America’s Cup: Selling the cart without the horse

by Craig Leweck, Scuttlebutt Sailing News
When the fabulous finale of the 34th America’s Cup took place in September 2013, it erased the memory of all the bumps and bruises that occurred along the way. The one aspect of the event that could not be scripted – an unprecedented comeback – arguably saved the event.

Regardless of the reason, the ending helped to validate what was good about the event. It gave the America’s Cup an opportunity to move forward, make slight adjustments, and allow for the 35th edition even better.

But as we are now, nearly 8 months later, very little has been revealed. Both the defender and challenger of record infer big changes. There is much talk about improving the economics of the event. “Sports that don’t make money are just hobbies for rich guys,” explained defense owner Larry Ellison.

Instead of leveraging the momentum of the 34th America’s Cup, the delay has erased it. Finding the venue, and the sponsors, is taking time. Eager to attract more challengers, prospective teams are unable to plan… without a plan. The tick of the clock is nobody’s friend.

Big sporting events require political support, so it should be no surprise that the America’s Cup has become political. After San Francisco’s Democratic Mayor Gavin Newsom helped to secure the event in 2010 (and immediately left town to be Lieutenant Governor in Sacramento), it is now the Republican Caucus of the California State Senate that is noting the shortcomings from the 2013 edition.

A summary of their report: Golden Gate Yacht Club over-promised and under-delivered.

Here are a few excerpts:
• Because both the America’s Cup Organizing Committee’s fundraising and tax revenues generated by the America’s Cup events fell short of the original projections, the City’s General Fund incurred net costs of nearly $6.0 million and the Port incurred net costs of nearly $5.5 million, totaling nearly $11.5 million. Moreover, according to the Budget and Legislative Analyst’s Office, it would appear that San Francisco also failed to meet expectations of job creation and small business involvement.

• San Francisco’s potential opportunity to host the event in 2017 may already be D.O.A. America’s Cup officials are unhappy that San Francisco officials aren’t willing to offer the same terms as last year which included free rent for piers as well as police, fire and other services. Moreover, Cup officials also are opposed to paying the equivalent of union wages for construction work.

• While the yachting world eagerly awaits Ellison’s announcement, one thing is for certain. Don’t discount the possibility of supporters once again touting economic miracles and looking for legislative assistance to help them deliver on promises that can’t be kept.

The challenge for the Golden Gate Yacht Club is they want to improve the economics of the event, but they are once again selling only a vision to venues, sponsors, and broadcasters. How hard is it to sell a cart without the horse? Standing by…