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America's Cup: Kiwi Home Defence launch 11th hour bid to stage AC37 in Auckland

by Richard Gladwell/Sail-World.com/nz 26 Feb 2022 15:21 PST 27 February 2022
Auckland's Viaduct Harbour venue for the 36th America's Cup © Carlo Borlenghi

The Kiwi Home Defence Group appears about to launch a concerted effort to stage the 37th America's Cup in Auckland.

Their 11th hour bid is believed to be assisted by Topham Guerin a creative digital agency, based in Auckland, but which is better known for the conduct of several PR campaigns for the likes of the British Conservative Party and Australian Liberal party.

The Kiwi Home Defence campaign contains several Youtube vignettes with high profile New Zealanders some of who have had direct connections with past America's Cups.

Radio and billboard advertising is already running.

The campaign comes as Emirates Team New Zealand is still negotiating with a short list of venues, which has not been officially disclosed. A final decision on the venue was expected to be announced in just over four weeks on March 31, 2022. Whether that date is achieved, is yet to be seen. The first venue announcement was set for last year, but was delayed as the Delta and then Omicron virus swept Europe.

Short video clips on the Kiwi Home Defence website play to the same theme of patriotism to have the 37th America's Cup defended in Auckland, and using the facilities built for the 36th Match, which were part of a planned rejuvenation program for the eyesores of the Auckland waterfront, and harbour environmental clean up.

The New Zealand Government and Auckland Council had a right of exclusive negotiation for a three month period following the successful defence of the America's Cup, but the Government offered a Hosting Fee - intended to cover some of the expenses of the regattas, that was $9million less than that offered for the 36th America's Cup. That was despite record viewership for AC36 and the preliminary Challenger Selection Series backed by Italian fashion house, Prada, who were also sponsors of the Italian Challenger Luna Rossa.

Relations between the team and Ministry of Business, Innovation and Employment (MBIE), the NZ government agency which handles major sporting events, were severely strained after a series of media salvos, driven out of Wellington, making some very negative claims about the Kiwi team, its management and directors. Those claims were later subject to an investigation conducted by a firm of forensic financial auditors, which dismissed all the claims made, save for noting that timesheets had not been kept for design time spent by the team on development the AC75 Class rule for which a $3million charge had been made.

Despite having an exclusive right of negotiation, and a plea by Royal New Zealand Yacht Squadron Commodore, Aaron Young, alerting members that the MBIE offer was below that required for the 37th America's Cup - the $31million offered was not increased, either with public or private money.

After the exclusive negotiation period expired Emirates Team New Zealand had no option left but to continue with the venue process started before the 36th America's Cup to identify a short-list of potential venues, to be picked up if the New Zealand team were successful in its Cup defence.

For an Auckland Defence, there still remains a substantial shortfall on the $200million Emirates Team New Zealand says it needs to mount a defence event in Auckland or anywhere else in the world, and run the team. That amount is similar to the team costs and event costs for the Prada Cup and America's Cup match at AC36. AC35 in Bermuda had an event cost of USD$65million or NZD$95million. ETNZ's team cost of NZD$120million is comparable with previous campaigns.

While various figures, and income streams are bandied about by others, ultimately the financial responsibility for the conduct of the America's Cup Defence rests with Emirates Team New Zealand, who have made it clear that they have little confidence in the reliability of the offers.

Since the NZ Govt/Auckland Council and Emirates Team NZ walked away from the exclusive negotiation process, the New Zealand Government has been quick to laud its financial success in weathering the COVID pandemic, which is well ahead of forecasts. However its the closed borders policy has come at a huge cost to the near-collapsed NZ tourism industry which now has just over 10% of its pre-COVID $17billion annual turnover. Currently New Zealand's border will remain closed to international visitors for another six months, and with no program announced to lift tourist and market share back to 2019 levels.

The NZ Government's actions have also hit the NZ marine industry hard, missing out of $300million of superyacht refit revenue from vessels booked to visit Auckland over AC36. The GST component of that expenditure would have covered the cost of the $40million Hosting Fee for AC36. Unlike other NZ sports, sailing and the America's Cup are a priceless shop window for the NZ marine industry which turns over $2.5billion each year.

Additionally downtown Auckland, adjacent to the former America's Cup village, now resembles a ghost-town due to several COVID related factors forcing businesses to close, coupled with the Auckland Council constructing a light rail system. Again it is difficult to understand why the NZ Govt and Auckland Council are not prepared to invest into an event which will offer a better return on investment than the expensive international marketing campaigns that will be needed by New Zealand Inc for its post-pandemic economic recovery.

At least six teams are expected to contest the 37th America's Cup.

Unlike the previous edition the Protocol requires the teams to be in the host country for an extended period, and the event is expected to return to a situation where the teams are operating out of the Match venue for 12 months - substantially increasing the venue-spend by the competing teams.

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