TV viewers tune in to America’s Cup but jury out on finances

By Ronnie Cohen, Reuters
Televised coverage of turbocharged 72-foot catamarans vying for the 34th America’s Cup has changed the channel from boring to thrilling on yacht racing.

At least 1 million U.S. viewers tuned in for the opening races when Emirates Team New Zealand took on Oracle Team USA earlier this month. The number surpassed expectations but still pales in comparison to mainstream sports.

The event was custom-made for television. The scenic backdrop of San Francisco Bay and high-speed racing in close quarters succeeded in drawing spectators. But questions remain about whether the event was worth the cost to sponsors and the city.

Scott MacLeod, a WSM Communications sports marketing agent who works with America’s Cup teams and sponsors, said the Nielsen ratings for the matches between the government-backed Kiwis and software billionaire Larry Ellison’s Oracle were good but not high enough to entice sponsors to put up enough money for teams enter such an expensive event.

MacLeod is not convinced of the long-term economic viability of televising the competition for the world’s oldest sporting trophy. “If they want to make it more commercially viable, they’ve got to cut the cost,” MacLeod told Reuters.

The money problem has plagued the event, the brainchild of Oracle co-founder Ellison, since its inception. Building, maintaining and manning the technologically advanced yachts costs between $100 million and $200 million – far more than the net gain from the Cup’s peak audience of one million.

“At the current ratings, you can’t sell enough sponsorship to offset that cost,” MacLeod said.

He compared the economics to auto racing. A typical NASCAR entry costs $25 million and can be expected to bring in 7 to 8 million viewers per race.

“You tell me which offers the better value,” MacLeod said.

He said golf would provide the same kind of well-heeled audience as yacht racing. “Golf does three times the audience. It does seven times the audience when Tiger Woods plays.”

One million viewers tuned into NBC in the United States alone on September 7 and 8, the first two days of the America’s Cup finals, said network spokesman Alex Rozis. The audience dropped to 110,000 when the broadcast moved, as planned, to subscriber-based NBCSN last week, but it more than doubled to 250,000 average viewers on Saturday and 240,000 on Sunday. – Read on