the remaining Montréal 2006 delegates to attend further Federation committee meetings or the general session, or to distribute materials. It was time to move on, and the Federation had a full week of committee work to continue.


  109. That day, in its press release of 11 November, Montréal 2006 said, "After two years of discussion and a 400-page contract, after 15 hours of negotiations through the night Saturday into Sunday, after being given only 12 minutes to be heard during yesterday's all-day assembly, after all those efforts, the FGG found a way to have its members not vote on Montréal 2006's proposal!"


    110. "Montréal 2006 has received statements from each of the past host cities that make it clear the leadership of the FGG was a major cause in making their own events a failure."
  110. Until such statements and their spokespersons are revealed, there is no way to judge the accuracy of this remark. The Federation could pull out statements that are already on the record from past hosts that laud the Federation for its work.


  111. It is no secret that the Federation has had differences with past host officials, but these differences have almost without exception been in the service of the Federation's trying to curb excess and, particularly, ensure acceptable standards in the conduct of sports.


  112. As a way of illustrating that, let's shift gears and hear from someone other than hosts:


    113. Return to Top

    Sydney 2002 Sports Participant Survey

  113. More than 2000 sports participants at Sydney's Gay Games completed the Federation's online survey earlier this year (for more information about the survey, go to http://www.gaygames.com/en/SydneyQuestionnairePresentation_files/frame.htm and http://www.gaygames.com/en/SurveyVarianceAnalysis_files/frame.htm).


  114. An invitation to complete the survey was sent to the Sydney 2002 participants' mailing list. Here are the responses to questions 26 through 29 that were about the size and scope of the Gay Games:
    Question 26: Do you think that the Gay Games should place more or less emphasis on Sports Events?

    42% More
    57% Aboutthe Same
    1% Less
    0% Prefer Not to Answer

    Question 27: Do you think that the Gay Games should place more or less emphasis on Cultural Events?

    11% More
    55% About the Same
    33% Less
    1% Prefer Not to Answer

    Question 28: Do you think that the Gay Games should place more or less emphasis on Conference Events?
    3% More
    34% About the Same
    50% Less
    13% Prefer Not to Answer

    Question 29: Do you think that the Gay Games should place more or less emphasis on Official Dance/Party Events?
    5% More
    48% About the Same
    46% Less
    1% Prefer Not to Answer

  115. The responses above are not surprises. They in fact verify anecdotal evidence the Federation has provided the most recent Gay Games hosts and Montréal 2006 — more attention on sports, somewhat less emphasis on cultural activities and much less emphasis on conferences, and much less emphasis on dance/party events. The only one of the above activities that is overwhelmingly an income generator instead of an income user is the dance/party events. (More information about the Federation's opinion about dance events and parties is found in the Federation's "Image of the Gay Games" paper on the FGG website at http://www.gaygames.com/en/SPC_ImageOfGayGames031119.pdf. We are for them, with caveats about their promotion.)


  116. The very eve of negotiations in Chicago provided a striking example of how Montréal 2006 has been determined to go its own way, heedless of Federation advice about what the participants want. That was when Montréal 2006 posted on its website the formation of an exploratory committee to investigate holding a proposed conference schedule around the theme of respect (one of four components is scheduled to be about sports). Such a public announcement virtually guarantees such a conference program will proceed. So, add one more event competing with the sports component for attention during the week of Rendez-Vous 2006, as well as needing volunteers, participant housing, etc.


  117. Let's be clear: The Federation thinks such activities are wonderful and do much to advance the cause of the LGBT community. The question is what they have to do with a Gay Games event. The Federation has had most of its differences with hosts over what participants want: Participants tell us time and again they want an event that breaks even and primarily advances the cause of LGBT sports issues.


