America’s Cup Donors Waiting for Tax Exemptions to Help AC34

AC45 Capsize San Francisco

The America’s Cup communications team have stepped up a gear, now that Oracle Racing is back home in San Francisco. The Media and VIPs are being treated to rides on ‘America’ while Jimmy Spithill and Russell Coutts show off the AC45 on San Francisco harbour. There’s no news as such – nothing that hasn’t been said before – but repeating the same message over and over again will help sell the new America’s Cup to a wider audience.

Just in case a couple of cats wasn’t enough for the Reuters of the world, Coutts capsized his AC45 yesterday, underlining the extreme messaging and allowing for a bit more sensationalism to help push the story up a few places – the promise of injuries to crewmen not a bad thing for ratings in a ‘car-crash’ television culture.

We’re not saying that the capsize was on purpose – but such an incident on such a day, with all the cameras pointed at the boat will give the TV guys some great clips for promos. Just as the Extreme Sailing Series still use footage of capsizes in Cowes from 3 or 4 years ago, the America’s Cup has some nice ‘wreck’ footage to help re-position the America’s Cup as “NASCAR on steroids.”

But underneath the show, behind the matching uniforms and well rehearsed statements, the organising comittee seems to be struggling to find cash. The San Francisco Examiner reports that only 2 of the 12 million dollars promised by the ‘America’s Cup Organizing Committee’ to the city of San Francisco has been paid.

The hitch? Tax-Exempt status. The new deal America’s Cup is not a commercial sporting event, but a charity. Rather than convince commercial partners of the ROI to be gained, private donors will fund the cup in return for tax breaks. Tax-exempt approval is expected in August. America’s Cup organisers expect that  donors will become more comfortable writing seven-figure cheques.

With just weeks to the first America’s Cup World Series event in Cascais, Portugal, there are no sponsors other than long time supporter Louis Vuitton, and entry fees for teams have been slashed to get some teams on the start line for the opening round of the upstart series.

According to the Examiner:

Some $12 million is budgeted in the coming fiscal year for the Mayor’s Office of Economic and Workforce Development to conduct environmental planning and get necessary state and federal permits. Yet the nonprofit responsible for offsetting The City’s $32 million in costs has only $2 million on hand to mitigate the bill. If the America’s Cup Organizing Committee can’t come up with the other $10 million, it would have to come from San Francisco’s general fund, which is dedicated to basic city services such as police, fire protection and road construction.

The article reports Kyri McClellan, executive director of the America’s Cup Organizing Committee, saying:

“I have every confidence we will meet our obligations in the host-city agreement.”

A Board of Supervisors Budget and Finance Committee hearing on America’s Cup funding is set for June 20.

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