Article By Harpreet Bhal via Reuters where Sir Keith Mills, principal of TeamOrigin talks about sponsorship, budgets and the unique proposition of the America’s Cup.
Competition for sponsorship will be fierce this year as the financial crisis hits big-budget sports, says the head of British America’s Cup syndicate Keith Mills.
“I think it is going to be a very tough market,” Mills told Reuters after a media briefing last week.
Mills said his own team, skippered by triple Olympic gold medallist Ben Ainslie, had already reduced costs by a third, cutting staff and using cheaper boats.
“America’s Cup teams’ biggest cost is people. Whereas before we were looking at team numbers of around 100 (people) we are now looking at 75. That takes a big chunk out.
“You take the smaller boats and smaller design team, and build and design costs also come down,” said Mills, who was behind the setting-up of the Air Miles bonus scheme and led London’s successful bid to host the 2012 Olympic Games.
Despite the squeeze on company budgets, Mills hopes to raise 15 million pounds ($21 million) in sponsorship for TeamOrigin, though he is having to be patient while a courtroom battle over the cup continues.
Swiss team Alinghi, the defending champions, originally proposed to hold the 33rd America’s Cup this year but it was put on hold because of legal challenges by American rivals BMW Oracle who questioned the legality of the Spanish team recognised by Alinghi as the official Challenger of Record.
A New York court is due to rule on a BMW appeal by the end of March and Mills is unable to approach potential sponsors before the legal wrangle comes to an end.
His team, which boasts two more Olympic champions in Iain Percy as tactician and Andrew Simpson as strategist, are keeping busy in the meantime by preparing for the Louis Vuitton Pacific Series, a new match-racing event, off Auckland from Jan. 30.
Alinghi and BMW Oracle are among the 10 teams taking part in the friendly event, though several syndicates have pulled out for lack of sponsors, according to media reports.
Other sailing events have found sponsorship drying up. In December, Team Russia were forced to pull out of the round-the-world Volvo Ocean Race because of insufficient funds. Britain’s Cowes Week regatta also found itself without a sponsor after financial services firm Skandia ended its 14-year association with the event, forcing the organisers to look for new sources of funding for this year.
Mills believes the glamour of the America’s Cup, which Alinghi now want to stage next year, will easily bring in sponsors for his team once the case is over.
“I think we can get 10 to 15 million pounds. There is enough appetite in the market for unique propositions,” said Mills.
“We have kept about a dozen corporations who expressed interest a year ago. We have kept them warm and on the back burner and keep them briefed on what we’re doing.”
Far from being frustrated by the legal delays, which have dragged on for more than a year, Mills remains committed to the cause.
“I’ve been single-minded and determined. You need to have a very tenacious attitude and mindset to keep pumping lots of money and time into something that is frustrated by things outside your control,” he said.
“The uniqueness of the America’s Cup…makes it marginally easier than, let’s say, another football or rugby club trying to get a sponsor. If we didn’t have such a unique proposition I’d be terrified.”
Mills said the cost-cutting measures meant his team’s budget would fall to 20 million pounds from 30 million 18 months ago, of which 15 million would come from sponsors.
Alinghi, who set the rules for the next America’s Cup, plan to introduce a new, lower-cost class of boats for the race aimed at reducing design and build costs for teams.
The move comes as sporting events around the world begin to feel the pinch of the global financial crisis.
Formula One’s governing body the International Automobile Federation (FIA) recently introduced cost-cutting measures such as cheaper engines for independent teams while some carmakers are reviewing their sponsorship of major golf events and soccer bosses have warned that clubs face leaner times ahead.
High-profile events such as the America’s Cup, though, should still attract sponsors despite the recession, says Mills, who is confidently footing some of the team’s bills himself, along with business partner Charles Dunstone, chief executive of Carphone Warehouse.