Is our cup worth the money? Ask Alaska

By JAN CORBERT and JAMES GARDINER

Nestled on the shores of the Arctic Ocean, at the northern-most point of Alaska, is an Inuit village called Barrow. Population: 4000. Temperature: somewhere below freezing, except in the kitchen of the local Mexican restaurant, Pepes North of the Border.

Here among the tacos and burritos, the 71-year-old American proprietor, Fran Pate, keeps the television running because she's sport mad.

Does she know where New Zealand is?

Down there by Australia.

Heard of the America's Cup?

And just as the television advertisement suggests, the answer is: Sure.

"That Italian sailor was injured the other day. I'm not that keen on the Italians. I'm rooting for the Kiwis, I think they're much more talented and experienced."

Has it made her want to visit New Zealand?

"No," comes the bemused reply, along with the explanation that she is probably the only one in the village watching the Cup.

But here in New Zealand, ever since Michael Fay and his deft public relations agents launched America's Cup fever, we have believed it is in our economic interests to pour public money into the sport.

If watching a couple of boats duel their way around the Hauraki Gulf will entice enough Fran Pates around the world to buy a half kilogram of New Zealand butter, a leg of lamb or even to take a holiday here, maybe we can all look forward to being superyacht owners.

So while we were being asked to blow into Team New Zealand's sails, how much was it taking out of our pockets?

Team New Zealand won't talk about its budget. Estimates range from $40 million to $50 million, but it could be more. Prada's campaign is said to be costing $100 million.

Two of Team NZ's sponsors, Television One and Lotto, are state owned and sales of red socks are a form of public donation.

Although TVOne reportedly contributed $20 million to winning the Cup in San Diego, these days the state broadcaster won't talk numbers, citing commercial sensitivity.

TVNZ spokesman Liam Jeory goes some way to describing the symbiosis.

"The sponsors put the money in. Some of the money goes to Team New Zealand, some buys exposure on TVNZ so that in return for their sponsorship they get guaranteed exposure."

In separate negotiations, TVNZ won the right to be host broadcaster for the Louis Vuitton Cup and the America's Cup, for which it is paid by the challengers' association and AC 2000, the company running the Cup.

That coverage is sold around the world and TVNZ had to in turn bid for - and pay for - the right to screen it.

With so many deals involving the same players wearing different hats, the secrecy surrounding the details is perhaps not surprising.

The Herald has been told the lion's share of TVNZ's contribution as a sponsor was in the guaranteed exposure it offered the other sponsors, rather than cash.

"At the end of the day it all works," says Jeory, "and you get an event like we've got now. It's a way that a very small country and a very small economy is able to fund a very large sport, and everyone gains as a result."

The Lotteries Commission has a less complicated but equally confidential sponsorship deal.

Spokeswoman Lesley Meadows says it is pleased with the result. More lottery tickets are sold on the weekends when there is racing and research is telling them the customers believe the America's Cup is good for the country, good for sport and good for business.

One thing is certain. Only two of the "family of five," as the sponsors call themselves, are on board for the international exposure - Steinlager and Toyota. Telecom, Lotto and TVOne all operate domestically.

Auckland ratepayers and taxpayers have borne the cost of creating a billionaires' playground at the Viaduct Harbour.

Infrastructure Auckland chipped in $75.7 million to build the village facilities; taxpayers added a further $10 million.

If Auckland City then buys the development, its ratepayers will be effectively paying twice.

They have already spent $40 million buying property, laying pathways, building seawalls, planting trees and improving the sewage system for the harbour and Cup village.

AC 2000 Ltd got $2 million from the Government, half of it from the Millennium Office marketing budget, the other half from the Tourism Board for the right to use Cup insignia in its campaigns.

Put 40,000 people out in their boats to watch the racing on a fine weekend and some crowd control will be essential. The police budget was boosted by $4 million to buy and operate 11 new speedboats. The plan is to sell them after the regatta.

The volunteer coastguard has a $65,000 budget to have 20 to 30 boats out with the spectator fleet.

It relies on subscriptions and donations to provide its rescue service, but has not been given any money by anyone associated with the Cup. It has received some money from the Hillary Commission and two local bodies.

New Zealanders trying to do business in Italy might argue the public expenditure has been worth it.

About 160km north of Rome, is the town of Perugia, where New Zealander Philippa Newman has lived with her Italian husband and children for nine years. She says Italians are staying up all night to watch the races.

"Everyone is enthusiastic even though they don't know much about yachting."

New Zealand's Trade Commissioner in Milan, Charles Barkla, says coverage in Italy has been "heartwarmingly kind, positive and massive."

He, Trade NZ staff and even the New Zealand Ambassador, Peter Bennett, have been invited onto television chat shows.

Mr Barkla predicts the benefit will be long term.

Italy does not rank highly as a source of tourists to this country, but the Tourism Board expects growth.

In France, yachting - a sport once shunned by many as elitist - has been embraced with fervour. The daily newspaper Liberation has sent a correspondent to Auckland to cover the entire event.

One TV channel, TF1, is running nightly five-minute bulletins; on the other four national channels, sports shows include lengthy coverage.

But in the United States, perhaps predictably, the interest died with the American challenges.

"It's hard for us to get too excited about a race between Italians and Kiwis on the other side of the world," said one CBS news producer. "Where's our angle for an American audience?"

Delayed satellite coverage is available on the ESPN cable network late at night. Newspapers have run features and occasional wire service photos.

In Australia, the Cup may take a take a back seat to cricket, footie, golf and the Socceroos' tour of Europe, but it still gets reasonable cover from all media ... although commercial radio has tended to bracket the Kiwi wins with the hammering the Aussies are dishing out to our cricketers.

* Additional reporting by Herald correspondents Greg Ansley, Catherine Field and Roger Franklin.