    118. "Contract negotiations with both Amsterdam and Sydney … both almost ended in failure."
  118. The assertion is totally false. Certainly there were issues that were sticking points and bumps in the road, but both of these negotiations were completed within a timeframe that allowed the Federation to approve the agreements prior to Gay Games IV and V, respectively, and for a ceremonial contract signing to take place at both events. In both instances, there were issues within the contracts that were ultimately revisited and some compromises were reached allowing both events to move forward.


    119. "The problems faced by Montréal 2006 … seemed to be the culmination of years of dysfunction within the FGG itself. It is an organization which has overseen four consecutive bankruptcies …"
  119. At the very moment the Federation in fact puts its foot down and tells the next host that future deficits must stop, we are claimed to be, right now, dysfunctional, and held responsible for the deficits during periods when significantly different personnel on the Federation board allowed its hosts free reign to do what they wanted. This is inexplicable.


    120. "The leadership of the FGG has become preoccupied with the 'brand' but has lost sight of the 'event.' "
  120. No. To the contrary, we are focused completely on the event and the fact that it and our participants deserve a spotlight on their own. We reject Montréal 2006's charge to us last year in Sydney that the Federation's vision is not "grand enough." Thirty sports, a band and choir event, and an opening and closing ceremony are certainly and sufficiently grand, and no host has gotten that exactly right yet. It was not wrong of the Federation to ask that Montréal be the first, and that they try to demonstrate some flexibility in their initial bid plans to help us accomplish it.


  121. That said, we will not apologize for our increased attention to the brand. As just one example, during the past several years the Federation, without help from its hosts, has successfully fought Internet pirates who tried to use various "gaygames" permutations as links to adult websites. We essentially license the brand as a benefit to the current host as an aid in fundraising. Montréal 2006 has traded on the Gay Games brand in developing its plans for the last two years to the point that it is confident it can now stand on its own and produce Rendez-Vous 2006 without the Federation. What kind of ingratitude is it that they now insult the Federation for attempting to ensure that the brand has value long after 2006 has come and gone?


  122. Federation directors would be irresponsible to allow a host to double the size of the event and create an outrageously expensive budget amidst the legacy of deficits without a fallback Plan B, which Montréal 2006 has clearly and publicly rejected as necessary or even wise. While we were prepared to proceed with the Draft 13.5 license agreement that would cement Montréal 2006's plan to hold a CAD $16 million Gay Games simultaneously with the annual Divers/Cité pride event, ever since the Gay Games IV/Stonewall 25 convergence we have become more cautious about such doubling up. Gay Games messages about the LGBT community and sports — the event's reason for being — have increasingly been lost in unnecessary additional events added at the last several Gay Games.


  123. We have direct evidence from past hosts that verify this. Two of New York's self-produced theatre events were huge losses; Amsterdam told us the fine arts program took too much effort for too little return, and they were forced to cancel exhibition sports events not supported by the Federation in the first place; Sydney expanded and then contracted its cultural festival when ambitions exceeded their resources, and their treasurer told us the chief cause of their losses was failure to implement their fallback budget plan soon enough.


  124. We have been doing nothing but zeroing in on the "event." The accumulated experience of the Federation board members — many of whom have already run Gay Games sports and other community cultural events ourselves — compels us to do so.


    125. "The FGG is an undemocratic, process oriented organization, run by a handful of individual directors who are consumed with preserving their own image of the Gay Games. There is no room for healthy opposition."
  125. This statement rewrites history. In fact, through a fair, democratic process involving the leading LGBT sports organizations from around the world and repeated input from Gay Games participants, the Federation has, over time, moved away from allowing hosts to do whatever they want. Montréal 2006 is objecting to the fact that they couldn't get free reign themselves.


  126. The Federation would love to find one ideal governing structure for corporations that makes everyone happy. It is impossible. Anyone attending Federation meetings today as compared with even five years ago will find committees that do more and better work, a meeting structure that is more efficient, and member organizations and individuals who have seen all sides of Gay Games logistics and have reached collective opinions about how best to move forward.


