Cup Spy: Is the America's Cup headed to an offshore Never-Land?

by Richard Gladwell/Sail-World NZ 30 Mar 10:04 UTC

The announcement of the signing of a host venue agreement for an Auckland stopover in The Ocean Race appears to have kiboshed any chance of Auckland hosting the 38th America's Cup.

The stopover date - March 2027—directly overlays the projected date for a Cup Defence in Auckland - double-booking the space.

It is hard to see how the two events could be run properly out of the same venue, and it is hard to believe that the action was not deliberate.

An America's Cup spoor trail of governmental droppings and footprints indicates that despite Auckland Council's best efforts to secure the Hosting, the event is again headed to the Never-Land of an offshore location.

Back in October 2024, just after Emirates Team New Zealand defended the America's Cup for the third successive time, there was enthusiastic support from the Leader of the Opposition, Chris Hipkins, and the former Prime Minister, Helen Clark, for NZ hosting the 38th America's Cup.

"Anyone who spent time down the viaduct during the hosting of last America's Cup will see the huge economic flow that comes from that," Hipkins told Stuff in an interview when the Kiwis were ahead by four wins in the 37th Amrica's Cup Match in Barcelona. "It's a great event for New Zealand. I'd love to see it hosted in New Zealand again", he added.

Clark is also a Patron of Emirates Team New Zealand and has been a long-standing supporter of the team - going back two decades when the Kiwis America's Cup team was picking itself off the ropes after the ignominy of the 2003 capitulation to Alinghi.

Clark told long-time Cup reporter Todd Niall in Barcelona that she did not accept that politically, it would be difficult today to justify public money for a hosting bid.

"You have to put the economic case, and that's the benefit to New Zealand," she said.

"When I went as PM to Valencia, we'd funded that bid very substantially. The companies were there, and the New Zealand Trade and Enterprise functions were all over it, as a government with an advantage for New Zealand," she said.

"My view was the last government should have done better, and obviously, any government of New Zealand should be stumping up for the incredible profile this gives."

"If New Zealand stuffs around and thinks 'on the one hand this and the other side that', forget it," Clark said in reference to Auckland hosting the 2027 America's Cup.

Her words were prescient as a few days later, after the Cup was won, Wellington and the new Cup champions dickered via the media as to who would be first to pick up the phone to talk about Hosting the other.

Since the expressions of interest in Cup Hosting began flowing into the Team HQ on the border of the purpose-built 2021 America's Cup facilities, the ETNZ CEO has made at least two trips offshore to talk to potential venues. In the past, these expeditions have involved meetings at the top political level.

While Winston Peters, the current Coalition Government's feisty deputy prime minister, and much-travelled Foreign Minister, has not commented specifically on hosting the America's Cup, you would not die wondering about his thoughts on the attraction of major events to New Zealand, and his low opinion of Wellington's panjandrums.

"New Zealand has recently lost the hosting rights of some major international sporting events including the America's Cup, the Rugby Championship, Netball World Cup, and the Wellington Sevens," he said in a media release in March 2024.

"We are now at a huge risk of losing SailGP as well. And it won't stop there. The recent issues with SailGP have spot-lighted the overly influential bureaucratic processes, power-drunk government departments, and some decision-makers who clearly care more about their fiefdoms than our country's economic development and international reputation. These groups do nothing but stymie any sort of future prosperity for our country and ignorantly sabotage our economy and our future on the international stage."

In 2005, the Clark-led Labour Government implemented a two-cycle support program for ETNZ's subsequent two America's Cup campaigns, totalling almost NZ$70million. This program got the team into the America's Cup Matches for Valencia and San Francisco and set the scene for the first of a now three-win cycle. According to NZ government-published reports, the investment returned nearly $160million, and San Francisco's proximity to Silicon Valley created opportunities for 212 Kiwi companies.

