Europe bids for KIWIS' CUP

Europe Business Review, Oct-Dec, 1999

European companies are investing heavily in sponsorship and support of a sports event which as a spectacle has been described as sometimes no more exciting than watching grass grow.

It is the America's Cup, ocean yachting's holy grail, held since 1995 by New Zealand which will defend it next February after three months of preliminary races among challengers beginning in Auckland in October.

This salt water marathon has attracted six European entrants - France (two), Italy, Spain, Switzerland and Russia.

Their yachts, and five other racers from the US and one each from Australia and Japan, have signed up to contest the five-stage Louis Vuitton Cup in which the winner will qualify to meet New Zealand in the nine-race final.

Vuitton, the French maker of luxury leathergoods, is the biggest overall European corporate investor in the events. The company is part of the LVMH group of fashion, champagne, cognac and perfume sellers.

Ericsson, the Swedish electronics company is an official sponsor of the America's Cup final. (The others are Telecom NZ, Air New Zealand, Fuji Xerox and Compaq.)

One of the two French entrants, Le Defi France, is sponsored by Bouygues, the diversified French multi-national.

The Paris-based company's previous New Zealand connection was as the financial backer of "The Piano", the Oscar-winning, New Zealand-made film directed by Jane Campion, a New Zealander who lives in Sydney.

The Italian entrant is sponsored by Prada, the Milan-based fashion house which is spending about US$25 million. Prada's global sales of clothing, shoes and handbags last year were US$650 million.

The Prada team, managed by Patrizio Bertelli, husband of the company's president, Miuccia Prada, includes Italian, French and American experts.

Little is known of "Age of Russia", entered by a syndicate representing the St Petersburg Yacht Club. Race officials in Auckland doubt the Russians will race - the ballast of Russia's economic and political chaos will probably be too much.

Previous America's Cup yacht sponsors from Europe have included Gucci, the Italian shoe stylist (1987), Baron Bich, the ballpoint pen tycoon (1978), and the Italian industrialist Raul Gardini who spent US$75 million on his Moro di Venezia yacht syndicate in 1992.

Landlocked Switzerland's first entry in the America's Cup is a multi-national effort. Swiss, French, Dutch and German expertise is involved.

The Spanish entry is being backed with US$15 million from the Valencia regional government and Telefonica, the national telecoms company.

Britain, which back in 1851 began the America's Cup by losing the silver trophy to the United States, hoped to be represented this time by a boat from the Royal Dorset Yacht Club, but it could not find a sponsor. In Tony Blair's business-like Britain there is no money for such luxuries, apparently.

Japan will be represented in the Louis Vuitton Cup preliminaries by one of two boats it has built - Asura and idaten, both named for Buddhist deities.

Japan has recruited Peter Gilmour of Australia as helmsman - he is rated No.1 on the yachting world's match-racing circuit.

At this stage, four months before the final, New Zealand is heavily favoured to retain the America's Cup and become the first non-American competitor to win it twice.

Australia, bank-rolled by entrepreneur Alan Bond, won the Cup in 1983, the first time the Americans had lost it in 132 years. The Americans regained the silver trophy in 1987.

New Zealand won it off San Diego in 1995 and expects local conditions off Auckland to help it keep the Cup next February. The Kiwi Cup?