  127. The current leadership of the Federation has made a mantra of shaping our organization in a way that makes it more efficient, more apt to accomplish goals within its core mission, and more able to assist the current host in producing the most successful event possible. An example is the increased focus of our Outreach Committee on expanding and administrating a support program for aspiring Gay Games participants from underrepresented areas of the world or with inadequate financial means.


    128. "… how can the FGG do this to you?"
  128. Montréal 2006 acts as though they bear no responsibility for the situation, seeking to blame others. We answer such "victimology" by saying our position has been very clear — they should devise and take seriously a downscaled event and budget and use that as a base from which to grow. Out of one year and half of planning, Montréal 2006 refused to spend a few days doing what is essentially an accounting exercise to give the Federation and the public a depiction of a plan from which to grow. They eventually presented such a plan with Draft 13 in September 2003, but with no attempts to conceive any initial plan smaller than that based on a CAD $16 million budget (which eventually, for the sake of reaching an agreement with M2006, the FGG was willing to accept despite the high level of discomfort it generated). To us, the request for a downscaled initial plan seemed reasonable and a prudent way to do business. Montréal 2006, for reasons still unclear to us, would not complete this exercise in any meaningful way.


    129. "…a member of the FGG negotiation team used verbal and written threats to Montréal 2006 staff and sponsors to intimidate them."
  129. This is a reference to an incident whereby the Federation co-presidents wrote a personal letter to the President of Tourism Montréal, saying that the Federation was trying to reach agreement with M2006, hoping that by writing to him they could demonstrate the Federation was looking for ways to increase dialogue; they asked for his assistance to help proceed forward with the negotiations. The curt, dismissive reply from the President was not sent back just to the Federation's co-presidents but was distributed from the Tourism Montréal office to the entire internal Federation board e-mail list. A member of the Federation's Negotiation Team contacted the Montréal 2006 office to tell them in no uncertain terms that this was a breach of the use of an internal mailing list, an undesired solicitation, and likely illegal.


  130. Has Montréal 2006 ever allowed the Federation to use its internal board e-mail list? That question doesn't even need to be answered. It was right and appropriate for a Federation director to object, particularly when the intent of the Federation's original letter, to build bridges, was so rejected.


    131. "Montréal 2006 has come to the hard conclusion that to partner with the FGG would be to position ourselves to fail in the delivery of Gay Games VII." [and subsequent sentences in that and the next paragraph]
  131. The Federation has yet to be convinced that Montréal 2006 truly wanted a partnership. Montréal 2006 has showed clear signs of disrespect for the FGG at many steps in the negotiation process, especially during the past two months. As one member of the FGG Board has said, "There can be no partnership without respect." They said they wanted a partnership in 2001, but in hindsight we believe they made many statements in order to win the bid.


  132. Despite the incident at the FGG's 1997 annual meeting, when the Federation witnessed an unprofessional emotional outburst by the Montréal 2002 bid committee, the Federation still voted to entrust Montréal's 2006 bid group with the right to host Gay Games VII. The Federation, in its attempts to address past problems and devise a new relationship with the next Gay Games host, has in the last two years continued to endure intransigence and emotional outbursts by M2006 representatives, the repeated lack of straight answers by Montréal 2006 to questions posed in two years of correspondence, the unprofessional and impulsive revelation of contract negotiation details in October, the refusal to hold community meetings or be up front with their local sponsors about Gay Games history, the depiction of the negotiations between the two parties as though they are blameless victims, and insults which Montréal 2006 has artfully couched in public as " proof" that the Federation was irresponsible.


    133. "What would be divisive would be to put an event on at the same time as Montréal 2006…"
  133. We agree. The Federation believes that, should two events occur in 2006, they should not take place at the same dates.


    134. "In Montréal 2006 the athletes and cultural participants come first."
  134. We truly hope that is the case. We know that past Gay Games participants from Montréal have said they hoped Gay Games VII in Montréal would put the needs of the athletes first. Our negotiations with Montréal 2006, however, lead us to question whether the needs of the athletes and cultural participants may be used as a means to an end rather than an end in itself.


