James Farmer

LEGAL COMMENTARY

America's Cup Part 3A

Monday, December 11, 2017

Last week, I expressed my concerns about the damage being done to Team New Zealand’s hard won reputation because of the coincidental request by it of the Government and/or the Auckland Council for a “hosting fee” for the holding of the next America’s Cup Event in Auckland and the revelation (by TNZ) that it had been offered over $100 million by Abu Dhabi and by Sochi in Russia (neither being noted for premium yacht racing) to shift the Event to their location.  The Mayor of Auckland was reported as saying that the request for a fee (over and above the funding of the infrastructure costs of holding the Event expected to be between $140 million and $190 million) “came out of left field” and was mentioned by Grant Dalton for the first time on 19 November.

The public reaction was swift and adverse with suggestions that if TNZ took the Cup offshore this would be a betrayal of the New Zealand public which had given huge support to the efforts to “bring the Cup home” and, through their taxes, very substantial sums over the past 14 years totalling more than $50 million.

Knowing as I do many of the TNZ people and having worked with them for 10 years from 2004 to 2013, I refused to believe that this would occur but suggested that TNZ should come out promptly with a denial of any intention to hold the Cup anywhere but in Auckland.  (I ignore the somewhat bizarre visit by TNZ management to Tauranga and choose to view it as a courtesy call only rather than as an ill-judged attempt to persuade Auckland City to loosen its purse strings.)

Rare media attention to my blog was followed by an uncanny silence from TNZ, which only served to add some credibility to the view of an increasing number of people that there was truth in the prospect of the Cup going to the highest bidder or, if not, that TNZ was following a strategy of disseminating misinformation with a view to putting pressure on the Government or the Council to pay the requested hosting fee.  The Herald on Sunday reported that TNZ declined to comment because the “damage was already done” by the reporting of my column. Odd to say the least, given that it was the damage that TNZ was doing to its own reputation (and of its directors) by demanding a hosting fee, while revealing that it was receiving these offers from foreign cities, that motivated me to plead with them to issue an immediate public denial.

However, there has now been a happy ending, albeit one that took 6 days to achieve.  The Sunday Star Times has published an interview with Grant Dalton under the heading “Dalton hits back, vows to keep the Cup in NZ”.  That is truly great and hopefully faith in TNZ will quickly be restored.

What remains unclear is what a hosting fee (if paid) would be used for.  Its origin was said to be moneys paid to the Defender (Alinghi) by the City of Valencia (over and above the huge infrastructure costs incurred by the City to establish the bases and related facilities).  Just what those moneys were applied to is not entirely clear but what is clear is that the operating costs of the Event in Valencia were principally met by commercial sponsors such as Louis Vuitton.

The Sunday Star Times Dalton interview focuses on the costs of staging the Event.  Dalton says in that interview that the fee was never sought for TNZ but was to cover the costs of the Event.  If that is right, then what needs to be addressed is the question of commercial sponsorship.  Louis Vuitton, which complained through an arbitration process of its treatment by Oracle, on past history may be keen to play a major sponsorship role in the funding of the Event. If not, Prada itself or other major manufacturers can be expected to take the lead Event sponsorship role.  There will, again on past history, be others who will not be willing to sponsor a team but who will want their names associated with the Event.  That makes the request now for a fee to be paid by central and/or local government for those costs to be premature until a serious effort has been made to obtain commercial Event sponsorship.

TNZ will of course have its own sponsorship exercise to undertake to fund itself.  Against the background of past strong criticisms by it of the costs of previous events, particularly in the Alinghi/Oracle era, the costs of a 2 boat programme of a new, concept, foiling monohull is something that will obviously be of interest to all potential entrants but should also be of interest to stakeholders in New Zealand if those costs have the effect of reducing the number of entrants and limiting therefore the expected financial gains arising to New Zealand for the staging of the Event.

