Please select your home edition
Edition
InSunSport - International - GR

America's Cup- Critics dealt body blow with Cup benefits to NZ

by Sail-World on 28 Mar 2014
Oracle Team USA chases Emirates Team NZ - 2013 America’s Cup, San Francisco © Richard Gladwell www.richardgladwell.com
The 34th America’s Cup Regatta in San Francisco delivered a range of direct and indirect benefits for the New Zealand economy, according to two evaluation reports released on Thursday (NZT).

Economic Development Minister Steven Joyce released both an independent evaluation of the Government’s investment in Emirates Team New Zealand and an evaluation of New Zealand Trade and Enterprise’s (NZTE) leveraging programme in San Francisco.

We also present an audio interview with an economist commenting of the accuracy of the reports.

'The economic benefit from our investment in Team New Zealand is considerable. From a $36 million taxpayer investment, the evaluation shows an estimated positive impact of $87 million to the New Zealand economy,' Mr Joyce says.

Team New Zealand obtained 66 per cent ($118.3 million) of their total revenue of $179.8 million from international sources. Team New Zealand needed to source at least $2 for every $1 of Government support and exceeded that with $3.68 secured for every $1.

In total $153 million or 85 per cent of the total campaign budget was spent in New Zealand.

Commenting on the reports , economic lecturer Dr Eric Crampton of the University of Canterbury, and author of the 'Offsetting Behavior' blog, said that he had had a brief look at the reports and they were more credible than most he had looked at. he noted that there was no multiplier effect in the reports - a device often used to inflate the economic impact in such report - through increased spending flowing into other parts of the economy.

The sponsorship money that was sourced from outside NZ amounted to $103million, was money that would not otherwise have been spent in New Zealand. 'It was net new spending that otherwise would not have happened.' A total of 710 people were directly engaged in the NZ boatbuilding industry as a result of this inflow, and a total 1234 estimated as the economic effect of having the boats built and other activities related.

'I have not seen huge obvious holes in it which I have seen in other reports of this kind,'Crampton said. 'I would more to the 710 direct jobs that were created, rather than the indirect ones.'

For the full interview on Radio New Zealand: http://www.radionz.co.nz/audio/player/2590662!click_here - the comments from Dr Crampton start at 5.45sec

'One of the key benefits of the America’s Cup challenge was the lift it provided to New Zealand’s profile, particularly in North America over the period of the regatta,' Mr Joyce continued.

'With New Zealand continually in the international media over the 55 days of racing, figures show that the tourism, education and construction sectors, as well as the marine sector also felt the positive impact of government investment.

'The reports show that New Zealand agencies successfully leveraged participation in the races to improve international awareness of New Zealand as an innovative place to do business. The recreational marine industry also enhanced its ability to attract and retain highly skilled and professional workers, wanting to be involved New Zealand’s campaign.'


The 212 companies that participated in the NZTE’s America’s Cup business leveraging programme also reported a range of benefits.

'New Zealand design, manufacturing, and technology were on display both on and off the water, and told a compelling story about who we are and what we can deliver. The audience reach of media coverage about New Zealand business was measured up to 86 million,' Mr Joyce says.

'Activity during the Cup has contributed to trade and investment deals so far worth $200 million for New Zealand and a further $120 million of new sales opportunities and investor interest.'

Following the regatta, the Government committed to an interim investment of $5 million to retain key team members for the next challenge. A decision on any further government investment will be made following the delivery of a business case by Team New Zealand to the Government.

'One of the things I have made clear to team representatives is that the Government must have confidence that a strengthened governance structure has been put in place before it will consider a further investment of taxpayers’ money in another challenge,' Mr Joyce says.

'I look forward to having the opportunity to evaluate progress in that regard.'

For more information on the America’s Cup evaluation report and NZTE’s leveraging programme evaluation visit: click here


Questions and Answers

How much Government funding was invested in Team New Zealand for the 2013 America’s Cup?

In May 2008, Emirates Team New Zealand (TNZ) and the New Zealand Government formed a Strategic Partnership Agreement, which required TNZ to raise at least $2 for every $1 of Government funding (capped at $36m), provided TNZ lodged a competitive challenge for the 34th America’s Cup.

What proportion of Team New Zealand income came from Government investment?
In total, TNZ raised $179.8 million. Government’s investment accounted for approximately 20 per cent of this.
The largest total source of funding came from overseas. This equated to $118 million or 66 per cent of the total income.

What was the total value added to the New Zealand economy by Team New Zealand?

Total value added to the New Zealand economy by Team New Zealand (EIA): $87 million.
Total value added by Team New Zealand and Luna Rossa combined (EIA): $106 million.

What was the additional employment generated by Team New Zealand?

Additional employment contributed by TNZ: 1,220.
Additional employment contributed by TNZ and Luna Rossa combined: 1,480.

What was the tax revenue generated by Team New Zealand?

Total tax revenue from TNZ: $38 – 40 million.
Total tax revenue from TNZ and Luna Rossa combined: $56 – 58 million.

Would these benefits have been achieved without Government’s investment?
The evaluation concludes that the positive economic benefits would not have occurred in New Zealand without the strategic partnership agreement between the Government and TNZ.

What was the purpose of NZTE’s business leveraging programme?

The programme was designed to successfully leverage New Zealand’s business, technology, food, wine, marine, aviation and tourism ties to the United States, and has helped forge meaningful business relationships for New Zealand companies.

During the programme, New Zealand companies and sectors hosted current and prospective clients, including a number of VIPs and High Net Worth Individuals, as part of deepening existing relationships and laying the foundation for future partnerships.

How much did NZTE invest in its leveraging programme around the America’s Cup?

