To the victor go the spoils. In the case of Oracle Team USA and the America's Cup, that includes holding the whip hand in the drawing up of the rules for the next running of the event. Ostensibly, this is done in concert with a challenger of record, which in the case of the 35th America's Cup, scheduled for 2017, is the Hamilton Island Yacht Club. But whatever the input of the Australian club, the process is doing Team New Zealand no favours. A $5 million grant from the Government designed to buy a little time secures the team's future only to the end of the month. But even at that date, questions which have a substantial bearing on whether a credible challenge can be mounted appear certain to remain unanswered.
Much of the difficulty stems from the lack of a set timeframe, venue, equipment or race format for the America's Cup. Every event is different, and potential challengers must spend a lengthy period in the dark while the protocol for the next regatta is drawn up. Some of that detail is expected to be released soon, making life a little easier for Team New Zealand's new five-man board, which must build a credible business case to attract corporate sponsorship and justify government funding. But its task will still be difficult because one important element, the venue, is likely to remain unknown.
Last year's regatta in San Francisco was a wonderful spectacle, but analyses indicate the city lost between US$5.5 million and US$11.5 million hosting it. The expected financial benefit also failed to materialise, in large part because the expected 15 teams shrank to four. San Francisco now wants a different deal with Oracle, including the payment of rent for venue space that was provided free last year. This has led Larry Ellison's team to cast its eyes elsewhere, including San Diego, Hawaii and Newport, the Cup's traditional home.
Given that the number of participating teams will be a key financial feature for any prospective venue, it might be expected that Oracle would be doing its utmost to help potential challengers. It is reasonable to suggest that it would pay special attention to Team New Zealand which, after all, has done so much to regenerate interest in the event. But aside from an indication that the next regatta is likely to feature 60ft foiling catamarans, a less expensive proposition than the 72ft catamarans used last time, there has been little outward sign that the concerns of prospective challengers feature highly.
It will be difficult to appeal to sponsors if they do not know where the regatta will be staged and, therefore, to what markets they will be exposed. That, in turn, will affect the Government's approach. It expects Team New Zealand to raise twice the amount it puts in, and that any public funding will be conditional on the syndicate raising a certain level of sponsorship. As matters stand, the Government is likely to be asked to add further to its initial $5 million grant to allow the syndicate to stay afloat a little longer. That is far from ideal. But the Government may feel it has no alternative, especially as an independent evaluation of the $36 million taxpayer funding spent on the last challenge found an estimated positive impact of $87 million to the economy.