  135. The apparent end has increasingly seemed to be to get as many members of the LGBT community as possible to spend money in Montréal in 2006. Yes, there are many people working on Rendez-Vous 2006 who are deeply committed to furthering the cause of LGBT sports and cultural matters, but in many respects, are they wheels of an event that may be today as much if not more directed by Tourism Montréal than by the Montréal LGBT community itself?


  136. There is nothing wrong with the kind of event scheduled in Montréal in late July/early August 2006, but it is not the kind of event that the Federation is interested in allowing to be connected with the words "Gay Games."


  137. We do know that there are valuable, knowledgeable members of the Montréal LGBT sports community and veterans of the Gay Games who feel that the needs of the athletes are not being given enough attention, and that the athletes do not have enough representation among the decision makers in the overall planning of Rendez-Vous 2006.


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    M2006 criticisms of the Federation's Strategic Plan

  138. Let us now address the November 2003 document that M2006 has posted on its website commenting on the FGG's 2003-2004 strategic plan. The FGG strategic plan M2006 refers to was an internal, preliminary draft labeled "for FGG directors only." M2006 found a way to have access to it; however, given the confidential and preliminary nature of the document, we find it highly inappropriate that they would issue public comments about it prior to its passage by the Federation board.


  139. Many of the remarks they make raise exactly the questions the FGG has been debating for years. M2006 isolates one year's list of FGG priorities as though it encompasses the entire vision of the FGG.


  140. In fact, the only thing stopping the Federation from carrying out many of things cited by M2006 — services to LGBT and other sports bodies, support for individual athletes, meeting the needs of elite athletes, to name just three examples — are goals long discussed by the Federation. It is not a lack of vision; it is a lack of money.


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    Goals and Resources — The Worth of the License Fee

  141. Why does the Federation want a license fee? What is important about it?


  142. We would be much farther along the road to achieving many of the goals M2006 raises in its paper had we received our license fees in full going all the way back to New York. Had that been the case, we would have been able to have a staff and establish a permanent office to pursue opportunities. We have not put those goals aside; we have instead learned to focus on making real progress on several realistic goals during a specific timeframe rather than coming up with a long wish list and doing few or none of them well.


  143. Over the twelve years spanning Gay Games IV, V and VI, the FGG has received a total of approximately US $600,000 in license fees. That is only about US $50,000 a year for an organization that, operating frugally, has approximately US $100,000 a year in operating expenses. Without substantial donations from our directors over the years, the activities of the FGG would have been seriously hindered.


  144. Given the well-established positive economic impact of the Gay Games on a local community, license fee money should not be seen as coming from the host organization as the originating source but rather as a tangible gesture towards the continuation of the Gay Games movement from the host city's businesses and other partners who benefit financially before, during and after the week of the Games. Bidding organizations repeatedly tell us they understand the worth and necessity of the license fee for the long term good of the Gay Games. Thus it seems to follow that, upon winning the bid, a host organization should be able to effectively communicate to their sponsors how helping them pay the license fee will reap substantial economic benefit for the community in return.


  145. Montréal 2006 acknowledged just such a point repeatedly in their efforts to win the bid and up until the recent breakdown in our relationship.


  146. It is long acknowledged that sponsors to date have preferred to back a Gay Games host rather than the Federation. There is nothing wrong with that. Possible solutions are to have the Federation share in a percentage of contracts with host sponsors, or receive direct payments in the form of a license fee that is not tied to any one source of income. During the last two bid cycles, reliance upon the license fee for the bulk of Federation income has become an accepted part of bidding organizations' obligations and preferred over a percentage of contract fees.


