America's Cup: Irish slap €200 million (NZD342million) price tag on Cup hosting
by Richard Gladwell/Sail-World.com/nz 20 Aug 2021 01:38 UTC
20 August 2021
Have Emirates Team NZ bid Haere Ra to Auckland for the 37th Defence © Richard Gladwell / Sail-World.com / nz
Irish media are reporting that an America's Cup hosting would cost more than €200 million (NZD342million) if the Emerald Isle is successful in its bid to host the 37th America's Cup Regattas.
“The host country is essentially liable to cover the cost of hosting the event. The case needs to be very strong and robust and has to stand up to independent scrutiny,” said a Government source familiar with the project, in a report in the Irish Times.
Cork Harbour is one of the shortlisted venues along with Valencia, Spain and maybe a wild card venue. Emirates Team New Zealand will not release a list of the venues which were cut from 35 reported elsewhere, to just three around three weeks ago.
The Irish cost estimate is not dis-similar to the reported cost for New Zealand in the 36th America's Cup, where Government and Council officials decided to dump all the infrastructure cost and redevelopment of run-down waterfront areas into the "cost" of the 36th America's Cup. It is assumed that the same flawed accounting model, of adding infrastructure asset costs to the event cost, has been used in the Irish assessment.
The Auckland "America's Cup costs" cited by media, Auckland Council and NZ Govt cost included wharf repairs, land decontamination, and stormwater replacement/extension with a lot of planned public works brought forward for the America's Cup.
For the next America's Cup, the New Zealand Government offered a reported NZD$99million package which included NZD$30-40million for the Hosting Fee, and with the balance being made up of so-called "value in kind". Aside from charging rental on the ETNZ base of NZD$3.5-$4million per year, the details have never been specified. The offer, made after a three month exclusive negotiation period, was not accepted by the Cup rights holders, and the process was opened up to international bids.
Auckland's Mayor claimed the America's Cup champions wanted $NZD200million to keep the Cup in Auckland, but it was not clear if conventional accounting methods had been used in this assertion by His Worship.
"A Cabinet decision on whether to proceed with a final bid will depend on the overall cost of doing so. The [Irish]Coalition is said to have an open mind.
Although Minister for Foreign Affairs Simon Coveney has championed the America’s Cup project, the question of the State assuming a heavy financial burden to host the sailing contest is under close scrutiny in the Government given the pressures dealing with the Covid-19 pandemic are putting on the public finances," says the Irish Times.
The real cost of hosting the 36th America's Cup is estimated at $NZD40million paid by the New Zealand Government to America's Cup organisers, along with a similar amount America's Cup Events Ltd raised via sponsorship to cover all event costs.
Any new Cup venue, with the possible exception of Valencia will have to invest in waterfront re-development, using derelict land, to develop a Cup venue. Fremantle, Valencia, Auckland and Bermuda are the only venues to have developed new facilities since the 1987 America's Cup, with the San Francisco and San Diego events using existing docks and marina space.
The bid evaluation is being under taken by the America's Cup holders in conjunction, with UK based Origin Sports consultancy.
The Irish Times says that the CEO of Origin Sports Stewart Hosford is originally from Cork. The paper claims that Hosford knows the lead Irish Minister for the Irish America's Cup bid, Minister for Foreign Affairs, Simon Coveney, on a personal basis.
"The Irish Government Economic and Evaluation Service, which conducts value for money analysis on policy, is also set to look at the proposal," reports the Irish Times.
"That work is ongoing. But an informed Government source said “very preliminary assessments” suggest the State could be on the hook for more than €200 million to cover capital expenditure on infrastructure and race running costs."
"A Government spokesman would neither confirm nor deny that such figures were under discussion."
While Emirates Team New Zealand CEO Grant Dalton said in a recent statement that there was a "slim chance" of the 37th America's Cup being hosted in NZ, that is believed to be an over-statement of the situation.
A key part of any America's Cup will be an "open-borders" policy being in place for the venue, which is expected to rule out New Zealand, which along with Australia, has a policy of managing COVID by lockdown. That strategy along with requirements which amounted to a deterrent to 170 superyachts registered to enter New Zealand for the 36th America's Cup are effectively the final nail in the coffin of New Zealand's AC37 hosting prospects.
All international visitors who were not returning NZ passport holders, were banned from entering NZ for the America's Cup, which concluded on March 17, 2021.
Those moves by the New Zealand Government stymied any potential economic return for Auckland and New Zealand.
Last week Amazon pulled the pin on a multi-series production of Lord of the Rings in New Zealand, relocating to UK. Insiders claimed the difficulty in getting people associated with the production, through the tight immigration net into NZ was a major factor in the decision to pull out despite 25% production incentives given by the NZ Government. Tourists are currently banned from entering NZ.
A final decision on the 37th America's venue is expected in three weeks, on September 17 (NZT), a date that is expected to be met.