Bermuda was not a major market for New Zealand in the 2017 Cup, and there was no Government backing for the team or business initiatives. Instead, the Government of Bermuda, as should NZ a decade later, invested heavily in the event to lift Bermuda's profile as a tourist destination.

Over the past two decades, politicians of both red and blue hues have made investments in the America's Cup campaigns.

While the then-National Government's interest was low in Bermuda, a novel plan for the America's Cup Qualifiers to be hosted in Auckland did attract their backing for a two-week Qualifier event reported to be in the range of $5-$10 million. A similar amount was pumped into the two Louis Vuitton Cups staged in Auckland in 2009-10.

On their return from San Francisco in 2013, the team was surprised to hear then Minister of Trade and Industry Stephen Joyce offer an unsought $5million to help keep Team New Zealand on its financial feet, and ward off the talent scouts. The commitment was quickly tagged with conditions relating to team management and the team needing to raise financial backing on a 1:1 basis. The team soon announced it had secured independent funding on a 2:1 basis, giving an initial war chest of $15million for the Bermuda Cup.

Following that win in June 2017 there followed a standoff between the America's Cup team, the Auckland Council, and Wellington over the 2021 Cup hosting arrangements for Auckland. The final plan followed after several leaked variants, and it was only finally signed off when ETNZ CEO Grant Dalton was in Italy set to announce that the Italians, as the named alternative venue, would take over the 2021 Hosting.

An Appointment agreement for the 2021 Cup hosting, including the development and location of facilities, was signed on March 26, 2018, and the full deal took another year to negotiate. Both were signed between America's Cup Events and ETNZ, as Event organisers on the one hand, and the now Ministry of Business, Innovation and Employment (MBIE) and Auckland Council, on the other, as Event Funders.

In that period, now seven years ago, after a protracted back and forth - often with print media being used as a conduit, the relationship between the America's Cup team and Wellington, where the Public Service arm of the NZ Government is headquartered, appeared to have broken down.

That standoff was perpetuated in Barcelona, where there was no MBIE-backed presence for New Zealand industry in a venue that offered the same opportunities as Valencia and San Francisco.

It was a baffling decision to pass up a crown-jewel opportunity for a small country that had not recovered from the protracted lockdowns, tourist embargoes, two years of recession, negative growth, falling employment, record company failure, and with a desperate need for an increase in exports.

While Auckland Council have moved on from the events leading into the 2021 America's Cup, led by a new Mayor who is an enthusiastic sailor, it would seem that Wellington has not.

Earlier this month, following the publication of the University of Barcelona's independent post-event measurement report, the New Zealand Coalition Govt's Minister of Sport, Mark Mitchell, was interviewed "on the Tiles" (as the informal media zone in NZ Parliament is known) and appeared to be wrong-footed by questioning as to progress on Auckland hosting of AC38.

His response about doing a feasibility study came across as a kick for touch from the Minister. Even so, it is not credible that almost five months after the Kiwi team had won the Cup for the third time, that Wellington had not yet made a decision on the findings of a claimed feasibility study underway into the possibility of making a bid for the next Hosting.

However the Hosting decision is not just one for the Minister of Sport, but for the whole of the 20 strong Cabinet, including Winston Peters.

Three into One won't go

Auckland's Mayor has been keen for over 12 months to introduce a bed tax to fund Major Events in the City of Sails. However, Wellington again considers it a low priority. Legislation that has yet to be introduced needs to be passed through Parliament to enable the new bed tax to be collected. Again, Wellington is likely to collect and distribute it. But the idea doesn't seem to have a lot of traction outside Auckland.

Then there's SailGP. The fourth and final event will be sailed in Auckland in January 2026. The Hosting Agreement contract, signed by the former Labour-led Government, involved spending $5.4 million over four years. The annual Event Fees, at $1.35 million a pop, came from MBIE's $60 million Major Events fund.