One would expect that the Protocol confers on TNZ the right to change the boat to something more conventional if the projected costs of developing what at the moment is not a reality should prove to be prohibitive.  Much is made of the estimated speed of a foiling 75 foot monohull but most of the excitement that the previous AC monohulls (now regarded as dinosaurs) generated came from the closeness of the racing and the accompanying tactics.

The Herald on Sunday makes the cryptic point that “the America’s Cup runneth over with challenges”.  Yes it does.  Whatever decisions TNZ makes will generate critics.  Accountability is the inevitable burden of any entity that is the recipient of public moneys.  But one thing that TNZ does have going for it is the outstanding effort that its designers, sailors and shore crew achieved in bringing the Cup back to New Zealand.  If it plays with a straight bat the public support will assuredly be there.

Jim Farmer

11 December 2017

Recent Posts

  1. Directors’ Duties to Creditors in an Insolvency Situation 22-Sep-2023
  2. Redundancy, Good faith and Employment Law 18-Aug-2023
  3. Is the America's Cup a poisoned chalice for New Zealand? 09-May-2023
  4. The Passing of Two Knights of the Realm - Sir Murray Halberg and Sir Ian Barker 07-Dec-2022
  5. Random Legal Thoughts While on a Post-Covid Lockdown European Trip 31-Oct-2022
  6. America's Cup Venue - Fact or Fiction Chris Goode 04-Apr-2022
  7. Covid and the New Zealand Rules Committee Proposed Reforms Chris Goode 24-Jan-2022
  8. A Chat On The Virtual Couch About My Legal Career Chris Goode 26-Nov-2021
  9. America’s Cup Home Defence – Requisition For Special General Meeting Of Members Of Royal New Zealand Yacht Squadron To Discuss Venue For Next Defence Chris Goode 24-Nov-2021
  10. Pandemics 12-Nov-2021
  11. America's Cup - Just Do It and Positivity 20-Sep-2021
  12. September 11 - 20 Years On 09-Sep-2021
  13. Whither America's Cup? Chris Goode 22-Jun-2021
  14. Conducting Civil Appeals Chris Goode 07-Mar-2021
  15. David Barnes (27 April 1958 - 23 October 2020) - A Personal Note Chris Goode 02-Nov-2020
  16. Cannabis Bill Not the Right Reform Chris Goode 07-Oct-2020
  17. Whatever the result, is this the last time the America's Cup event is held in New Zealand? Chris Goode 14-Sep-2020
  18. Cannabis Legal Reform - Arguments For and Against Chris Goode 13-Aug-2020
  19. Will the Proposed Cannabis Legislation Achieve its "Overarching Objective" of Reducing the Harms Associated with Cannabis Use? Chris Goode 18-May-2020
  20. The Debate Continues - Virtual Hearings or Real Hearings Chris Goode 02-May-2020
  21. These Issues were all Predicted Pre-Covid-19 and 6 Years Ago Chris Goode 02-May-2020
  22. And here is a Report from Stuff of a Virtual Hearing this Week Chris Goode 30-Apr-2020
  23. More Correspondence on Covid-19 and the Courts Chris Goode 30-Apr-2020
  24. In Defence of Remote Technology - from Steve Keall Chris Goode 29-Apr-2020
  25. Court Hearings and Covid-19 - Part Two Chris Goode 29-Apr-2020
  26. Court Hearings and Covid-19 Chris Goode 28-Apr-2020
  27. Covid-19 and Executory Contracts: Will the Doctrine of Frustration Apply? Chris Goode 06-Apr-2020
  28. Race, Poverty and Education - Lessons from the UK learned while spending Christmas in London December 2019 Chris Goode 13-Jan-2020
