Now that the patriotic frenzy has died down, maybe we should all look in the mirror and reconsider the implications of our America’s Cup victory being won by a team called “Emirates Team New Zealand”? It would not be xenophobic to do so. Arguably, our connection to the feudal regimes that comprise the United Arab Emirates carry almost as much reputational risk as if we were talking about Myanmar Airlines Team New Zealand. Moreover, Emirates has substantial commercial interests riding on both sides of the America’s Cup contest being mooted to take place next year. Emirates isn’t reliably in New Zealand’s corner. The next Cup contest is likely to be waged in 2022 between Emirates Team New Zealand and a UK team that’s been plucked out of the air as the challenger of record. That fact alone should be making us wonder just who is calling the shots here.
Given the nationalist fervour this yacht race has generated – “The America’s Cup is now New Zealand’s Cup!!” etc – there has been a surprising lack of interest in the sponsor that (a) has held naming rights for our America’s Cup team since 2004, and that (b) may now be having a decisive voice in when, where and against whom the next America’s Cup defence will be held.
Friends With Benefits
Sure, “Emirates” is the name of an airline. That airline though, is the flag carrier of the United Arab Emirates, and is a subsidiary of The Emirates Group, which is owned by the Investment Corporation of Dubai – a government owned fund that’s focused on generating wealth and long-term value for the Dubai economy by investing in global opportunities. What makes the America’s Cup initiative unusual is the multi-million dollar state funding coming from our own government and going into an Emirates-named team. Among other things, this transforms Emirates Team New Zealand into something of a joint venture at a national level.
It is this governmental involvement that sets the America’s Cup initiative apart from the sponsorship deals that Emirates has with football clubs like Arsenal, Real Madrid, S.L. Benfica and Olympiacos FC, and with Aussie Rules teams like Collingwood, and with tennis events like the US Open, and with major cycling events (Emirates has a team in the Tour De France) and Formula One racing, and with any number of high stakes horse races held around the globe. Those sponsorship deals are with privately owned enterprises. With the America’s Cup, hundreds of millions of dollars of taxpayer/ratepayer money is involved. To repeat : this puts New Zealand in a partnership with the sheikdom of Dubai via its wholly owned airline and…that’s where the reputational risk enters the frame – on issues say, like human rights. ( See more below.)
Apparently, it will be six months or so before New Zealanders get told whether the next America’s Cup racing will be held here, or off the Isle of Wight. Call me a conspiracy theorist, but can it be accidental that the UK team and this UK location has come to the fore after Emirates have made significant investments in and around the Isle of Wight? The Spinnaker Tower that dominates Portsmouth for instance, is now called the Emirates Spinnaker Tower. Across the Solent, Emirates has also heavily invested in the yachting infrastructure on the Isle of Wight. (Apparently, you can see the Isle of Wight from the Tower viewing platform.)
Why has Emirates done so? Yachting is a high end, rich person’s sport. Its people fly business class. Wealth attracts wealth. Pre-Covid, the UK was reportedly the gateway to Emirates’ largest European market with over a hundred weekly flights going through London Heathrow, London Gatwick, Birmingham, Newcastle, Manchester and Glasgow.
The links to yachting, and to the Isle of Wight have expanded. As the spomsorship section on the Emirates website currently says :
We firmly established our support for sailing in 2004, when we became the naming sponsor of Emirates Team New Zealand. Since then we have also become the Official Airline partner of the 36th America’s Cup presented by Prada, which includes the America’s Cup World Series (ACWS), sponsoring preliminary regattas [held off the Isle of Wight] By being the Official Presenting Partner of ACWS Portsmouth, [Emirates] has helped ensure that world-class America’s Cup sailors would return to the Solent….
In sum, Emirates has made a major commitment to Portsmouth/Isle of Wight as a sailing centre of excellence – and voila, that’s where the next challenger of record is coming from, and where the next Cup contest could well be sailed. Such incredible luck for Emirates, right? Over on the other side of the table, Emirates also retains naming rights for the New Zealand team. Can anyone doubt that the crucial inputs as to the when and where of the next America’s Cup challenge are likely to be made by Emirates, and not by anyone in New Zealand? That process seems already under way. By “accepting” the British Royal Yacht Squad Racing as the challenger of record, the New Zealand holders have enabled Emirates to skip the trouble of bothering themselves with funding another qualifying regatta.