With SailGP frequently commenting that venues are now queuing for events, who knows what the Event Fee will be for the next period in New Zealand? Will it be in Wellington's price bracket? Will MBIE schedule two short-term events for Wynyard Point and Jellicoe Harbour in 2027 to completely frustrate the America's Cup hosting?

The same MBIE Major Events Fund is on the hook for $4million for The Ocean Race stopover in 2027.

On the face of it SailGP also sets up on the same Wynyard Point to be used by The Ocean Race stopover - which would be in use for about a year or more if the Auckland America's Cup hosting was successful. Decisions already taken by Wellington mean there's no room left at the Wynyard Point Inn for the America's Cup teams.

Critics and academics always question the economic benefits of hosting the America's Cup.

But over the past three years, there has been plenty of evidence to show what happens if the event is NOT hosted in the City of Sails. Two years of recession and 184 days of Wellington-imposed COVID lockdown across five periods have taken their toll on the Auckland region, business and hospitality, and the $3 billion a year NZ marine industry in particular. Wellington's reaction to the virus has killed off the vibe in Auckland - where the mantra, last year, has been "survive to '25". While there are good signs of an economic turnaround, for the many Auckland businesses on Struggle Street the announcement of a major event covering 12 months would make a big difference financially as well as mentally.

While there has been plenty of talk, the only action that has had an impact, is SailGP, which provided a two-week sugar-shot in mid January 2025.

Marine Industry shop window

Always forgotten by mainstream media and politicians is that the America's Cup has always been the shop window for the $3 billion a year New Zealand Marine Industry – chase boats such as the Catalyst 45 and Protector RIBs were explicitly developed for Cup clients and have spun off into the more general use internationally. Then there are Southern Spars, North Sails NZ, C-Tech, Predictwind, and many more who fly under the same radar. Where would Animation Research Ltd be without the America's Cup? These award-winning New Zealand companies have grown wings through the Cup, turning fledgling industries into world leaders.

The lustre from various Cup activities reflects well on New Zealand as a country that fights well above its weight. Correctly leveraged, the Cup offers New Zealand several unique tourism promotion opportunities over the entire Cup cycle.

While some companies do well out of specific team requirements for a Cup in Auckland, there is no doubt that a rising Cup tide floats all boats for the marine industry. The refit facilities for superyachts in New Zealand are now outstanding, providing work for the industry.

Also forgotten is the fact that most of the marine and superyacht industry, as well as companies closely associated with the America's Cup, are located in industrial areas that provide high-value-added work for residents of south and west Auckland. The mainstream media headline that an NZ-hosted Cup benefits only the wealthy is a complete myth.

A properly structured Cup competition of NZ and internationally hosted events can boost Auckland and New Zealand's tourism and investment profile. Surprisingly, the NZ Prime Minister, a former airline CEO and maybe the keenest advocate for more investment and the need for higher-quality tourism in New Zealand, is keeping his powder dry on Auckland hosting the America's Cup.

It is a fact that New Zealand is slowly slipping down the ladder of Events that it is capable of hosting. An Olympics has never been on. A Commonwealth Games has also slipped over the same horizon, along with the Rugby World Cup - except in a junior role to Australia.

But the America's Cup is not in that category. New Zealand is the holder and decides the Venue. There is no elongated multi-million bidding process, years out to some European based world authority.

There's no need to fly halfway around the World to run a Hosting Bid across all the right people. All the key people are in downtown Auckland, at worst a cab-ride away.

Auckland has the facilities and is one of the few places that could hold an America's Cup tomorrow. The support facilities and a top-shelf marine industry are in Auckland capable of supporting any requirement of the teams.

Other than the very basic requirements of the Deed of Gift, the rules and way the event is conducted is largely the call of the Defender. Anyone with a modicum of vision can works out a way to leverage the situation to New Zealand's economic advantage.

But for all that, Cup Spy's pick is that Wellington's lethargy and hand-wringing will cost Auckland the America's Cup hosting - which should have been an easy win for New Zealand.