America’s Cup: Irish officials advise government to withdraw from Cup bid
by Richard Gladwell / Sail-World.com Sep 15 8:02 AM PDT
September 16, 2021
Beaufort Cup Fastnet Race lead boats for military and rescue crews on Volvo Cork Week Day 1 Â© David Branigan / Oceansport
Tanaiste Eamon Gilmore and Minister Simon Coveney with the Volvo Ocean Race Trophy in 2012 Â© Caroline Crawford
With an announcement on the preferred host venue expected on Friday 17 September, several Irish media are reporting that Sports Department officials are advising the government to withdraw their candidacy to host the 37th America’s Cup in Cork.
The Irish Examiner says he has learned that the government has in recent days asked for more time – some suggesting it had asked for an additional six months – to consider the potential financial costs and benefits. Sources said there appeared to be no political will to support the event.
The bureaucrats’ advice follows a review of a report by Ernst Young indicating that the proposed infrastructure created for the Cup would cost 100 million euros and the event would cost 50 million euros for a return of the projects of the consulting firm to more than 450 million euros.
The main funder of the Irish bid, Foreign and Defense Minister Simon Coveney, had drawn up an ambitious plan linking the organization of the America’s Cup to the Global 2025 initiative. Ireland on its feet after the trauma of the global financial crisis in 2007-2008, Global 2025 planned to significantly expand Ireland’s place in the world and leverage its diaspora of 70 million people who had left for Ireland. other pastures at different stages of Ireland. the story.
In an unfortunate moment, Coveney, the second generation of a Cork yacht family, chaired the UN Security Council meeting on Afghanistan, at a time when he was the target of political attacks in Irish Parliament because of an appointment he made to the UN, which was used by his political opponents to call for a vote of no confidence in the Prime Minister, originally from Cork.
Earlier this week, the Cork Chamber of Commerce announced hosting the America’s Cup as an opportunity not to be missed.
Chamber Speaker Paula Cogan said: âNow is the time to focus the world’s eyes on our region and the America’s Cup offers the perfect vehicle to do so.
âAs we move beyond the pandemic, we have the opportunity to send a strong signal to the world and to the 900 million viewers of this event that Ireland has successfully passed through the pandemic and is open for business. ”
Spend mainly on projects already planned
The Irish Examiner reported earlier this week that most of the $ 100 million in infrastructure work awarded to the America’s Cup was ‘Planned anyway, and would just be accelerated, including electrification of the Cork to Cobh rail link, upgrades of the Cobh to Cork route, including the Belvelly Bridge bottleneck, as well as upgrades infrastructure at Kennedy Quay in Cork City which has been designated as the Racing Village – the potential of this area was highlighted during the lockdown when it became one of the city centre’s must-see outdoor spaces.
The expenses would also include the development of new marina facilities in Cobh and the development of new technical onshore facilities for racing teams, who base themselves in the host city up to two years before the race to design, build and test their facilities. racing yachts. Two sites are under consideration – the former IFI site and the Doyle shipyard site – both near Cobh ”
The timing of the advice reported by Irish bureaucrats is at odds with previous statements by Public Expenditure and Reform Minister Michael McGrath that he does not expect a final decision to be made this week as to whether Cork will host the America’s Cup in 2024.
Speaking in Cork on Monday morning, the minister said “a broad due diligence process is underway” and he does not expect the process to be completed this week. He said it was “extremely important” that the due diligence process, which is led by the Ministry of Sports and Tourism, be completed where “a significant amount of public money is involved”.
In terms of value for money, Irish costs are comparable to those spent in Auckland for the 36th America’s Cup. The costs were clearly identified in the Auckland Council’s own report as being $ 106.3 million for the construction of docks and ports, plus an additional $ 92 million for planned works, with an estimated cost savings. to $ 67 million thanks to the America’s Cup project. The work for the Cup included the development of the port, the removal and remediation of an abandoned fuel and hazardous substances storage area. The New Zealand government paid $ 40 million in hosting fees to America’s Cup Event Ltd, increasing the balance of hosting costs.
The Auckland Council spent $ 17 million on Cup-related activities and promotion – from an initial budget of $ 40 million, reduced to $ 20 million.
Following the outbreak of the COVID-19 pandemic in March 2020, the New Zealand government has chosen to close borders, order a nationwide lockdown, and pursue a COVID-19 elimination strategy . Arrangements were made for America’s Cup teams and essential services to enter New Zealand via a 14-day quarantine, and Cup races continued as planned, drawing 900 million viewers. .
Nielsen estimated the raw media of the event at $ 832 million, then applied a different measurement method that valued the coverage over a four-month period at $ 211 million.
Next Cup bigger than Auckland
The America’s Cup proposed for Cork is expected to cover a longer period than the Auckland event, with teams due to travel to the venue earlier, believing they would have a less disrupted speed test and development period than for the Auckland event.
Typically, the budget for an America’s Cup team is 75 million euros, of which around 50% is spent on site. At least six teams are expected for the America’s Cup 2024. In addition to the Auckland events, a Youth America’s Cup and a Womens America’s Cup are planned – bringing more teams to the regatta.
The Youth America’s Cup scheduled for Auckland had drawn 19 teams from 13 countries, which had made down payments when the New Zealand government canceled it as part of its COVID measures. The event was expected to generate an expense of NZD $ 10 million or â¬ 6 million.
Initially, a long list of 35 expressions of interest to host the 37th America’s Cup was reduced to five: Jeddah, Saudi Arabia; Valencia, Spain; All of Spain / Barcelona; Cork, Ireland and with Auckland, potentially still an option despite being unable to negotiate a deal during their exclusive three-month negotiation period after the 36th America’s Cup was concluded in mid-March.
If the Irish bureaucrats’ opinion is accepted, Emirates Team New Zealand and Royal New Zealand Yacht Squadron are expected to review the remaining bids, which are assessed against a set of 15 criteria with a weighting scale applied. in the evaluation process. Only three of the 15 points relate to financial commitments, with the remainder covering base team locations, weather and race area, attractiveness to team and event sponsors, media considerations and related issues.
The regatta could also spark interest in New Zealand, although the country is in another COVID lockdown.
Public opinion appears to have shifted in favor of the government funding the event to a greater extent than the $ 31 million initially offered during their exclusive three-month negotiation period. Auckland council has proposed a “value in kind” of $ 68 million – although details of this offer were not disclosed, it would be an inflated figure that will be revised with help from ‘a more realistic goal.
It is more likely that money from private sources can be used. While proposals put forward by a New Zealand group of anonymous investors are likely to be revived, a demand by the group that the CEO of ETNZ be kept out of the “purse strings” is likely to push the team. towards a less hostile group. .
Another alternative is for the teams to bear a greater share of the financial burden, or to organize the regatta without making it free to the public and free on television.
In the America’s Cup regattas before 2007, the Challengers came out of the Challenger Selection Series with a dividend.
During the America’s Cup 2007, when the Swiss Alinghi team fought back and the regatta was hosted by its America’s Cup Management event arm, a surplus of $ 48 million was split between the Defender and Challenger teams. This amount was paid before the due date, and the total amount of the excess amounted to $ 100 million, which belies the idea, apparently taken up by Irish bureaucrats, that the event is a hole black financial.