Gladwell's Line - 'Tis the Season to be Silly
by Richard Gladwell, Sail-World.com/NZ 7 Dec 2017 02:45 PST
7 December 2017
Skipper Glenn Ashby and helmsman Peter Burling lift the America's Cup for the first time in Bermuda © Richard Gladwell
Maybe it is not surprising that the Kiwi media has once again started caning Team New Zealand with the same gusto and lack of precision that it has for the past 14 long years.
As we head into Christmas, sports news is scarce.
The All Blacks have come to the end of their 2017 program; the Rugby League team didn't exactly cover itself in glory with its early exit from the NZ hosted World Cup. Football failed to qualify for the World Cup. No-one believes the Warriors can do better in next year's NRL. That just leaves Cricket - and the America's Cup.
The America's Cup is an obsession in New Zealand. For New Zealand media of all persuasions the America's Cup and Team New Zealand are the Christmas gift that just keeps giving and giving. Everyone has an opinion. The media doesn't need facts - just an angle. That's what pulls the listeners/viewers/readers during slow times in the Silly Season.
Facebook's announcement that the America's Cup was their biggest event in New Zealand for 2017 did come as a bit of a surprise - underlining the pulling power of the America's Cup for Kiwis.
And to put matters in their correct perspective, the politicians and their election issues were eighth in the Facebook rankings.
Now the politicians and media are hitching a ride with the Cup - the two major talking points over the 36th America's Cup have been where to put the bases and the funding.
As this Christmas pantomime is being played in Auckland - for Cup fans worldwide the answers may be forthcoming on whether the 2021 America's Cup will be on free to air TV channels, and Youtube - and other media. That's quite a different approach to the rights fee based approach of the last Cup which enraged Cup fans.
Almost as soon as New Zealand won the Cup for the third time in Bermuda in late June, questions were raised on the "infrastructure" necessary to house the team bases in Auckland.
While the politicians are long on angles and options, the fact that they always overlook is that Auckland had the much-debated infrastructure, but sold it.
Now, what housed a dozen team bases (well 11 bases, plus Jimmy Spithill's Young Australia floating on the Viaduct on a barge), is no more.
In its place is a swathe of luxury apartments, premium office space, and swanky hotels. They produced a handsome return on investment for the developers. And now the Auckland Council has a tidy income stream from the rates and other revenues.
Fortunately, the area was not named Blake's Harbour. All evidence of his outstanding contribution and legacy has been well erased.
The reality, of course, is that there is no obligation on Auckland to come up with any "infrastructure" for the teams.
Auckland could choose to take a leaf from San Diego's book in 1988, 1992 and 1995 and leave the teams to do their own thing and make their own arrangements. Provided Team New Zealand could hold onto their two-storey "palace" in Beaumont Street and accompanying tent and container city, then the 2021 Defence would be off to a flying start.
The consequence of that "every team for themselves approach" is that the benefit for Auckland and New Zealand is reduced to on the water exposure only. There is no America's Cup Village, grandstands, big screens, dock-in and dock-out shows, instant media conferences plus all the other sideshows that go with the America's Cup. The racing may as well be conducted out the other side of Great Barrier Island as well. And don't worry about showcasing New Zealand either.
One gets the strong impression that City Hall and its attendant media choir feels it has been put over a barrel by the Kiwi America's Cup team. Instead, they should be taking a long hard look in the mirror.
Coming ready or Not
It was only after the team had made it to three America's Cup Matches as top Challenger, had won the 35th Cup and it was coming to Auckland ready or not, did the serious planning begin.
Maybe it is unrealistic to expect prime waterfront land to sit like a bereft mother gazing out to sea waiting for the return of a favourite son.
But the Council failed to plan. The dotted lines of a Halsey Street Extension in the September 2017 Council Meeting became solid lines in late November, with the comment that they had been "solid line since 2012" and the notation "consistent with the intent of Waterfront Plan 2012".
But the raft of mostly unsuitable sites produced in the first cut of options underscores the Council's reluctance to face up to the hard question: "What if we won the Cup back?"
Even more, telling is the fact is that the highest scoring scenario (by more than 20 points) was ditched on November 23 - after surviving a vote to be not given further consideration on September 5, 2017.
The scoring of the other two remaining options shows that both have serious flaws. The one favoured by Minister David Parker is only 2points above a failing grade. There has to be a high likelihood that the completed price in mid-2019 will be well above the estimates of late 2017, once contractual buy-outs have been fully factored into the various equations.
The Halsey Street Extension is a "clean build" over the water with the major risk being identified as: "Stakeholder opposition to a wharf extension into Waitemata Harbour".
