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Oracle stages remarkable comeback, but it’s still New Zealand’s Cup

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While Oracle Team USA may have defended the America’s Cup, they hardly represented the United States as they chose to field only one American sailor. Meanwhile, it was truly a national effort for the Kiwis as even the government gave its support to the America’s Cup challengers, providing $36 million dollars in funding for the program to bring the cup back to Auckland. The people of New Zealand were equally responsible for making this storied competition happen. Not only did their tax dollars fund a large portion of the team that was made up of 80% Kiwis, but the marine industry in New Zealand developed and manufactured most of the innovative technology that was showcased in the cup.

Many New Zealanders have to be wondering about the future of Emirates Team New Zealand. With this latest effort turning out to be unsuccessful, the country will not receive the NZ$600 million dollar boost to the economy it has received in its previous two defenses of the cup. The program’s shortcoming poses a tough question to policymakers in New Zealand: do they continue to spend public money at a potentially unsuccessful program, in a time where the country is considering austerity measures in other areas of government?

The effects of an America’s Cup victory, and defense, are clear to tourism in New Zealand. Contributing about NZ$15 billion to the nation’s GDP annually, tourism in New Zealand has typically seen a 12.5% increase in international visitors when they have the cup. However, this industry has been known to struggle in the absence of the Auld Mug.Image

As you can see, tourism rates in New Zealand were booming after Team New Zealand successfully defended the cup in 2000. When they were unable to defend the cup in 2003, growth in the tourism sector became stagnant and was further decimated by the global recession.

Even though the Kiwis were unsuccessful in this past run, they received a great deal of press from competing for the America’s Cup. Domestically, nearly a quarter of the New Zealand population watched the first weekend of racing. The cup was also broadcast in over 170 countries, bringing exposure to an untold number of international viewers. The United States had over a million people watching each of the first two races. However, these numbers were short lived when viewers dropped from one million to about a quarter million viewers per race for the rest of the series. While Team New Zealand sponsors such as Emirates, Nespresso, Toyota, Omega and Camper expected a greater return in the US considering how much it cost to invest in an America’s Cup campaign, they may have gained the respect and admiration from the famously loyal New Zealand sailing community for making one of the most prestigious and thrilling events in America’s Cup history possible.

With global economic conditions seeming to improve as of late, press from the America’s Cup may have provided the push that will cause New Zealand’s tourism figures start to grow again. While they may not realize the same growth rates as the early 2000s, we’re hoping the New Zealand government will realize a great enough return to justify sponsoring another challenge.

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Rough Sailing for America’s Cup and Sponsor Louis Vuitton

ImageTwo months before competing catamarans are scheduled to set sail in the San Francisco Bay for the 34th defense of America’s Cup, the event seems to be in deep water.

Oracle Team USA’s Cup title defense, following a 2010 victory that was the first for an American team in nearly 20 years, was pegged as a groundbreaking affair that would generate an estimated $1.4 billion in the host the city of San Francisco.  The opening weekend of the Louis Vuitton Cup, however, shows little promise for the 2013 rendition of sailing’s finest venture.

The Louis Vuitton Cup is a round-robin tournament featuring global competitors vying for the right to sail against the American team for the America’s Cup crown.  Since 1980, between 7 and 13 teams have competed in this preliminary round.  This year’s version, however, has only produced 3 competitors: Italy’s Luna Rossa, Sweden’s Artemis Racing and Emirates Team New Zealand.  Countries such as France and Spain pulled out of the races, most citing lack of funding as the primary cause.

Following a boycott by the Italian team and an Artemis shipwreck, Emirates Team New Zealand raced to the finish in deserted waters twice over the weekend, earning the first two points of the Cup sailing unopposed.  Safe to say, L-V did not fork over $10 million in sponsorship fees for New Zealand to hold open practices on the bay.

After a rough start to the competition, the stylish French retailer and title sponsor is having second thoughts about its initial investment.  Hopefully they kept their receipt, because L-V is reportedly looking to receive a $3 million refund due to the poor international showing.  Contractually, they are eligible to receive a $1 million refund for every team below six in the tournament.  More teams could be on the way out too, leading to an even greater return to Louis Vuitton.

Sponsorship refunds are relatively unheard of, but this year’s America’s Cup may set the precedent for future sponsorship contracts.  Frankly, nobody expected the event to be such an epic flop.  If an event with as much history as America’s Cup can falter, so can others.  Moving forward, the turmoil in the San Francisco Bay will serve as a cautionary tale for prospective sponsors across the board.

Louis Vuitton has been a Cup sponsor for 30 years.  Prior to its sponsorship, the teams competing in the preliminary rounds were forced to divide the cost of the event among themselves.  Title sponsorship of events rarely leads to such a profound direct impact on the competition as in this case.  Louis Vuitton has been a driving force behind the Cup for decades, but their commitment seems to be wavering.  Maybe their long-term presence with the event led America’s Cup to feel comfortable enough to include contractual provisions allowing them to get some of the money they fronted returned to them.  But if they are able to run away from an unsuccessful sponsorship deal with millions of dollars stuffed back into their designer handbags, other companies may look to follow suit.

It remains to be seen if the Louis Vuitton Cup will prove to be a strange gem in sponsorship history or a frontiersman for protected deals in the future.  Either way, a quiet storm is brewing in the city by the bay.

