America's Cup- Bermuda will be a hard sell for Team NZ to Kiwi Govt

by Richard Gladwell/Sail-World.com/nz on 1 Dec 2014 The NZ Minister of Economic Development, Steven Joyce has repeated comments about his Government's preferences on venues for the 35th America's Cup.

With just two days to go before the next America's Cup venue is announced, Economic Development Minister Steven Joyce has confirmed it would be harder to justify government funding if the venue were Bermuda in 2017.

'It's hard to see the benefits of it from a New Zealand exporter's point of view if it's Bermuda [rather] than if it's San Diego, but we'll keep an open mind,' he told the NZ Herald.

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Team New Zealand have said previously that they will be providing the Government with proposals covering either the San Diego or Bermuda. The Minister has always made it clear that a mainland USA venue is considerably more attractive than the Bermuda option. Joyce is the #3 ranked minister in the NZ National Government, behind the Prime Minister and Deputy.

'But I don't know the details of the proposals. I don't know if they'll be asking for the same money in both venues. I don't know if there's anything else we should take into account.'

Mr Joyce said he had canvassed the relevant agencies such as New Zealand Trade and Enterprise and Tourism New Zealand 'and they were unambiguously more interested in the West Coast of the US than Bermuda'.

The New Zealand Government uses the America's Cup as a vehicle to promote New Zealand Tourism and Industry, and did so at the 2007 and 2013 America's Cups. The funding comes via NZ Trade and Industry, one of whose functions is to promote the New Zealand brand and what is commonly termed 'NZ Inc' internationally.

While the Government did provide an advance funding amount of $5million immediately after the 2013 America's Cup to provide the team with cashflow, a second request in the middle of this year for additional funding was rejected and the funds were raised from private sources.

The investment from Trade and Industry was believed to be $37million into both campaigns for a total budget of $100million. That was on top of the 'below line costs' which covered the building of substantial marketing base facilities at the America's Cup venue to attract the public to NZ products and industry, and also an extensive on the water guest program of both celebrities and those involved in key industries of interest to New Zealand.

While Team NZ say that they have the Bermuda option covered should the British Overseas Territory be announced as the next America's Cup venue, the gap - if NZTE elect not to be further involved - is substantial.



Without NZTE involvement in a Team NZ America's Cup campaign, the prospect of an America's Cup World Series event in New Zealand would be considerably reduced, as it is unlikely that NZTE could justify the substantial financial injection. The Auckland Council Events and Economic Development arm may pick up the running for the ACWS Auckland event, and while discussions have been held, there has been no announcement despite three of the six venues for 2015 being announced.

Any future involvement by NZTE in a future Team NZ America's Cup campaign is also expected to be along the lines of a commercial sponsorship package rather than a direct investment.

Earlier, a naive report from NZ Treasury suggested the New Zealand could get the same benefit from an America's Cup without investing in Team New Zealand. That approach was a throw-back to the hands-off model which did not maximise the commercial benefits for New Zealand Inc in the period 1987 - 1995.