A seismic shift and aftershocks
The concession by Team New Zealand Board Chairman, Sir Stephen Tindall that the team was prepared to be flexible in its preferred location caused a few quizzical looks midway through what was to be a question and answer session with the full Auckland Council on November 23.
In the midday TV news, with a live report from that Meeting, it was reported that Sir Stephen and Chief Operating Officer Kevin Shoebridge were attending in a listening capacity only.
Whether that is an accurate comment is known only to the parties involved. It would be surprising if the reporter made it up.
When given the opportunity to make an opening address, Sir Stephen instead of setting out the Teams' view of the grand scheme, used the opportunity to thank the Council officials for the excellent job they had done, and the time they had put in. Then he and Shoebridge fielded questions.
It was Mayor Phil Goff, a former Minister of the Crown who very disarmingly asked Tindall to reconcile his support for the stand made against Ports of Auckland two years earlier, with Team New Zealand's preferred option known as the Halsey Street Extension, which also extended into the harbour.
Sir Stephen replied with words to the effect that the Team was prepared to be flexible. That comment was greeted with surprised gasps from various corners of the room.
Many of the Auckland sailing fraternity including the Royal New Zealand Yacht Squadron had taken a similar stand to Sir Stephen back in 2015. The Halsey Street Extension is quite different in that it stayed well inside the existing wharf line, and made a much better use of a rather unlovely part of the harbour. There was no reclamation involved, and tidal flows, such as they are in that part of the harbour, were undisturbed.
Support by the sailing community for the Protest against the Ports of Auckland proposal in 2015 was leapfrogged across to the America's Cup opposition. That misconception prompted the Council officials' only adverse comment on the Halsey Street Extension about "Stakeholder opposition to a wharf extension".
After the Meeting there were many vociferous comments in social media by those who had previously supported the stand by 2015 protest groups, but were firmly against the stance taken by the same groups over the America's Cup options.
There was little doubt that the groups who successfully opposed the 2015 position which was taken to the High Court, had leveraged that legal success across into the 2021 America's Cup proposals.
The fact that the Royal New Zealand Yacht Squadron which had been a major force in the 2015 protest, had lodged a statement strongly supporting the Halsey Street Extension if it was noticed, was not even mentioned in the Council Meeting.
Early word carries the day
According to TV news items, the protest groups accompanied the local and national politicians as they toured the various sites the weekend before the Council met to deliberate. A spokeswoman for one of the groups commented in news item, four days before the Council meeting that the Team New Zealand preferred option was now "off the table". That indeed proved to be the case when the vote was taken - leaving many to wonder as to the process being followed.
Compounding the difficulty many of the sailing community had in understanding the logic of the Council process, was the fact that in the morning session of the November 23 meeting the same Council had approved the installation of a Mooring Dolphin to allow larger cruise ships to berth in Auckland. The two mooring platforms extended 95 metres out into the harbour, and very close to the extremity of the current outer wharf line. The two Dolphins were connected by a 3.5metre wide walkway.
In the morning, Mayor Goff gave a very impassioned speech in favour of the Mooring Dolphins. But he spoke and voted the opposite way in the afternoon to get the Halsey Street Extension taken off the list of options for Decision in a mid-December meeting.
It also transpired during the Council deliberations that just one of the Councillors who spoke had actually been to an America's Cup. A former Mayor, she was in San Francisco and voted in favour of the Halsey Street Extension.
Flying Stadium and payback kites
Those with longer memories will recall that construction of a billion-dollar waterfront stadium was offered in 2006 by the then Labour Government ahead of the 2011 Rugby World Cup. The stunning glass structure was bounced - not because of Waitemata Harbour intrusion, but on sentimentality for the preservation of the hallowed turf of historic, then 106yr old, Eden Park.
Instead, Rugby's shrine had $288million spent on upgrades, and according to a recent Council report, Eden Park (limited to 21-night events per year) will require a further $250million spent on it over the next 15 years. The alternative is again a new billion dollar stadium for downtown Auckland.
Compared to those eye-watering price tags, the America's Cup infrastructure proposals start looking like chump change.
Staying with the 2011 Rugby World Cup (and remembering that the 2013 America's Cup out-rated it in terms of TV viewing audience), there was a $150million Hosting Fee paid to the IRB (now World Rugby). According to an April 2011 NZ Herald report, the NZ taxpayers contributed $266million to the tournament. A total of $1.2billion was paid by New Zealand for the tournament compared to a projected economic return of $700million (NZ Herald report on costs and impact projections of 2011 Rugby World Cup).
In 2006 the veracity of economic impact studies on the Rugby World Cup was questioned. "The economic case for hosting the Cup was weak," he said in the April 2011 NZ Herald report.
