America's Cup hosting: Government warns times are tight

The government is open to discussions around the next America's Cup being hosted in New Zealand, but is warning economic times are tight, and it may not be high on its priority list.

Emirates Team New Zealand resoundingly defended the Auld Mug with a 7-2 win over Ineos Britannia in Barcelona over the weekend. The city hosted the 2024 race after Team New Zealand rejected a bid from the New Zealand government and Auckland Council in 2021.

The champagne had barely lost its fizz before talks turned to the likelihood of the next defence being mounted back in New Zealand.

"I'd love to see the America's Cup hosted in New Zealand again, not only because the Hauraki Gulf is a spectacular setting for the regatta but also because of the economic benefits that come from hosting an event of that magnitude," Labour leader Chris Hipkins said.

Former prime minister Helen Clark, who is the team's patron, said there has been "tremendous interest" in Barcelona and there seemed to have been thousands of Kiwis at the final few races.

It had stirred "enormous passion" among Kiwi spectators and she observed at the prize-giving last night that local and provincial authorities were "all over it".

"Barcelona took it on, I understand, because it saw the economic benefit and wanted to revive their city and its economy. They seem pretty pleased with the way it has gone."

While New Zealand got the benefits of new boatbuilding orders due to publicity from the event, it would miss out on the main advantages if it did not host, such as tourists, visits by superyachts and their wealthy owners and the presence of the challengers for months on end.

"You don't get the opportunity to bring people, to showcase your industry, your wine and food, your tourism, your design innovation."

Clark said some of that could be offered offshore and she recalled during her time as prime minister visiting Valencia where the America's Cup was being held and New Zealand took the chance to promote its trade and "a lot of leverage" was applied for the benefit of the private sector.

"It's a pity to see no leverage this time ...I think we need to rethink this so that we can leverage from our incredible success in this area."

When it came to allocating hosting rights for the next event, Team New Zealand would be weighing up the funding needed to ensure it could run a successful event, as well as having enough to invest in the technology and design of the boat and the team itself.

"There's probably not a lot of time for decisions to be made so if New Zealand were to be interested then we'd probably have to be working on it pretty quickly."

Clark said over at least three cups New Zealand had hosted, it had proved its worth.

"We need that kind of boost again if we're going for growth."

'A fantastic time to put ourselves out there'

Meanwhile, Heart of the City, Auckland's city centre business association, said it would bring multiple benefits, especially with the amount of major construction in Auckland completed or due to be completed soon.

"It will be a fantastic time to put ourselves out there and showcase internationally, bring people here, bring investment here, and look outwards again," chief executive Viv Beck said.

Sports and Recreation Minister Chris Bishop said any decisions around where and when the next Cup was held were ultimately over to Team New Zealand.

"The government is obviously open to a discussion around the event being held in New Zealand. Any government support would need to be assessed against many other competing priorities in these tight economic times, and demonstrate clear value for money and economic benefits."

Auckland mayor Wayne Brown said it was premature to talk about whether Auckland would host the Cup next time around.

"It's not a decision for Council... though it would have been helpful to have had a clause in the last contract stipulating the next one must be in Auckland in the event of a win," he said in a post on X.

Congratulations to Team NZ. This is a very exciting moment in our nation's sporting history and I'm sure it will make many people very proud.

It's a bit premature just yet to talk about whether Auckland will host the cup next time round. Let's just enjoy the moment.

In reality,… pic.twitter.com/mS60bhqV4c

— Mayor Wayne Brown (@MayorWayneBrown) October 19, 2024

Brown said there was no cash available for hosting, and the council would need the hotel bed levy in place.

A Local Government New Zealand poll, conducted by Curia in May, found 58 percent of people believed such a levy would make councils more effective.

"We need the government to get on and amend regulations to allow this. It can be done - and I'll keep pushing the case," Brown said.

Heart of the City supported such a move.

"We definitely need to find a sustainable way to attract major events here. We don't have a pipeline, we need one, and we are supportive of the bed tax," Beck said.

"One of the things that would be good is if this is a catalyst to actually get it moving faster.

"Auckland has certainly been saying that they're wanting it sooner, and in a way it's being held up because there's an argument to say it needs to be national. But the reality is, if it could be sped up as one part of a mechanism to try and support a major event like this, that would be great."

ACT leader David Seymour cautioned against using a sporting victory as a launchpad to lobby for policy change.

"It does seem a little opportunistic that at the same time as their moment of victory, the chorus of voices for the government to give them money suddenly pops up too," he said.

"I think if you look at where the government finances are at, especially in regards to trying to get roads built, hospitals, core infrastructure for cities, I think it's a pretty challenging task to say hosting a yacht race should be on the priority list."

Seymour said while there was no question it would be a lot of fun to host the America's Cup, and nearby businesses would do well, it was not the core role of the government.

"If it came down to 'are we going to manage a bit of extra capacity at Dunedin Hospital or are we going to fund a yacht race,' I think we'd be going with the hospital."

In an interview with Sunday Morning, yachting expert Mark Orams said it was unlikely the event would return to New Zealand.

"I think it's extremely unlikely. It's unfortunate ... but the reality is the the ability to raise the money, to be able to be competitive in this environment is very difficult, from New Zealand and what [Team NZ chief executive] Grant Dalton and [chief operating officer] Kevin Shoebridge have to do is to try and raise close to $200 million, and that's extremely difficult," he said.

In 2021, Team New Zealand and the Royal New Zealand Yacht Squadron decided the 2024 Cup would be held in Barcelona, saying the $99m bid from the then-government and Auckland Council to keep the regatta in Auckland was not enough.

Last week, Hipkins said the Labour government was willing to go to a certain level, but Team New Zealand went beyond that.

"I thought the offer that we made them was a very reasonable offer, and would have made New Zealand very competitive. They decided otherwise."

Spanish media has reported the successful bid was €70m ($125m NZD), with the Barcelona council contributing €10m ($18m NZD).

Beck said if the Barcelona event was being held in Auckland right now, it would have been just the tonic the city needed.

"Covid knocked us, we've had all of that construction, the cost of living impacts now, I mean an event like that, bringing all that international focus and all those people here ... if you think how many people we had here in the last one, obviously the economic benefits weren't here because of the closed borders, but the reality was it was still a pretty fabulous experience for those who got to be here. So I think it's worth a decent effort to try."

Auckland last hosted the race in March 2021, during the Covid-19 pandemic. New Zealand made a $156 million loss from hosting the event.

In 2017, MBIE had forecast that for every dollar invested, the economy would benefit between $1 and $1.14. But an evaluation report released in 2021 showed for every dollar spent, 28 cents was lost.

The loss was put down to higher than projected public investment, few international visitors, and only three of the potential 10 challengers racing.

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.