  147. Still, the Federation's 2003-2004 strategic plan tries to offset the lack of license fee income by looking at many other potential income streams, all of which are simply listed for discussion and are not anywhere close to being passed by the Federation board. Yet M2006 finds ways to criticize this introspection, going on at length as if one item, raising the license fee, is a fait accompli.


  148. These complaints are striking, coming from an organization that waved a check for US$100,000 during its bid presentation, telling the Federation it was ready to pay such an amount that week should the license agreement be signed. It was the Federation's integrity alone that told M2006 this was an inappropriate incentive and no money would be accepted until a license agreement was finally signed.


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    A Host's Self-Interest — Consultation v. Control

  149. M2006's criticism of the Federation's strategic plan must be viewed in context. M2006 is coming from the position of a host that wants unfettered ability to do whatever it wants as long as it has use of the words "Gay Games." By extension, M2006 seeks to protect the rights of future bidding organizations that might want similar freedom to structure an event called "Gay Games" however they see fit.


  150. The public should be aware that certain comments about the Federation's "excessive control" come from people allied with or located in cities that have expressed an interest in hosting the Gay Games. After three competitive bidding cycles, the Federation has learned to put all such comments into perspective.


  151. At any rate, we disagree with M2006's complaints about excessive control, particularly their hyperbole that such control is "destined to fail." M2006 cannot claim this with authority because they never gave the working relationship outlined under the proposed 2006 license agreement a fair chance. As previously stated, the Federation seeks a partnership with its hosts of consultation, not control, similar to the partnership we had with Sydney 2002 in the closing months prior to Gay Games VI. That the Federation-Sydney 2002 partnership still resulted in a financial loss was, as noted by both key Sydney officials and the Federation, Sydney's failure to implement quickly and fully a fallback Plan B budget once it was clear income could not cover all costs. That is not the same as saying "excessive control" caused the problem. If anything, it points to a lack of control.


  152. M2006 writes, "The Federation maintains that it needs to control communication to external parties by approving press releases, website plans, newsletters, etc." M2006 has complained about this repeatedly in public, when in fact this approval right was one of the easiest functioning parts of the relationship between the Federation and Sydney 2002. The Federation approved on a timely basis virtually all Sydney promotional materials and offered corrections for clarity and historical fact. That M2006 has continued to make such process out as onerous is an indication of their lack of commitment to a partnership with the governing body.


  153. M2006's criticisms of Federation interviews with the media are essentially defensive and leave out much about M2006's curious behavior towards its community, government and corporate sponsors. M2006 objected to the Federation's speaking to the media about what we had learned from Sydney, a request we found mind-boggling. M2006 was asking the Gay Games' governing body to be silent about the previous Gay Games' results. M2006 said that the Montréal community did not follow the news from Sydney, that it was only "local" news in Australia, and that open discussion about the problems would only damage their ability to achieve sponsorships. The Federation asked Montréal to consider that such news could not be hidden from their community forever — for one thing, many Montréal citizens had participated in the Gay Games and were well aware of the history; for another, would it not be worse for sponsors to find out about the deficits and then wonder why M2006 had not been open and up front about Gay Games history in the first place?


  154. The Federation nevertheless listened to M2006's concerns and substantially altered a press release originally intended for distribution in March 2003 that discussed Sydney in relation to Montréal. We told M2006 that afterwards we would not seek out press but, should the press contact us, we would answer their questions openly and honestly. M2006 has singled out and criticized Federation representatives by name for doing exactly that.


  155. What M2006 fails to mention is that their own representatives continued to speak openly to local media about wanting to produce their initial bid plans after having told the Federation they were committed to downscaling the 2006 budget. As written above,they also wrongly claimed the Federation first revealed negotiation details to the media. Our practice since our pledge to them last March has been to reply to press inquiries to clarify our true positions and offer minimal or no details about things that were not already on public record. This is clearly not the case with M2006. The irony is that, after behaving fearful of candid and honest assessments appearing in the press, they wound up bringing about so much negative publicity themselves by impulsively unleashing their 17 October 2003 media advisory.< No amount of subsequent media spin that they were being "pro-active" changes that fact.


