America's Cup- Bermuda up for $40million in Venue Fee and Underwrites

by Richard Gladwell/Sail-World.com on 6 Dec 2014 The old America's Cup truism of 'if you want to know the truth, follow the money' appears to have been spot-on with the controversial decision to award the Venue for the 35th America's Cup to the island of Bermuda.


Figures released in the Bermudian House of Assembly reveal that British Overseas Territory, with a population of about 65,000, has agreed to pay the America's Cup Events Authority $15million as an Event Fee. A further underwrite of $25million has also been put in place against any sponsorship shortfall by ACEA.

Additionally the Bermuda Government intends to spend an additional $37million in dock infrastructure, the America's Cup Village and Services.

The total spend and underwrite is $62million against a projected tax take of $14million and projected spending by teams and fans in Bermuda of $250million.

The Minister of Education and Economic Development Dr. Grant Gibbons revealed some of the detail behind the financial arrangements to the House.

'It was clear at an early point in the bid process that in order to be seriously considered as a potential venue, Bermuda would need to commit a credible amount as a sponsor to hosting the event, and our initial bid included a commitment to spend $5 million per year over three years.

'Our agreement with the America’s Cup Event Authority, therefore, includes a sponsorship fee of $1 million in 2014, $4 million in 2015 and $5 million in each of 2016 and 2017. By agreement, these funds will be provided in Bermuda Dollars and will be spent in Bermuda.

'The Government has provided additional sponsorship, specifically, a guarantee of $25 million to the America’s Cup Event Authority against commercial sponsorship by companies and organizations that wish to gain marketing and hospitality benefits from the events.

'The guarantee will not be assessed until August 2017, and commercial sponsorships facilitated by Bermuda in cooperation with the America’s Cup Event Authority between now and 2017 will count against the $25 million guarantee.

Under the America's Cup Protocol any surplus from the Regatta is not distributed to the teams. Additionally through their $2million entry fee the teams fund the cost of officials and running the racing. With six teams entered that is a pool of $12million, which can be called on for additional funds is there is a shortfall.

The teams would normally expect to pay for all their base establishment costs, which are removed at the end of the regatta, leaving a flat tarmac.