Oct. 21 (Bloomberg) -- Team New Zealand, which was defeated in last month’s America’s Cup challenge by Oracle Team USA, is getting a lifeline from the government in a tentative step toward helping fund another campaign.
The government will provide NZ$5 million ($4 million) in interim funding for the team so that it can retain key members while a decision is made on another challenge, Economic Development Minister Steven Joyce said in a statement today. The funding will help secure important staff until May next year, “by which time Team New Zealand plans to finalize a decision on its involvement in the next regatta,” Joyce said.
The government invested NZ$36 million in Team New Zealand’s last challenge, and Prime Minister John Key had said it was unlikely to help again unless the America’s Cup was won in San Francisco. The New Zealanders lost 9-8 after leading the first-to-nine points regatta 8-1 as Oracle, financed by billionaire Larry Ellison, put together the biggest comeback in the event’s history.
The defeat dashed New Zealand’s hopes of hosting a title defense worth hundreds of millions of dollars and put in doubt its future involvement in the 162-year-old sailing contest, which is usually held every four to five years.
Team New Zealand Managing Director Grant Dalton questioned whether the syndicate, which also relied on corporate and private sponsors to mount its $100 million challenge, could continue. “It will be difficult for the team to stay together, particularly financially,” he said at the time.
“The 2013 America’s Cup was a great demonstration of the talent and innovation that New Zealand holds within its marine and technology sectors,” Joyce said today. “It also provided a very high profile for New Zealand expertise and innovation in the world’s largest economy. We are keen to retain the knowledge and skills of the team for a further challenge, should that prove feasible.”
Joyce and Team New Zealand are waiting on details of where the next regatta will be sailed and what sort of yachts will be needed before making a commitment to compete. The government also wants to see an economic assessment of the benefits from the previous investment, Joyce said.
New Zealand first won the Auld Mug, as the America’s Cup is known, in San Diego in 1995 with the yacht “Black Magic.” Its title defense in Auckland in 2000 and subsequent loss to Switzerland’s Alinghi in 2003 were worth about NZ$500 million each, according to impact studies conducted by Market Economics.
Ellison, who is the eighth-richest person in the world according to the Bloomberg Billionaires Index, has said he’d like to get more countries involved in the next challenge and may look at using less expensive boats.
The San Francisco series used AC72 boats -- 72-foot (22-meter) catamarans with carbon-fiber sails that are bigger than the wing on a Boeing Co. 747 jet.
“The America’s Cup without New Zealand is just impossible to conceive,” Ellison said after defending the Cup. “I think they’re going to be back.”
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