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    Comments about the FGG Board structure

  156. M2006's criticisms about the Federation board's structure and practices reveal a lack of history about the Federation and the LGBT sports movement. They ask questions that already have answers, such as "Why have all past host city organizations declined to become active members of the FGG after having hosted the Games? (with the exception of San Francisco)." In fact, early on the Federation automatically accepted host city organizations onto our board, giving each group four votes each and a total membership period of up to 12 years. This was designed so that host organizations would provide their expertise on the governing body's board.


  157. This well-intentioned plan did not work in practice. Host organization boards have always dissolved once their Gay Games end, yet individuals would come to Federation meetings claiming still to represent the viewpoints of New York in '94 or Stichting '98. After years of trying unsuccessfully to make the host organization position on the board work, the Federation determined that the appropriate role for such former host representatives, should they be interested, was as Individual Directors on our board after the conclusion of their Gay Games.


  158. For the record, Team San Francisco, Team Vancouver and Team Sydney, all current members of the Federation board, are separate organizations with distinct mission statements and are not direct continuations of the bodies that supervised the Gay Games in their cities.


  159. The question about proportional representation according to organization size? Again, this is a topic long discussed with no one solution that meets all needs. The Federation began as a collection of individuals and over time the proportion of majority votes within the board has shifted to the Director Organizations. In fact, just three years ago the board voted to increase the number of votes by Director Organizations from one to two each. Montréal 2006 has criticized Individual Directors on the Federation board as acting only in their own self interest; the proposal to give more power to Director Organizations was overwhelmingly supported by Individual Directors as well.


  160. Another M2006 criticism that lacks historical perspective is that the Federation focuses on "process, rank and file obedience and loyalty but lack[s] introspection, innovation and freedom of expression." Federation history is rife with unfettered freedom of expression, whereby people would seize the microphone and expound about all manner of personal interests that, in the end, did little to advance the work and business of managing the Gay Games event. Over time, the Federation has implemented meeting rules to help the general sessions move ahead as expeditiously as possible; ideally, the place for most free discussion is within various Federation committees.


  161. It is another odd criticism — M2006 suggests that the Federation lacks business acumen yet complains about the policies and procedures that the Federation has put in place specifically to comply with acknowledged best practices of nonprofit corporations worldwide.


  162. The comment about lacking innovation? Federation participants have repeatedly told us they are tired of the innovations foisted on the Gay Games by past hosts. They want the hosts to concentrate on running the sports well, a goal hitherto unmet to all participants' satisfaction. That the Federation has actually been trying to respect the opinions of participants and ensure that the major aim of the Gay Games is done right and done well in the face of intransigent or overextended hosts is something we believe simply must be done. We do not believe our structure precludes us from having a productive relationship with Gay Games host organizations. In the current instance, we believe the lack of true commitment to a partnership with the Federation and residual disgruntlement manifests itself in M2006's comments like this.


  163. Overall, M2006's comments about the strategic plan are welcome — they give the Federation a snapshot of issues that people without a full sense of history might share, and we can certainly address that by making more historical documents available to the public. However, many of the questions are not really criticisms of the plan as much as an attempt to set up M2006 as more astute than organizations such as IGLA, International Front Runners, IGBO, Équipe Paris, or the many other organizations on the Federation board that for years have been pondering such questions about the future of the LGBT sports movement.


    164. *   *   *   *   *

  164. This brings to a conclusion our comments here about the unfortunate circumstances leading to the dissolution of the relationship between the Federation of Gay Games and Montréal 2006. We now turn our attention to the future, and express our heartfelt feelings towards the many people unintentionally caught in the middle.


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    The FGG and the Montréal community

  165. In October 2001, the Federation board selected Montréal as the prospective host city of Gay Games VII with an overwhelming majority on the first ballot. The Federation was convinced that the city and its incredibly generous community would be perfect to host our event.


