Business commentators say the most sensible business decision could be to take on the next America’s Cup overseas challenge.
“The cold hearted business story is that if you want to maximize the awareness of Team New Zealand and sailing as a sport, the decision is obvious,” says Dr. Bodo Lang, director of marketing at Auckland University.
“You go abroad wherever you have a really large population base and a relatively untapped market. Whereas in New Zealand, especially in Auckland … like many more [people] Could you perhaps convince them to start sailing? “
Team New Zealand have insisted that it is still possible for the Cup’s defense to stay in Auckland, but as an exclusive negotiating period ended this week, the government withdrew their $ 99 million support package.
* America’s Cup: What happens to the industries surrounding the Cup when it leaves New Zealand?
* This could be Auckland’s last America’s Cup, so make the most of it while you can
America’s Cup: Motor racing is just the tip of the economic iceberg for Auckland
An important consideration for the team is expected to be the live broadcast. Sources say there is pressure to hold the event where time zones favor most sailing fans.
“The fact is, our time zones are not exactly the most helpful to Europe. It’s not that bad for the US, but for Europe we are on opposite ends of the spectrum, ”said John Miles, executive director of the Marketing Association.
The Prime Minister said she wanted the next kiwi regatta in New Zealand like any other kiwi, but at some point value for money would become a factor.
The America’s Cup is also an expensive event that relies on wealthy supporters and fans. swell Stuff spoke, suggested that any city assuming hosting rights would weigh the prestige against the cost.
As the current cup holder, Team NZ is expected to be able to raise a premium for its own sponsorships, and a source said local sponsors would likely follow everywhere.
The Middle Eastern airline Emirates has been the team’s main sponsor since 2004. However, the pandemic has put all airlines under extreme pressure, posting a half-year loss of $ 3.8 billion (NZD 5.2 billion) in February.
An airline spokeswoman said Emirates’ position on sponsorship in New Zealand was unchanged.
From the spectator’s perspective, Lang said that Asia has its largest audience for the Cup, but that the spiritual home of sailing is arguably Europe and North America.
“San Francisco was a great venue because it’s a cosmopolitan city and it’s relatively easy to get to. Auckland is a fantastic high quality city but we are 12 hours away from any place with a really large population. ”
On the other hand, there is a moral argument that New Zealand taxpayers have put money into the America’s Cup infrastructure and need the next event to get repayment for the amount lost to Covid, Lang said.
About $ 250 million was invested in the event by the Auckland government and council, with most of that going into infrastructure beyond the regatta.
Keeping the defense in New Zealand would be a “massive lever” to win back Covid-shy tourists who were less interested in flying far or risking disease, Lang said.
A source said it was difficult to quantify the enthusiasm and memories the Cup generated among New Zealanders and overseas viewers.
“How do you rate that?”
Team NZ announced in February that it had received expressions of interest from up to 10 cities interested in hosting rights.
Keeping the team together would be paramount, said ferry builder and former team NZ yacht designer Michael Eaglen.
“Your commitment to Brand New Zealand, the support of the New Zealand marine industry, has proven itself over so long.
“If you take it away, don’t take it away to annoy someone or because you don’t care, you just do what you have to do and I think we have to respect and support you for it.”
Meanwhile, the Ministry of Economy, Employment and Innovation will publish financial data on this year’s cup event and a cost-benefit analysis at the end of the month.
Nick Hill, CEO of the Auckland Unlimited business development agency, said he “fully understood the challenges Team NZ is facing”.
And while the economic returns from this year’s Cup were not what they had hoped for before Covid, this year’s race had nonetheless produced a number of positive results.
“We have new infrastructure that has opened up public spaces and uses for other events along the Auckland waterfront and has increased the capacity for superyachts, which makes it more attractive to do valuable renovation work here and encourage the high-net to visit owners. “
The event had also given the shipping industry an opportunity to showcase its innovation and “broadcast stunning images of Auckland to millions of households worldwide”.
An estimate by the New Zealand Marine Industry Association showed that if all of the superyachts expected for the Cup could have come, they would have added $ 430 million to the economy.
One hundred and sixty superyachts were expected, but only 20 made it due to government border restrictions.