The Government approved NZTE investing $3.9 million to support the America’s Cup Leveraging programme.

What were the results of the business leveraging programme?

Activity during the Cup has contributed to trade and investment deals worth $200 million for New Zealand and a further $120 million of new sales opportunities and investor interest.

What steps have been taken to ensure the independent nature of the evaluation of the strategic partnership agreement between Team New Zealand the Government?

Following a robust procurement process, Market Economics was appointed as the independent evaluator. They are a New Zealand research firm based in Auckland. Their work was peer reviewed by NZIER.

What investment has Government committed to Team New Zealand for the next America’s Cup?
Government has agreed to an interim investment of $5 million.

What is the purpose of this investment?

The interim investment will be used to retain key team members until a decision has been confirmed regarding TNZ involvement in the 35th America’s Cup.

Will Government invest further if Team New Zealand decides to enter the 35th America’s Cup?

A decision will be made following the receipt of a business case from Team New Zealand, along with the details of the 35th America’s Cup protocol.

InSunSport - NZNorth Technology - Southern SparsWildwind 2016 660x82

Related Articles

Gladwell's Line - Another day, another Olympic selection decision
The Olympic non-selection issues continued to generate heat on both sides of the Tasman, and now further afield. The Olympic non-selection issues continued to generate heat on both sides of the Tasman, and now further afield. In Australia, the Court of Arbitration for Sport has handed down its Decision without providing reasons after a week of deliberation on the non-selection of their top crew in the 49erFX Women's skiff.
Posted on 29 Jun
Gladwell's Line - Emirates Team NZ launches shadow AC50
Emirates Team NZ took a late but significant step along the road to the 35th America's Cup, with the launch of their AC4 Emirates Team NZ took a late but significant step along the road to the 35th America's Cup, with the launch of their AC45S - as the test boats are called in the Protocol which governs the 2017 event. The bloated Protocol, which now runs to 83 pages of legalese, is restrictive on the size of boat that can be built as a test platform but doesn't restrict the number that can be built.
Posted on 22 Jun
America's Cup - Emirates Team NZ launch their AC45S - Video
Emirates Team New Zealand launched their first AC45 S (Surrogate) on Tuesday afternoon at their Auckland base. Emirates Team New Zealand launched their first AC45 S (Surrogate) on Tuesday afternoon at their Auckland base. The team is expected to start their on the water testing program in a few days.
Posted on 22 Jun
America's Cup - Emirates Team NZ launch new boat and new sponsor
Emirates Team New Zealand launched their new development boat at their Beaumont Street Emirates Team New Zealand celebrated a long awaited milestone today at their Beaumont Street base in Auckland by launching their first custom designed development boat. The boat is the first true development boat of which Sweden, Britain has two and USA has three. Japan has one passed on from the USA Defender. Team New Zealand also announced a welcome new sponsor.
Posted on 21 Jun
America's Cup - Emirates Team NZ goes to the market for shore crew
Emirates Team New Zealand is looking for enthusiastic staff to join their composite building team. Emirates Team New Zealand is looking for enthusiastic staff to join their composite building team. The 30year old America's Cup team are building carbon composite parts for the team's America's Cup sailing yacht, and have positions available for entry-level or experienced boat builders.
Posted on 17 Jun
America's Cup World Series - Ainslie gives Chicago a big tick
Sir Ben Ainslie has come away pleased with the outcome of the Louis Vuitton America's Cup World Series Chicago. Sir Ben Ainslie, four times Olympic Gold medalist and skipper/CEO of British America's Cup team Land Rover BAR, has come away pleased with the outcome of the Louis Vuitton America's Cup World Series Chicago. After giving the last event in New York a spray in the Daily Telegraph (UK) Ainslie was pleased with both his team's performance, and the Chicago event itself.
Posted on 14 Jun
America's Cup - Super Sunday signs off LV ACWS Chicago in style
Six America’s Cup teams fought fiercely for the double points on offer for each of Sunday’s three races. Perfect winds, cooler temperatures and a record breaking crowd of over 200,000 America’s Cup fans lining Chicago’s Navy Pier, combined to make Super Sunday, the final day of the Louis Vuitton America’s Cup World Series Chicago, an incredible finale for foiling action in the USA.
Posted on 13 Jun
America's Cup - Emirates Team NZ extends despite tough time in Chicago
Emirates Team New Zealand managed to maintain their Louis Vuitton America’s Cup World Series series lead in Chicago Emirates Team New Zealand managed to maintain their Louis Vuitton America’s Cup World Series series lead in Chicago today after a tough regatta that tested the entire fleet. Going into the event Emirates Team New Zealand held an eight point lead over Oracle Team USA, the Kiwis leave Chicago with a ten point advantage over Land Rover BAR who is now tied with Oracle Team USA.
Posted on 13 Jun
America's Cup - Artemis win Chicago as Team Japan wins two races
Louis Vuitton America's Cup World Series got three races away on Super Sunday. After losing the first official day of racing due to light winds and the non-arrival of the onshore breeze, Louis Vuitton America's Cup World Series got three races away on Super Sunday. From a racing perspective this was probably the best day of racing yet in the series which counts for points in the Qualifying Series of the America's Cup in 11 months time.
Posted on 12 Jun
America's Cup - ISAF Jury lose first round in Oracle crewmember action
A judge has thrown out a bid by the International Jury and ISAF to have an action against them dismissed A judge in the District Court in San Francisco has thrown out a bid by the International Jury and ISAF (now rebadged as World Sailing) to have an action against them dismissed, as being out of time. The case is one of two bought by former Oracle Team USA crew member, Matthew Mitchell. The first has already been dismissed against Oracle Team for wrongful dismissal
Posted on 12 Jun