U.S. OLYMPIC FESTIVAL LOS ANGELES 1991 : On Reflection, L.A. Wasn’t the Place : Olympic Festival: Organizers predict that the event could lose $2 million. Attendance was the lowest in 10 years.

To those who wondered whether the U.S. Olympic Festival would play in Los Angeles, the answer was written in red ink.

The extent of the losses became apparent during Sunday’s final news conference at a downtown hotel. Elizabeth Primrose-Smith, the executive director of the local organizing committee, announced that the event would lose as much as $2 million and said the 10-day Festival, which ended Sunday, drew an attendance of 200,000, the lowest in 10 years.

“In a market of this size, with the amount of promotion that we put out there, I would be Pollyanna to say that we weren’t disappointed,” she said.

Harry Usher, chairman of the organizing committee’s board of directors, added: “By every measure, this Festival was a success, with one exception--the amount of spectators. In terms of getting fannies in seats, we did not succeed.”

Their comments were in stark contrast to the optimism expressed by the L.A. bid committee when it was awarded the Festival by the U.S. Olympic Committee in 1987. A major selling point of that bid was the organizers’ offer to return profits to the USOC. As recently as the middle of last week, Primrose-Smith predicted that the event would break even.

But, in reality, the organizers are faced with a financial disaster. Earlier this month, the USOC joined with two of the organizers’ major sponsors, the Amateur Athletic Foundation and ARCO, to loan the Festival $1 million to meet its early bills.

Primrose-Smith, who inherited a $100,000 deficit from her predecessor when she took the job two years ago, said that she did not want to speculate as to how the losses would be covered. She said that when a final accounting is made several weeks from now, the Festival’s board of directors will formulate a plan. One possibility, she said, is to file for bankruptcy.

While disappointed with the poor attendance, USOC officials attempted to shift the focus to “the unique multicultural experience” for the Festival’s 3,600 athletes and coaches.

“The venues were first-class,” USOC Executive Director Harvey Schiller said. “We had no problem with transportation, housing, practice times, the weather. Everything seemed to come together.”

Although the operational aspects of the Festival were efficient, the lasting impression is one of empty seats. It is an issue that has plagued Festival officials since the early days, when they at first claimed to not have exact crowd counts, then admitted that they did but had failed to release them.

Upon the USOC’s intervention, the organizing committee began releasing estimates three days into the Festival.

Since then, organizers have been sensitive to suggestions that attendance would be dismal, especially after last year’s Festival at Minneapolis-St. Paul set a record of 503,769. The last time a Festival drew fewer than 200,000 was at Syracuse in 1981, the third time the Festival was held.

And, while USOC officials on Sunday handed out two pages of quotations filled with athletes discussing their enjoyment of the Festival, some didn’t have such a good time.

Athletes complained that they were virtually confined to their rooms on the USC campus, where they were cautioned not to leave because of potential gang violence. Athletes housed at UCLA also were warned not to leave campus last Friday night, when the controversial movie, “Boyz-N-The Hood,” opened.

Athletes housed at USC, UCLA and Loyola Marymount complained that, because transportation was not provided due to the organizers’ budget problems, they were unable to attend other sports as they have done at past Festivals.

There were also complaints that have become familiar to Angelenos concerning traffic, smog and high prices, raising questions about whether the Festival should be held in large cities.

“I firmly believe that the Festival should go to areas where there aren’t an abundance of professional (sports) activities, traffic and hotel rip-offs,” said Bill Wall, executive director of USA Basketball. “It should be in an atmosphere where it’s conducive for kids to go from one venue to another.”

Jack Kelly, who served as executive director of Festivals in Houston and Minneapolis-St. Paul and who now runs the Goodwill Games, said that he believes the event belongs in cities of more than one million in population but not in New York, Los Angeles or Chicago.

Following a year off for the Winter and Summer Olympics, the next Festival will be held in 1993 at San Antonio, which has a metropolitan area of 1.1 million. Organizers there said they already are confident of their success. As an example, they point out that the 1989 Junior Olympics in San Antonio resulted in 310,000 tickets sold and a $271,000 profit.

“We could sell tickets tomorrow,” San Antonio Festival President Robert Marbut said. “That’s our strength.”

Kelly suggested that the L.A. organizers’ market strategy was a mistake.

“There was a feeling that L.A. is a last-minute town,” Kelly said. “(They claimed) that there was no reason or advantage to investing money in marketing early in the game because it wouldn’t pay off. Now, they are saying that people didn’t know what the event was. (They say) that’s the reason people aren’t buying tickets. Maybe we should have had a stronger marketing job over the last 12 months.”

USOC officials said that they offered marketing suggestions to the organizers, many of whom were active with the Los Angeles Olympic Organizing Committee in 1984. But Jeff Cravens, a USOC press officer, said that they were told, “We know what we’re doing; we’ve done this before.”

Usher said that one-third, nearly $5 million, of the organizing committee’s budget was spent on advertising and marketing.

He cited an array of factors that had changed from the time of the bid, all of which he said had an impact on the Festival--the recession, the Gulf War, demographic changes in Los Angeles, ESPN’s expanded baseball coverage that limited television coverage and the decline in recent years in the number of name athletes who compete in the event.

“I suspect the athletes you do see here will become the (Olympic) stars for 1996,” Usher said. “But that isn’t, in this city, the way in which you get people to come out.”

Primrose-Smith cited the high cost of doing business in Los Angeles.

Compared to last year in Minneapolis-St. Paul, she said that the costs for venues was 135% higher, housing was 41% higher, transportation was 100% higher and general operations were 30% higher.

The organizing committee likely would have have incurred even more costs had it included all 37 sports that usually are part of the Festival program. The decision was made last winter to move the Festival’s ice hockey competition to St. Cloud, Minn., which has two Olympic-size rinks. Primrose-Smith said that the cost of renting the Forum or the Sports Arena, the only two L.A.-area venues acceptable to the USA Hockey federation, would have included $50,000 for a supplemental generator in addition to rent.

“I don’t think there is any other way we could have done it,” she said. “We controlled the expenses that we could. We are very hopeful that everyone will get paid.”

How remains unclear.

Schiller was questioned repeatedly by reporters Sunday about whether the USOC would forgive its $300,000 loan to the organizers. He said the matter would be referred to the USOC board of directors.

The USOC has a policy that Festivals be self-supporting. Still, there is a precedent for the USOC to forgive loans. The 1987 Pan American Games in Indianapolis received an $800,000 loan from the USOC, which eventually forgave $300,000 of the debt.

Anita DeFrantz, a member of the USOC Board of Directors and the president of the Amateur Athletic Foundation, called the AAF’s loan “an investment in sport.” Asked Sunday whether she expected the debt to be repaid, she said: “As a foundation, you are expected to take risks. This was an investment, a risky investment, but only in retrospect.”

Not only has the AAF, which was created with $80 million from the LAOOC’s profits from the 1984 Summer Games, loaned the Festival organizers $600,000, but it also paid $450,000 to the event to become a Gold Patron sponsor.

“We are hopeful that when everything settles out over the next couple of weeks . . . we are hopeful everyone will get paid,” Primrose-Smith said.

Despite the financial problems, Usher seemed proud of the organizing committee’s efforts.

He praised Primrose-Smith for organizing “the most outstanding, smoothest, well-organized mass athletic event that has ever been staged anywhere.”