The next America’s Cup scheduled for 2021 is shaping up to be a “royal” sailing event of eminent competitors of America’s Cup royalty with not only Luna Rossa (ITA) returning to the competition, but also the New York Yacht Club (USA) after what will be in 2021 an 18-year absence.
The US club who held the America’s Cup for 132 years may again be racing the aristocratic Royal Yacht Squadron (GBR), for the first time, in the America’s Cup since the 1958 Match in Newport, Rhode Island.
Whether or not you are a follower of the America’s Cup, New Zealand Government funding of an America’s Cup in New Zealand is an independently documented economic winner for all New Zealand. There are several published independent economic reports all of which illustrate the enormous gains for New Zealand when the America’s Cup was held in Auckland in 2000 and again in 2003.(i)
After the America’s Cup was won in 1995, both central and local Government invested $130m in helping to host the next Cup event in Auckland. Much of that expenditure was in the redevelopment of Auckland’s Viaduct Basin to house competitor bases.
What was the payback? A $639.6m windfall to New Zealand economy, 10,620 new full-time jobs and a legacy public amenity. Central government expenditure was more than recouped through an increased tax take by way of GST, PAYE, FBT, fuel tax and import duties collections paid by competitors, officials, event and team sponsors as well as additional visitors to New Zealand.
Local government continues to enjoy the substantially increased rates revenue it receives from the redeveloped Viaduct Basin area.
Team New Zealand’s home win over Luna Rossa in 2000 made for even more spectacular returns. With the facilities already built, a more modest $8m was needed from the government for the 2002/2003 America’s Cup, but New Zealand received yet another $533.4m injection into its economy and another 8,180 full-time jobs.
Central government received another massive tax windfall. It is these successive tax windfalls that help fund extra government expenditure in health, education and social services. They also demonstrate why it is vitally important to invest not only in the event but also in Team New Zealand so that the nation might continue to enjoy these benefits.
What New Zealand’s past America’s Cup experiences tell us, there is an indisputable economic case for government support for the 36th America’s Cup deserving bi-partisan support. Central and local government politics and personalities should not be allowed do not sink the boat.
The provision in the recently published Protocol, of the 36th America’s Cup event allowing the event to be lost to Italy, needs to be taken seriously. As past America’s Cup arbitrations and New York courts have affirmed, there is no legal requirement in the Deed of Gift that racing for the Cup must be in the home waters of the Cup holder.
As the trustee of the Cup, the Royal New Zealand Yacht Squadron owes legal duties, not to the New Zealand economy, but to do the best for the Cup competition.
Make no mistake, Italy, the only other nation where Cup is as deeply popular as it is has been in New Zealand, will be as eager to hold the event, as it was when it put its hand up in 2003 and after the Golden Gate Yacht Club won the Cup from Alinghi in 2010.
Now is the time for our political leaders to put aside party politics and together step up to the sort of leadership well demonstrated by our sporting leaders before it is too late.
Hamish Ross is a 20 year America’s Cup legal veteran over five America’s Cup campaigns, mostly with overseas based teams and was between 2003-2011 involved in America’s Cup venue negotiations both in Europe and in North America. He currently lives in Auckland.
(i) The Economic Impact of the America’s Cup Regatta, Auckland 1999-2000 (McDermont Fairgray Group, Auckland, 2000); The America’s Cup Build-Up to the 2003 Defence (Market Economics Limited for the Ministry of Tourism, New Zealand, Auckland, October 2002); The Economic Impact of the 2003 America’s Cup Defence (Market Economics Limited for the Ministry of Tourism, New Zealand, Auckland, October 2003);Comparison of the America’s Cup Economic Impact 2000-2003 (Market Economics Limited for the New Zealand Ministry of Tourism, Auckland, 2003).
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