What is your take on the concept of sponsorship refunds? Comment below and give us your thoughts!

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Live from Newport – America’s Cup a Real Possibility

With one days notice, the city of Newport has put together a pep-rally and support gathering today to bring the America’s Cup into town. Thousands have showed up to hear members of the venue selection committee and America’s Cup dignitaries talk to the press about the real possibility of Newport hosting the next America’s Cup.

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America’s Cup back in Newport!

Last Thursday was a very special day in Newport for sailors and tourists alike, as the famed America’s Cup trophy was on display just a few steps from the Performance Research office!   The America’s Cup is the oldest active trophy amongst all of sport, with a long and famed history involving Newport and the New York Yacht Club.

Below are a couple of pictures and you can check out more coverage at www.sailnewport.org.

The trophy was on display as part of a national tour from boat sponsors BMW and Oracle.

Speaking of sponsorship, click the link below to a Performance Research Independent Study highlighting the potential benefits of sponsoring an America’s Cup boat!

http://www.performanceresearch.com/americas-cup-sponsorship.htm

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PR Independent Research Study: The America’s Cup Ten Years Ago.

In light of the current running of the America’s Cup in Valencia, Spain, we decided to post one of our  Independent Studies regarding the worlds most prestigious race.  Check it out below and stay tuned for more………

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Log-Ons and Sponsors and Boats, Oh My!

Who knew sailors could surf?According to a nationwide study of sailing fans by Performance Research, over half (61%) of the America’s Cup audience reported logging on after almost every race and nearly three fourths (74%) followed the America’s Cup on the internet this year, a testament to the expanded internet coverage and the ever-increasing number of internet users. Virtual Spectator Limited (providing subscriptions to live on-line coverage of the America’s Cup) might be a good site to place your virtual bets with 45% of the fans commenting that they would be “Somewhat” or “Very likely” to pay for extended coverage such as Virtual Spectator during future America’s Cup defenses (19% of those surveyed signed on with Virtual Spectator to follow this year’s Cup).

Sponsors win even when boats lose. According to Nicole Alio, project manager for Performance Research U.S., “There seems to be an overall acceptance of and appreciation for the sponsors of this America’s Cup compared to the previous three defenses. I believe this approval is because fans are beginning to realize that corporate sponsorship is essential to creating a winning team and to bringing the Cup back to the United States. In fact, the vast majority of fans interviewed (81%) approved corporate sponsorship as “Essential to the overall success of the event”. Sponsors are not only becoming accepted by the fans but are seen as “More innovative” (62%) and “More interested in their customers” (53%) than their competitors as a result of their affiliation with the America’s Cup. There has been a steady increase in reported brand loyalty when comparing the results to a similar study conducted during the 1995 defense (34%) where now, nearly one half (44%) of the fans interviewed reported that they would “Almost always” or “Frequently” select America’s Cup sponsors’ products over those of non-sponsors.

Paul Cayard talks the talk and walks the walk. Even though the fans were somewhat evenly split among which U.S. syndicate they had originally hoped would make it to the finals, (America One 23% / Young America 27% / America True 18% / Star & Stripes 20% / Abaracadabara 3%), the performance of skipper Paul Cayard seemed to endear him as the future US representative. Sailing fans rated Paul Cayard highest (47%) as the America’s Cup personality they would most trust as a product endorser over other stalwarts including Dennis Conner (23%), Dawn Riley (33%) and Russell Couts (32%). Furthermore, three out of the seven most frequently recalled America’s Cup sponsors were affiliated with Paul Cayard and America One – Ford, Hewlett Packard, and SAIC. Citizen, Toyota, Italian syndicate sponsor Prada and Challenger series sponsor Louis Vuitton rounded out the top seven mentions. According to the fans, Paul Cayard is the man with the right message and image that sponsors should look to in the future.

The typical America’s Cup fan in this study was a male (66%) college graduate (84%) over 45 years of age (75%), with a total annual household income of $60,000 or more (83%).

Three hundred and four (304) telephone interviews were conducted nationwide among respondents who had watched at least two races on ESPN2 and/or had used the Internet at least once a week to follow the America’s Cup racing. One hundred (100) interviews were conducted during the Louis Vuitton Challenger Series 1/18/00-1/20/00. Two hundred and four (204) interviews were conducted after the conclusion of the finals 3/2/00-3/7/00. The margin of error is no more than + 6.

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Are you all excited?!!

This week represents one of the biggest and most diverse sporting weeks on the planet!

Last night we had a great kick off with the Super Bowl in Miami as New Orleans took the win over the Indianapolis Colts.  Then today launches the start of the Americas Cup race in Valencia, Spain, followed by the Winter Olympic opening ceremony from Vancouver on Friday.  Sunday caps off the week with the 52nd running of the Daytona 500 down in Florida.

Does it get any better for sports fan of all types?

Check out the links below for more details about each event:

The 33rd Americas Cup starts Feb. 8th

www.americascup.com

2010 Winter Olympics live from Vancouver on Feb 12th

www.vancouver2010.com

52nd Running of the Daytona 500 on Feb.14th

www.daytona500.com

Super Bowl Recap

www.superbowl.com

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