Six and a half years later the same professor echoed the same lines about the economic impact of the 2021 America's Cup being overblown just as he did in 2006 about 2011 Rugby World Cup.
There have been economic impact studies done after the 2000, 2003, 2017 Cups and a projection for the 2021 event. All can be reconciled based on numbers of competing teams and durations of stay at the venue. They can also be calculated by applying some spend percentages to team budget. It's not the guessing game detractors would have you believe.
The impact of the 2000 and 2003 America's Cup was estimated to have triggered a .75% blip in New Zealand's GDP - which is a significant impact.
Umbridge at Hosting Fee
News that organisers of the 2021 America's Cup were seeking a Hosting or Event Fee of an unspecified amount had red-hued politicians and media enraged.
They believed that it was time Team New Zealand put on a free show in Auckland.
Forgotten is the fact that tickets for the 2011 Rugby World Cup Final cost up to $1250. In 2021 fans will be able to watch the America's Cup Regatta from the Takapuna shoreline free of charge.
Also forgotten is the likelihood that TV coverage of the 2021 America's Cup will be on Free to Air broadcast.
And then there is the memory lapse on the pre-Election point that one of the Coalition Government partners wanted all major international sporting events available free to air - even though the broadcast rights for the event were held by a subscription TV channel.
While the hazards of that minefield are yet to probed - it has never been in question that some compensation would be paid from government coffers. Just a matter of how much and how often.
The point is that cost of all this free coverage costs something - it's not cheap to produce, and someone has to pay. The upside - as was seen in Fremantle in 1987 - is that an outstanding TV production can capture massive international audiences. It is well worth the investment - both in the impression of the event and the perception of the host city and country.
The teams entering the 2021 America's Cup aren't getting the same free ride as the Kiwi fans.
The Challengers will be ponying up with NZD$3million each in entry fees.
The responsibility (and cost) of running the Challengers Selection Series (now the Prada Cup) has now been deftly diverted to the Challengers, and for that, they receive a little over 75% of the entry fees. Presumably, that includes a contribution to the television and coverage costs. Further revenue comes from broadcast rights. But if the free-to-air model is pursued to get the maximum audience, then TV Rights revenues will be less than would be the case from subscription viewer only channels.
Buried in economic impact report from tourism-reliant Bermuda, was a calculation of international exposure obtained from broadcast media of NZD$116million. A big part of that is exposure in media spots that money can't buy - like prime-time news programs.
A highly animated Auckland Mayor Phil Goff was correct in his repeated claims saying that there was no Hosting/Event Fee paid for the 2000 and 2003 America's Cups in Auckland. At those two events, destination and tourism marketers lured key international media to both cover the Regatta and also take in New Zealand's top tourist destinations in between rounds of the Louis Vuitton Cup.
Nice job if you can get away with it.
But it is also a form of ambush marketing, which was not allowed for the 2007 and 2013 America's Cups. NZ Inc had to make a decision decide whether it was going to become a paying sponsor of Team New Zealand or spend the same dollar on other export and tourism promotion in Europe and USA.
Labour signs two campaign deal
Then Labour Minister for Sport, Trevor Mallard signed a two campaign deal with Team New Zealand for team sponsorship for the 2007 and 2013 America's Cup campaigns.
That got the New Zealand Government agencies inside the America's Cup Village in Valencia and San Francisco, setting up trade and tourism expos, and doing an outstanding job.
Prime Minister Helen Clark became a strong supporter, sailing with the team in one race in Valencia. Mallard, a long-time supporter was in Bermuda.
Critics of Team New Zealand would now have it that the well-massaged sponsorship deal was just a financial leg-up to the team that should now be repaid.
Maybe Bermuda's $100million in "free" exposure - that New Zealand and Auckland could expect as a minimum from the 2021 America's Cup should also be factored into the various funding equations. New Zealand Inc stands to do very well if it is smart and works the opportunities on top of the $600million plus tax windfall.
It is completely naive to expect that the 2000/03 style free lunch is on the 2021 menu for Auckland.
While saying in the early days that they should follow Team New Zealand's mantra of throwing the ball out as far as they can for the 2021 America's Cup, the Auckland Council's thinking now seems geared to doing the minimum possible and repeating the mistakes of previous venues and Cups.
Getting uptight about talk of the 36th America's Cup heading to the Middle East, Sardinia or the Russian Riveria is pointless. At this stage, the opportunity to host the premier regatta in sailing is Auckland's to lose.
The City of Wails would do well to take on board Dennis Conner's advice of a couple of decades ago, as the America's Cup went through a major and uncertain transition. At the time, Conner was running a very commercial program, not dissimilar to Team New Zealand's current style.
"What's good for the America's Cup is usually good for Dennis", said the three times America's Cup winner.