At the time of Emirates’ initial involvement with Portsmouth, Sir Tim Clark, President of Emirates airline, said: “Emirates is proud to expand its commitment to the United Kingdom, which we service with over 130 weekly flights, by bringing world-class sailing boats to the shores of the UK and giving Portsmouth City the chance to host and show its visitors the most sensational event in the sailing calendar.”
Now, if this was strictly a commercial decision – with sailing issues aside – you’d have to concede that the contribution of wealthy travellers next year to the revival of the UK/European airline markets post Covid, would be of more commercial advantage to Emirates than waiting around to help fund yet another qualifying regatta in 2023, and with a final in distant Auckland a year later. And if New Zealand happens to lose the Cup at the Isle of Wight, so much the better for the airline. In that scenario, Emirates’ cup would be running over. In a sense though, it has been Emirates America’s Cup for quite a while now.
Reputational risks, human rights etc.
Should we be proud – or should we be ashamed? – that our ground breaking boat building technology and sailing excellence carry a named association with the airline and regime of the ruler of Dubai? No doubt, Sheikh Mohammed bin Rashid Al Maktoum is a remarkable person. Of late though, he has been notoriously associated with the kidnapping, drugging, imprisonment and torture of two of his daughters.
Princess Shamsa was snatched by the Sheik’s agents in Cambridge in 2000 and returned to Dubai where she has been held captive – if she is still alive – for the past 20 years. In 2018, Princess Latifa tried to escape from her father, but while the boast ferrying her to freedom was in international waters it was boarded by Indian special forces, who forcibly returned her to Dubai. Subsequently Latifa has managed to smuggle out some smart phone video messages that told the world that she is being held in solitary confinement without access to daylight, legal help or medical care. Ominously, those messages dried up several months ago. Latifa’s video appeals are hard to watch.
In 2019, the Sheikh sixth wife Princess Haya – reportedly fearing for her life – managed to escape to Europe with her two children. Sheikh Mohammed launched court proceedings to force her and her children back to Dubai. However, the UK High Court ruled in favour of Haya.
The High Court in the UK…. Finds that on the balance of probabilities, Sheikh Mohammed was responsible for the abduction and forced return of both Shamsa and Latifa to Dubai. The judge rules that the sheikh has waged a campaign of intimidation towards Haya and that he has not been open and honest with the court.
Princess Haya now lives in fear of her and her children being kidnapped, or worse. As well as these grim realities, keep in mind that the Emirates airline is the flag carrier of the sheikdoms that comprise the United Arab Emirates. For the last five years, the UAE has – along with Saudi Arabia – been intervening in the horrendous civil war in Yemen. Both the UAE and the forces that it bankrolls have been accused of carrying out major atrocities against Yemen’s civilian population.
Obviously, no- one is accusing America’s Cup yachting of complicity in war crimes. Yet all of the above makes it deeply regrettable that every time that our America’s Cup yachties get mentioned in the media, it means that Team New Zealand – sorry Emirates Team New Zealand – has to provide a commercially valuable namecheck to an enterprise created, owned and operated by one of the least savoury regimes in the Middle East.
Point being, our sailor are being kept in the manner accustomed partly by these dodgy offshore benefactors, and – as taxpayers and ratepayers – we are now complicit in these arrangements. Next time…could our government at least make our investment in the America’s Cup conditional on Princess Latifa being allowed out to see the light of day, if only to prove that she is still alive?
Footnote One: You’d think the infusion of millions of NZ taxpayer dollars would make sense only if the event is held here to enable local businesses to benefit from the investment, and to allow local fans to enjoy the spectacle. Our Covid- wracked hospitality firms surely deserve no less. Luna Rossa’s reportedly “shocked” helmsman Jimmy Spithill certainly thought so :
I mean, you look at the amount of time and money that the average taxpayer and Kiwi has put into this team, I would have thought it would be an absolute no-brainer to hold the America’s Cup here,” Spithill said.
