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Gladwell's Line: Irish bureaucrats cop media ire over Cup hosting 'indecision'

by Richard Gladwell/Sail-World.com/nz 20 Sep 06:14 PDT 21 September 2021
Emirates Team New Zealand takes on Luna Rossa - Final race - America's Cup World Series, Day 3, December 19, 2020 - Auckland NZ, Course A © Richard Gladwell - Sail-World.com / NZ

The Irish editions of the weekend and Monday morning newspapers have taken the Ministry of Sport bureaucrats to task over their "indecision" on the America's Cup hosting bid for Cork.

The features are more than just opinion pieces and were backed up by comments to Sail-World by other Irish mainstream media.

It would seem that the Irish sports panjandrums have a long history of fumbling at critical times over the hosting of major sports events.

Sunday's Business Post has a double-page spread under the headline "Hosting the America's Cup: does the case for Cork hold water?"

And opens with the statement of the obvious "There has been widespread frustration at Ireland's last-minute dithering on the bid for the world-famous yacht race."

The London based Sunday Times's Irish edition expresses similar sentiments in a lead article entitled "Critics of America's Cup pitch steer us away from ambition".

After some reflections on the points-scoring that seems to be the lot of Irish politics, the Times makes the point.

"It was never going to be easy to make the political case for giving state support to an event that involves millionaires racing their superyachts (sic) around a harbour for several weeks. The point is that the millions of euros these sailors splash out would be spent in Ireland."

It transpires that the America's Cup is the latest of several sporting major sporting opportunities which Ireland has lost through political ankle-taps in recent years.

The simple timeline is that in late January 2021, the Government of Ireland and several other venues submitted their formal bid to host AC37.

In June 2021, that was followed by an evaluation visit to Cork by Origin Sports, who are fronting the AC37 venue bid process.

Last Monday, September 15th, by way of a letter to Taoiseach Micheál Martin and Simon Coveney, the Minister for Foreign Affairs, the Irish Coalition Government, was told that the Cork had won the Hosting Rights for the 37th America's Cup.

The next day, Tuesday, Irish media reported that a decision to call for a further six month review period was taken at a meeting of the coalition's party leaders and a small number of other senior ministers on Monday night.

This decision was communicated to Emirates Team New Zealand the next day.

"This ask was met with surprise from many quarters and regarded by some as a poor way of doing business so late in the process, although those involved have stressed the professionalism of Ireland's overall approach up to that point," the Irish Business Post reported at the weekend.

"Political controversy surrounding Simon Coveney, the Minister for Foreign Affairs and the government's main cheerleader for the event, coupled with significant opposition from the Department of Sport seemed destined to deny Cork an event which the government's own commissioned analysis estimated would be worth hundreds of millions to the city and surrounding counties.

"Several sources, including some in government, told the Business Post in the days that followed that they believed the request was a way of rejecting the opportunity without officially doing so, as political backing within the coalition faltered.

"The expectation was that we'd be told to go away and forget it; Ireland are out of the process," one source said. "But that wasn't the response that came back."

"Instead, the organisers unexpectedly threw Ireland a lifeline by extending the bidding process. But will the Department of Sport make up its mind on whether the event is worth hosting in the time allowed and does Ireland even want its unexpected second chance?"

The fundamental problem seems to be that those in the Ministry of Sport seem to have little understanding of the America's Cup.

Not so much the sometimes arcane rules of the event, but not being familiar with the essential financial baselines – which are quite different from the contentious economic benefit projections.

The early warning signs were there when the price tag for the staging of the America's Cup increased almost daily from €150million to €200million and more - with some going as high as a whopping €600million (NZD$1.05billion).

Excessive Numbers

Monday's (September 20th) Irish Times carries a report that doesn't name sources but appears to be an attempt to justify a Review of the Ernst Young Review.

The Irish Times says its sources claim the first draft of the EY report stated a cost of up to €600million (NZD1.05billion) as the "cost of running the race (sic)."

That fantastical claim of €600million would have been sufficient to fund the design, build, team and competition costs of all four competing teams in Auckland, plus the infrastructure cost of the long-overdue renovation of the Auckland waterfront and the Event coverage.

The same source, in the Irish Times, claims a second draft of the EY report reduced the "cost" to a mere €300-€400million (NZD $500-$6.700million).

The government published costs of staging the 35th America's Cup in Bermuda and the 36th AC in Auckland are more like 10% of the reduced "second draft" figure.

The Irish Times' sources do not mention if a third and Final report from EY actually exists or if the second report was the Final.

