What’s the America’s Cup worth to New Zealand? It’s a question that has to be asked from time to time, given the investment in the America’s Cup by the New Zealand government, and while the television audience for the Cup may be only about half of the number that is expected to watch the Rugby World Cup to be staged in Auckland in September there is a desire for governments to invest in sailing events for reasons from tourism to marine infrastructure to national pride.
The America’s Cup has the potential to be bigger than the Rugby World Cup, with countries like Korea and China having a better chance of winning the America’s Cup than the World Cup of Rugby any time soon, but whenever there is government money involved, such investment becomes politicial, especially when a country with limited population and resources has to find the money to pay for things like the rebuilding of Christchurch.
New Zealand’s Acting Economic Development Minister David Carter has reconfirmed government support for Emirates Team New Zealand’s entry into the 2013 America’s Cup in San Francisco, but it is uncertain if this would be the case, had the funding not been guaranteed by a contract signed by the previous government. Under a commitment made in 2007, the NZ government is contracted to contribute up to $36 million to support Team New Zealand’s America’s Cup bid.
Mr Carter is quoted as saying:
“The funding has the potential to generate significant economic benefits for New Zealand, in particular for our world-class marine industry. With the eyes of the world on San Francisco in 2013, we will use the America’s Cup to our full advantage by showcasing New Zealand’s technology, products and services, and encouraging tourism. In the current economic climate, it is important that maximum benefit is gained from this significant investment of taxpayer money, and the Government’s expectations in this regard are clear.”
An independent economic impact assessment of the 2007 campaign showed a direct economic benefit to New Zealand of $74.4m. The funding also retains up to 100 highly skilled specialists in New Zealand, including yachtsmen, designers and engineers.
As Core Builders Composites, Ltd – the Auckland based manufacturer of the AC45, has increased the price of the catamaran to €695,000 (US$1 million), you would think that the NZ marine economy might be getting a nice little dividend, however the company is a wholly owned subsidiarity of Oracle Racing. In fact, the company was incorporated in 2000 as Oracle Racing Ltd and the name wasn’t changed until October 2010. So while there might be jobs being created and some hotel rooms being occupied by America’s Cup sailors as they train, it’s not known how much economic benefit will go to the New Zealand economy.
Nevertheless, Emirates Team New Zealand, who officially announced their entry into the next edition of the America’s Cup, has welcomed the Government’s intention to honor the contract.
Emirates Team New Zealand CEO Grant Dalton said:
“The Government’s contribution allows us to be competitive on the world stage. We are very much the arrowhead of a major New Zealand export industry and we take pride in showcasing the New Zealand brand, skills and expertise across the major yachting regattas of the world. The pinnacle for us will be to bring the America’s Cup home and with New Zealand’s support behind us, we plan to do just that.”