America’s Cup: Valencia back as a potential site

America’s Cup: Valencia back as potential venue – but with study

by Richard Gladwell / Sail-World NZ Oct 15 2:22 PM PDT
October 16, 2021

A report in Spanish media indicates that a new bid from Valencia, Spain is being developed to host the 37th America’s Cup.

The original group promoting the 2007/10 Cup site for reuse in 2024 abruptly withdrew, a week before the AC37 site was announced on September 17, saying the Spanish government would not support financially his candidacy.

According to information published Thursday in the Spanish media, the vice-mayor of Valencia, Sandra Gómez, spokesperson for the PSPV-PSOE, the socialist party of the region of Valencia, “pleaded in favor of a public-private collaboration” to host the 37th America’s Cup.

Speaking over a breakfast to announce his return to “municipal activity after maternity leave,” Gómez said “informal contacts” had been made and they were awaiting a proposal from Real Club Nautico of Valencia to “present a study”. Whether it’s a reference to a formal proposal, or if it’s also part of a “return on investment” study – at this point the parties would make a decision and approve or deny.

Sports Minister Pilar Bernabé, also a member of the Socialist Party, indicated that the government was ready to integrate the existing infrastructure already developed for the America’s Cup 2007. But this was on condition that private and commercial interests could work together to pay hosting costs. She said the Council’s costs were expected to run into the hundreds of thousands of euros, not millions.

Since the Valencian infrastructure is already in place and the costs are absorbed, if the business parties can see how to make their investment giving them a positive return (rather than for the region as a whole), then the offer can be viable.

The application process for the AC37 site opened in late 2020 and closed ahead of the 36th America’s Cup game in early March 2021. Since then, the 35 expressions have been reduced to just three to five – namely Valencia, Jeddah and Cork. Barcelona were a surprise late entry, and Auckland remains on the line, although the New Zealand government was unable to successfully negotiate a deal during their exclusive three-month period, which ended on June 17, 2021.

The elephant in the room is still the impact assessment report, commissioned on behalf of the New Zealand government, which claimed the ridiculous cost of the 36th America’s Cup was NZ $ 774 million.

The New Zealand report said it was not developed using conventional accounting methods, used for all previous cuts, but rather assessed the economic values ​​of various elements, tangible and intangible. It also charged the full cost of the infrastructure used for the 2021 Cup, as well as nearly $ 100 million of public works such as new stormwater systems fed from surrounding wealthy suburbs, ferry terminals relocated and repair work on an abandoned fuel tank farm, all of which were budgeted Council projects. A second report by AC36’s other partner, Auckland Council, compiled using conventional accounting principles correctly separated the costs of new infrastructure assets. A third report by America’s Cup Event Ltd, also compiled using accepted accounting conventions, estimated the operating costs of the regatta at $ 45 million (€ 27 million).

A more credible impact study for the previous America’s Cup, in Bermuda, prepared by international consultancy firm PWC using accepted financial principles, showed a return of more than $ 5 for every $ 1 invested by the Bermuda government . The infrastructure costs in Bermuda have been borne by a private company for historical use, under an agreement guaranteed by the Bermuda government.

The New Zealand government report also significantly undervalued the AC36 TV show compared to Bermuda.

The New Zealand report claimed to have used the same method (equivalent advertising value) as that used for Bermuda, with a value of just $ 5.3 million for Auckland using an audience of 68.2 million viewers, while that PWC calculated the value at NZ $ 115 million for a smaller audience of 51 million viewers. Both calculations focused only on the value for tourism. The New Zealand report made no mention of the opportunity cost of maintaining the $ 300 million superyachts. This loss of income was the result of the rejection of the entry of 110 superyachts into New Zealand, which had paid berth deposits, which were refunded.

It is understood that at present, most of the named sites have relaunched the offers under review, given the new business environment as economies seek a post-COVID recovery path.

However, rather than being given an extra time, as some are asking, it is now believed that the first acceptable proposal will be advertised as the preferred venue, followed by a two-month process leading to a signed hospitality agreement covering the 37th America’s Cup.

Emirates Team NZ cup holders have previously announced that design work has started on the development of a 40-foot version of the AC75 sail-foiled monohull. The AC40 will be used for the preliminary regattas between 2023 and 2024. ETNZ also announced that they have completed the design work for the hydrogen pursuit boats that will be used in the Cup, and the regatta is expected to have a very good eco user-friendly image, making it attractive to team and event sponsors.

The protocol, or rules governing the 37th America’s Cup, is believed to be in the final stages of negotiation and will be announced as scheduled on November 17, 2021.