America's Cup Event Ltd's Final Report (p68) on the 2021 America's Cup Regattas show a total event cost of NZD$45.14million or €27.06million – which included NZD$3million (E1.8million) for the AC75 design development. So where is the other several hundred million Euro being spent on AC37? Not on the running of what is usually a three or four-month-long regatta.

The more accurate picture is for a likely Host Fee of a very generous €50million for a conservative projection of €300million of economic benefit from spending by the teams, fans, media, superyachts, and regatta costs, plus collection of taxes and the value of hitting a massive TV and online audience - spread over a 12 month period, maybe longer.

The table below shows an infrastructure cost for Auckland was €142.8m (NZD$238.4m), making it a little difficult to see how costs of €300million are developed.

"Prada and COR invested over $150 million NZD in the 36th America’s Cup," the Challenger of Record wrote in the post regatta report, "a significant percentage of which went into the on-water and on-land operations and the Race Village, a vibrant and interesting place for the general public to mix and mingle and learn more about the America’s Cup and the history and development of the boats."

While it is easy to hypothesise about local spends and economic benefits, it is relatively for a Cup savvy analyst to calculate the likely actual spending. The spend categories, and local percentage, are known to someone familiar with the event and team budgets, along with the variants that applied to a specific event.

The widely varying amounts of Cup spend/cost suggest that they were compiled by people without America's Cup experience and cycle understanding.

Feeding the media

For reasons best known to themselves, it appears some Irish bureaucrats were apparently feeding the media an America's Cup cost that included several infrastructure projects that were already on the medium to long term planning budgets. Like in Auckland, they appear to have been brought forward as a "nice to have", but they are certainly not essential for a sailing regatta on Cork Harbour or outside on the Atlantic Ocean.

After the developments of the first three days of last week, it was surprising to learn on Friday that Ireland's top sailing administrator, Marcus Spillane, who lived in Cork until he moved to New York 12 years ago, had not been consulted at all on the America's Cup bid.

The Ministry of Foreign Affairs did draw on Ron Holland's knowledge, one of the world's top designers, who ran a 25 strong design office in County Cork for 40 years. Holland was one of the design triumvirate behind New Zealand's first America's Cup campaign in 1987. Ron Holland was the designer of Simon Coveney's father's offshore racers.

It is not clear where the Ministry of Sport got its information.

The last few weeks of the Irish bid have been characterised by the leaking of information from Ireland that could only have come from Government sources. But to be generous, let's just say they run a more transparent style of government than most.

It seems - based on media reports last weekend - that the Ernst Young report to assess the value of the America's Cup hosting was commissioned by the AC37 bid champion, Simon Coveney - Minister of Foreign Affairs and Defence.

According to media reports, the Irish Ministry of Sport was not a party to the commissioning of the EY report.

It now appears to be reasonably clear that the Irish Sports Ministry decided to spike the AC37 hosting by ordering their own Review into the EY Review - a tactic straight out of the Yes Minister textbook - which can be guaranteed to kill any project.

Reputation on the line

The Business Post quotes Ian Mallon, a sports consultant who worked on UEFA's planning of the multi-city European championships until this summer, as saying that Ireland's reputation as a host for international sporting events had suffered in recent months as a result of Euro 2020 games that didn't go ahead in Dublin, and now the America's Cup situation.

'With the Euros, it was very much a perceived intransigence", Mallon told the Business Post. "With this [the America's Cup], it is dithering in the extreme: asking for more time to do more feasibility studies when apparently they are in possession of one'.

"Those studies are important, but they should have been done and considered by this stage. It is that dithering will add to our global reputation as not only bad hosts but as hosts who can't even come to a decision that will ultimately be 'No'.

“That world of sports rights is small, they all know each other. This was here [for us]. You had a willing rights holder who wanted to award it to Ireland but that ball’s certainly been fumbled now.”

Cork keen

While the politicians may be confused, there is little doubt in Cork as to whether the Cup is a sound investment.

“You’ve got Ernst and Young, one of the biggest accountancy firms in the world, saying it’ll be worth €500 million, and some politicians are saying they don’t trust the workings that they’ve put together,” Eoin O’Sullivan, president of the Cork Business Association told the Business Post.

“If you spoke to the majority of the business community in Cork, you’d find that most of them don’t have any interest in sailing. But this is such a huge event. It would bring so many visitors to Cork, and it would put Cork on a global platform.”

Paula Cogan, a Cork business owner and the president of the Cork Chamber of Commerce, said businesses needed the opportunities offered by the competition, particularly after a gruelling 18 months.

“Post Covid, it would be such a plus for the region, and for Ireland, as well. The exposure it would offer, especially to businesses in hospitality and retail, would be priceless. We need to get Cork back on the international map.”

What happens next?

Probably more Meetings.

Watch this space.

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