Right. Yet apparently, the contracts have been written so loosely that the Royal New Zealand Yacht Club Cup holders have been left free to entertain the possibility of a “radical one off” contest in foreign waters next year. Risky? Weird, more like.
Footnote Two: Talking of weird, new nationality rules have been introduced into America’s Cup sailing whereby 100% of the race crews for each competitor must either be a passport holder of the country of the team’s yacht club as of March 19, 2021 or to have been physically present in that country for two of the previous three years before March 18, 2021. Again, it seems a very odd time for this highly professional sport – and yachting is not only a sport of the rich, but a sport teeming with highly talented guns for hire – to be tacking off in this direction. Only three boats turned up in Auckland for the Cup challenge this time around. Why on earth would you want to make it even harder for competitive Cup teams to be assembled ?
Again, the only sensible response is that we need to see this through the lens of the Emirates marketing division. Obviously for Emirates, a repeat of the Auckland experience of 2021 isn’t a desirable option. If the Cup challenge can be transferred – as early as next year – to Clowes in the Isle of Wight, this will nullify New Zealand’s current home advantage. By doing so, it will make the Brits truly competitive. Happily for the airline’s marketing division, the challenger of record happens to hail from a UK that’s situated right in the middle of an Emirates priority market. It is also where the British Royal Yacht Squadron first contested the Cup back in 1851 against the schooner America in a race around the Isle of Wight. Add all of that up, and it looks like a marketing dream.
No problem for Emirates then if the same Cup-originating British yacht club can be handed a competitive home advantage and – thanks to the change in the nationality rules – it can also be made harder for a Cup once brought home to the UK, to be wrested back from it again. Given the history, the US would be sure to challenge in say 2023 or 2024, as they did in 1851. Ramp up a lucrative transAtlantic rivalry steeped in history! But be careful to stack the odds in the UK’s favour, by ensuring the US boat – or say, an Italian boat- can’t readily be filled with professional hired guns.
So where does New Zealand fit into this vision? Lets just say that Team New Zealand’s current name sponsor may not be holding our long term interests closest to its heart.
Footnote Three: Good vibes and patriotic fervour aside, the 2021 America’s Cup was a commercial bomb. Central government spent $136.5 million on the America’s Cup, while the Auckland Council spent another $113 million directly on the Cup and another $20 million on downtown upgrades. So…that’s $250 million at least and just under $270 million if you’re being inclusive. Sure, Auckland will benefit over time from some of the upgrades. But those vast expenditures take no account of the opportunity costs incurred by not spending the money on social needs less frivolous than a yacht race.
The investments by central and local government were estimated(in a 2017 report) to generate somewhere between $600 million and $1 billion in extra spending in the tourism, hospitality and retail sectors. Those rosy estimates hinged on between 21,500 and 26, 275 wealthy international investors travelling to New Zealand specifically for the event, and staying here for the duration. Thanks to Covid though, they never arrived.
Nick Hill, chief executive of Auckland Council’s economic development agency Auckland Unlimited, said that number [of visitors] was now likely to be zero. “We know how many people we expected, and we know now that it’s probably close to zero,” Hill said…..“There will be benefits, but they certainly won’t be the level that we initially calculated.”
So… It would seem that attracting overseas big spenders always was the rationale for the scale of Cup expenditure that took place. Good to know. Because looking ahead, New Zealand – and Emirates – have no way of knowing what international air travel will look like by next year, let alone by 2023 or 2024. As things stand, we have no way of knowing whether more tens of millions lavished on the America’s Cup will ever be compensated by scads of wealthy international visitors being able – let alone willing – to travel all the way to New Zealand. If the economics of future America’s Cup challenges will therefore depend (in the short to medium term) on domestic markets, then it becomes very easy to see why Emirates would want to relocate the Cup to a venue that’s closer to a far bigger domestic market.
Basically, we should cut our losses now. Our taxpayer and ratepayer funds have far more deserving (and far less risky) needs to address.