America’s Cup: Gamble or investment?
Published on October 20th, 2020
The commercialization of the America’s Cup has not been easy on host cities as they assess the value of the event versus the investment to host. And in fairness to New Zealand, anticipating a pandemic likely wasn’t in their calculations, but it might not have mattered according to this story in Newshub:
The 36th America’s Cup was predicted to bring in $1 billion to our economy, but there’s a fear the $250 million funded won’t pay off. The Government and Auckland Council committed to spending the money in July, but economists are now saying this amount of money “shouldn’t have been funded”.
The marine, hospitality and tourism sectors were all set to benefit massively from the event with the country flooded with uber-wealthy jet-setters. But with COVID-19, there’s now a lack of superyachts and international tourists.
“It was always nonsense to fund it, it shouldn’t have been funded,” NZ Initiative chief economist Dr Eric Crampton tells Newshub. “It shouldn’t have been continued – now because of COVID, it’s worse than we were expecting.
In 2017, the Ministry of Business, Innovation and Employment predicted the event would bring in $1 billion to the economy.
“The case for these events have never made a lot of sense,” Crampton says. “It’s similar to the economics of hosting the Olympics. Everybody always figures there will be huge benefits that come with it, then they’re left with white elephant facilities and cost overruns.”
This is due to several factors. There are only three challengers – INEOS Team UK, American Magic, and Italy’s Luna Rossa – after several pulled out.
With the borders closed, superyachts and their billionaire owners are no longer able to enter the country. At least 160 were due to sail here – now, less than 30 are expected. The Youth America’s Cup, with 20 teams competing, has also been cancelled, as immigration won’t let the international teams into the country.
Destination Auckland general manager Steve Armitage remains optimistic.
“We think the returns will be there, it’ll just be a longer burn,” he says. “It’s not necessarily the sweet sugar hit you get from delivering the event in the moment – it’s creating that space in people’s minds through the events and broadcasting that to the world.”
While significant money is being spent on the broadcast tools, who is going to watch beyond New Zealand? For the three countries competing, their regions are not well timed for viewing: London, Great Britain (3:00 am), Cagliari, Italy (4:00 am), and Newport, USA (10:00 pm).
And if they do watch, what will they see? The one thing you can never guarantee in sport is close competition, and as it is the first iteration of the AC75 Class Rule, banking on another storybook ending that 2013 enjoyed is a gamble, not an investment.
36th America’s Cup
In addition to Challenges from Italy, USA, and Great Britain that were accepted during the initial entry period (January 1 to June 30, 2018), eight additional Notices of Challenge were received by the late entry deadline on November 30, 2018. Of those eight submittals, entries from Malta, USA, and the Netherlands were also accepted. Here’s the list:
• Emirates Team New Zealand (NZL)
• Luna Rossa (ITA) – Challenger of Record
• American Magic (USA)
• INEOS Team UK (GBR)
• Malta Altus Challenge (MLT) – WITHDRAWN
• Stars + Stripes Team USA (USA)
• DutchSail (NED) – WITHDRAWN
Of the three late entries, only Stars+Stripes USA remains committed, however, it is unclear what entry payments have been made, nor is there knowledge of a boat being actively built or sailing team assembled.
Key America’s Cup dates:
✔ September 28, 2017: 36th America’s Cup Protocol released
✔ November 30, 2017: AC75 Class concepts released to key stakeholders
✔ January 1, 2018: Entries for Challengers open
✔ March 31, 2018: AC75 Class Rule published
✔ June 30, 2018: Entries for Challengers close
✔ August 31, 2018: Location of the America’s Cup Match and The PRADA Cup confirmed
✔ August 31, 2018: Specific race course area confirmed
✔ November 30, 2018: Late entries deadline
✔ March 31, 2019: Boat 1 can be launched (DELAYED)
✔ 2nd half of 2019: 2 x America’s Cup World Series events (CANCELLED)
✔ October 1, 2019: US$1million late entry fee deadline (NOT KNOWN)
✔ February 1, 2020: Boat 2 can be launched (DELAYED)
✔ April 23-26, 2020: First (1/3) America’s Cup World Series event in Cagliari, Sardinia (CANCELLED)
✔ June 4-7, 2020: Second (2/3) America’s Cup World Series event in Portsmouth, England (CANCELLED)
• December 17-20, 2020: Third (3/3) America’s Cup World Series event in Auckland, New Zealand
• January 15-February 22, 2021: The PRADA Cup Challenger Selection Series
• March 6-15, 2021: The America’s Cup Match
Youth America’s Cup Competition (CANCELLED)
• February 18-23, 2021
• March 1-5, 2021
• March 8-12, 2021
AC75 launch dates:
September 6, 2019 – Emirates Team New Zealand (NZL), Boat 1
September 10, 2019 – American Magic (USA), Boat 1; actual launch date earlier but not released
October 2, 2019 – Luna Rossa (ITA), Boat 1
October 4, 2019 – INEOS Team UK (GBR), Boat 1
October 16, 2020 – American Magic (USA), Boat 2
October 17, 2020 – INEOS Team UK (GBR), Boat 2
October 20, 2020 – Luna Rossa (ITA), Boat 2