  166. Today, Federation directors are heartbroken to deprive this wonderful community from hosting an event called the Gay Games. Unfortunately, the vision, the ideals, the goals, the methods and priorities of some of the M2006 leaders were so different, so far apart from those of the Federation and the Gay Games movement, that the Federation could not in good faith designate Montréal 2006 as a Gay Games host without a robust contract that would provide a legal framework to safeguard the values that constitute the heart and soul of our event. We are sorry that such a contract was not acceptable to Montréal 2006.


  167. The FGG is conscious that, due to M2006's campaign misrepresenting some FGG positions, a lot of damage — some of which will probably be impossible to undo — has been done to the Federation's reputation in Montréal and possibly in other places in Canada and, indeed, the world.


  168. The Federation is saddened by this wedge between our organization and parts of our constituency, but we remain committed to answer with honesty, openness and candor any polite inquiries from members of the Montréal community, as well as from any other community, who would be genuinely interested in hearing the FGG's side of the story.


    169. Moving forward

  169. After two years of negotiations, the Federation is now moving forward to investigate other possibilities to host Gay Games VII in 2006. Contacts with the other three finalists (Atlanta, Chicago and Los Angeles) were made during the 2003 annual meeting and the FGG Site Selection committee was charged with finalizing a contingency plan outlining a quick but informed process for the selection.


  170. Atlanta, oddly and to our disappointment, asked to be designated automatically as the host due to having finished second in the October 2001 balloting (as announced, the one-ballot result was Montréal 31, Atlanta 11, Chicago 7, Los Angeles 1). The Federation said a second ballot was called for — the second place vote count was not sufficiently high and we do not know how those who selected Montréal might have voted for a second choice. Within several days, Atlanta announced it would not compete again to host Gay Games VII.


  171. The Federation is extremely grateful that representatives of the Atlanta, Chicago and Los Angeles bid committees were in Chicago for our annual meeting. Chicago and Los Angeles are now investigating the feasibility of organizing the Gay Games in such a short timeframe. We believe it is challenging but not impossible — people who have been through it know that the major work of organizing a Gay Games comes in the two-year period beforehand.


  172. Regardless, our entire community should be grateful to these city groups for being ready to offer their services for the continuation of the Gay Games movement. We wish them well for the upcoming site selection process. We urge the entire community not only to show them your gratitude during the bidding process but your support to the selected host once it has been determined.


  173. We are also encouraged that several other cities have written the FGG by stating their willingness to host our event as a back-up plan. Currently, the Federation board believes it is in the best interest of the movement to investigate only the most realistic options at this time, represented by the organizations who have already done a lot of preliminary preparations by completing the previous bidding process in good faith for Gay Games VII.


  174. Although the Gay Games originated in the United States, the Federation has always had as a key goal the expansion and internationalization of the Gay Games movement. For example, predictions that the FGG would elect to return to North America following Amsterdam proved untrue by the selection of Sydney. Apart from the Gay Games, the Federation has held meetings twice in Vancouver, twice in Sydney, and once each in Amsterdam, Berlin, Johannesburg and Montréal. Holding the Games in a non English speaking and multicultural city like Montréal would certainly have assisted us in further internationalizing the movement.


  175. However, while the two current potential candidates for Gay Games VII are U.S. cities, both are outstanding metropolitan areas with significant immigrant populations and much to offer in the way of reaching new constituents to further the Gay Games' goals. With the support of the Gay Games community worldwide, we are sure either city will endeavor its best to assist the Federation in the globalization of our event.


  176. With this, we come to the end of our reflections on recent events. We appreciate your consideration of our viewpoints, and we would be happy to hear from you regarding your thoughts. Please eMail us at info@gaygames.org with "COMMENTS" in the Subject Line.


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Sincerely yours,

The Executive Committee and the Montréal Liaison Task Force,
on behalf of the Federation of Gay Games