  29. Witnesses in Civil Cases - the Consequences of Not Calling and of Not Cross-Examining - A Paper Presented to the Pacific Islands Lawyers Association, Auckland, 22 November 2019 Chris Goode 21-Nov-2019
  30. The Forthcoming Referendum on the Growing and Supply of Cannabis for Personal Recreational Use Chris Goode 19-Nov-2018
  31. Armistice Day and Its Sequel Chris Goode 13-Nov-2018
  32. An Easy Read of the Rule of Law in the World of Fiction Chris Goode 08-Aug-2018
  33. Bullying, Harassment and Gender Bias Chris Goode 22-May-2018
  34. Criticising Judges Chris Goode 07-May-2018
  35. America's Cup Part 3A Chris Goode 11-Dec-2017
  36. America's Cup Part 3 Chris Goode 04-Dec-2017
  37. Pro Bono Publico as an Aid to Living a Balanced Lifestyle Chris Goode 08-Nov-2017
  38. Terence Arnold Retires From the Supreme Court Bench Chris Goode 10-Apr-2017
  39. From Violence to Redemption Chris Goode 14-Mar-2017
  40. Drugs, Sports and Society Chris Goode 18-Oct-2016
  41. Are Our Law Schools Churning Out Too Many Lawyers? Chris Goode 25-Aug-2016
  42. Equiticorp 20 Years On Chris Goode 07-Jun-2016
  43. The Year in Retrospect Chris Goode 19-Jan-2016
  44. A Good Year for the Farmer Legal Family Chris Goode 30-Oct-2015
  45. Having a Balanced Life Style - Part 4 Chris Goode 21-Sep-2015
  46. A Balanced Life Style (Part 3), Prisoners' Voting Rights, Top Gun, 7000kms in a Corvette, John Maynard Keynes and Atticus Finch Chris Goode 05-Aug-2015
  47. Biographies Chris Goode 13-Apr-2015
  48. The Cost of Justice Chris Goode 13-Mar-2015
  49. The Increase in Unrepresented Litigants and Their Effect on the Judicial Process Chris Goode 11-Feb-2015
  50. Evidence - Notes of Presentation to Continuing Legal Education Seminar November 2014 Chris Goode 01-Dec-2014
  51. Corporate Governance and Directors' Liability Chris Goode 19-Aug-2014
  52. Paper Presented on 2 August 2014 at the Competition Law & Policy Institute of New Zealand 25th Annual Conference Chris Goode 05-Aug-2014
  53. Life in the Fast Lane Chris Goode 06-Jun-2014
  54. 2014 - Roaring Past Chris Goode 04-Jun-2014
  55. Commentary on Paper Delivered by Professor Andrew I Gavil at Commerce Commission Conference Chris Goode 18-Nov-2013
  56. America's Cup Wrap Up Chris Goode 04-Oct-2013
  57. Happiness, Living a Balanced Life and Legal Practice - Part II Chris Goode 15-Aug-2013
  58. America's Cup 2013 Chris Goode 01-Jul-2013
  59. Why the Rules of Evidence Matter in Civil Cases Chris Goode 11-Mar-2013
  60. The High Court in Review Chris Goode 07-Oct-2012
  61. "Criticism of Supreme Court needs to be put in context" as published in the New Zealand Herald 11 May 2012 Chris Goode 23-May-2012
  62. Recent Reform Reports Chris Goode 03-Apr-2012
  63. Happiness, Living a Balanced Life and Legal Practice Chris Goode 09-Jan-2012
  64. In Defence of the Supreme Court Chris Goode 12-Dec-2011
  65. LEGAL COMMENTARY HOW GOOD IS OUR SUPREME COURT? Chris Goode 16-Nov-2011
  66. Cross Examination Notes Chris Goode 11-Nov-2011
  67. Are the independence of the Judiciary and the Rule of Law under threat? Chris Goode 16-Oct-2011
  68. Commentary on my commentary on Morse Chris Goode 14-Sep-2011
  69. The passing of three leaders of the Bar Chris Goode 14-Sep-2011
  70. How good is our Supreme Court? Chris Goode 08-Aug-2011

Georgia Racing

Website Managed by Generate Design