Government commits initial $5.6 million to Team New Zealand

8.00am

Team New Zealand will get an initial $5.6 million from the Government to allow contracts to be signed with key members, Minister for the America's Cup Trevor Mallard said today.

Mr Mallard said that without the money Team New Zealand could lose "human capital and intellectual property".

"If this happens, all our best sailing, design and boat building talent will be forced to join foreign syndicates and related industries, which would be a tragedy for New Zealand yachting and for New Zealand. We don't want to see that happen," he said.

Mr Mallard said discussions with Team New Zealand were continuing and the Government would not be in a position to confirm a final figure on how much it would give the team for several months.

A challenge in Europe in 2007 was likely to cost more than $120 million.

Mr Mallard said the Government's final contribution would depend on an assessment of the potential economic benefits to New Zealand from the Europe regatta.

"It will also depend on Team New Zealand's ability to raise substantial funding from the private sector, both from here and overseas, to mount a credible challenge."

Swiss syndicate Alinghi beat Team New Zealand 5-0 in America's Cup racing in Auckland.

Mr Mallard said the Government was confident the next America's Cup would provide an opportunity for New Zealand to develop and expand on trade and tourism created over the past eight years since Team New Zealand won the cup.

"The Louis Vuitton and America's Cup regattas have highlighted New Zealand's strengths in the areas of boat and sail design and boat building, and drawn attention to New Zealand as a perfect destination for high value tourism.

"We are sure that Team New Zealand is the right vehicle for New Zealand to leverage off the America's Cup again.

"That's because the next America's Cup regatta, the first to be held in Europe, is likely to be the biggest in the history of the event both in terms of the number of challengers and the public and media interest," Mr Mallard said.

Team New Zealand believed it had a young, developing team that was capable of regaining the cup.

However, he said, the amount of work needed to mount a challenge should not be underestimated.

Team New Zealand's ability to secure new sponsors would be affected by competition from rival syndicates in the northern hemisphere.

Mr Mallard said the Government's final contribution would be small in comparison to the overall cost of mounting a challenge.

"This initial investment will provide Team New Zealand with some financial certainty early to assist with their build-up and planning for the next event."

- NZPA

Further reading: nzherald.co.nz/americascup