America's Cup a success for 'Brand NZ'

Last updated 05:00 16/07/2014

Has the America's Cup runneth over for NZ?

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Taxpayer investment in the America’s Cup should not be assessed on its economic return, not the sporting outcome, according to a professor at Auckland University.

Where rugby is essentially a sport that uses a business to support it, the America's Cup is a business that uses sport as a vehicle, says Professor Rod Brodie of the Business School's Department of Marketing.

Investment in Team New Zealand (TNZ) is an investment in brand New Zealand and the America’s Cup is a global advertising campaign, he says.

"If we compare the level of support that similar countries such as Denmark and Switzerland give to developing export relationships and national branding, then this type of government investment is well accepted internationally,” he said.

The national branding connects with New Zealand's marine industry particularly, and taxpayer investment should be seen as another chapter in what has been an outstanding story over the past four decades, Brodie said.

“Broader returns are in building richer and stronger meaning in brand New Zealand leading to export success and tourism,” he said.

Despite collapsing to eventually lose the Cup 9-8, a report released in March 2014 that analysed the benefits of government funding put the investment's "positive impact" to the New Zealand economy at $87 million, with $153 million (85% of the total campaign budget) spent in New Zealand.

A second report on New Zealand Trade and Enterprise's (NZTE) $3.9 million business-leveraging programme in San Francisco, targeted at the technology, food, wine, marine, aviation and tourism sectors, concluded that New Zealand agencies successfully built on the America's Cup to forge ties with the United States and to lift international awareness of the country as an innovative place to do business.

The 212 companies involved in NZTE's America's Cup programme also reported a range of benefits.

"Activity during the Cup has contributed to trade and investment deals so far worth $200 million for New Zealand and a further $120 million of new sales opportunities and investor interest," the NZTE report noted.

The government is satisfied that the $36 million it invested in TNZ's America's Cup challenge was money well spent. 

But as the public became less enthusiastic about sponsoring another campaign, Economic Development Minister Steven Joyce has refused to commit money to TNZ.

If taxpayer funding is given to TNZ it will be because, despite increasing public disillusionment with the contest itself, the economic case for national branding remains strong, Brodie says. 

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