Saturday, 15 September 2007

America's Cup - ACM Share (Some Of?) The Love

ACM has today posted a release concerning the distributed profits from the 32nd America's Cup.

The Afterguard has one observation. As detailed in point 7. of the release, ACM have closed the accounts of the 32nd America's Cup to expedite the payment of proceeds to the challenging teams (which may or may not provide more of the fence-sitters with the funds required to formally challenge for the 33rd America's Cup); With the 32nd America's Cup Online Auction yet to finish, wouldn't it have been better to wait until the income generated was known? Or isn't the divestment of ACM's assets a contributory factor? Closed accounts would suggest that by some calculation the income generated isn't being divided amongst the interested parties.

The release can be read on the America's Cup website, Here.

The 32nd America’s Cup competitors receive their share of EUR 66.5 million profit

AC Management (ACM), organiser of the 32nd America’s Cup, distributes 90% of the EUR 66.5 millions net surplus the event generated over the past four years to participating teams. This will help teams prepare for the 33rd America’s Cup which is to take place in 2009.

By creating a single structure managing both the Challenger Selection Series and the America’s Cup Match and by developing a professional marketing strategy, the organisers of the 32nd America’s Cup succeeded in creating a net surplus to be shared with all competitors of the 32nd event.

This EUR 66.5 million surplus comes from a total revenue of EUR 240 million, generated largely through the city bid and the four year sponsorship programme, but also through TV rights, the hospitality programme and the concessions and marinas of Port America’s Cup.

“This is a significant result and by providing the funds to the teams now, we aim to help them prepare their 33rd campaign, while also giving continuity to the event,” said Michel Hodara, CEO of ACM.

Ernesto Bertarelli, syndicate head of Alinghi, Defender of the 33rd America’s Cup, commented: “The vision for the 32nd America's Cup was to create a fantastic sporting occasion, in Europe, with a viable commercial business model comparable to other major global sporting events.”

The America’s Cup delivered on both accounts with this edition being arguably the best ever with over 4 billion TV viewers and 6 million visitors, watching extremely close racing. Bertarelli now looks to the future: “Our vision for the 33rd America’s Cup is to create an even greater sporting occasion for 2009 with an exciting new class of boats and to build upon the successes of the 32nd edition.”

1. AC Management SA (ACM), the event organising body, approached the America’s Cup strategically and created one property by combining the America’s Cup Match with the Challenger Selection Series, while before they were run by separate entities. ACM also created Pre-Regattas which ran the course of the four year campaign;
2. The professional marketing of the property worldwide, focusing on the brand equity of the 'America's Cup', generated €66.5m net surplus from €240m revenue. Of this surplus, 90% is to be distributed to the participating teams.
3. The value generated came mainly from the City bid process and from the integrated sponsoring rights that offered to Partners a presence that ran the course of the four year campaign.
4. ACM also controlled the television rights, the hospitality, concessions and marina mooring within Port America’s Cup.
5. The redistribution formula is 10% to ACM, 45% to the Defender, 45% to the other teams as published in the 32nd Protocol in 2003.
6. Thus, the top challenger (i.e. Emirates Team New Zealand) will receive over €9m. The minimum contribution, to teams who did not qualify for the Semi Finals, is still over €1m.
7. While the distribution date indicated in the Protocol is March 2008, ACM accelerated the closing of the accounts to allow teams to take immediate advantage of the revenue, helping them to prepare for the next campaign. The 33rd America’s Cup will take place in 2009 in Valencia.

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