If you spend $100M on a racing yacht, don't lose
Larry Ellison of Team Oracle USA escaped that fate by narrowly winning the America's Cup, but New Zealand's entry suffered just such an indignity.
Yachting isn't exactly the Great American Pastime when it comes to sports and entertainment, but the recently concluded America's Cup in San Francisco Bay garnered more than its share of headlines and attention across the U.S. this week.
Part of the event's appeal was the spectacular, come-from-way-behind, nine-straight-wins-in-a-row victory by Oracle Team USA, financed by billionaire Larry Ellison (pictured with trophy), over its New Zealand challengers. As the Kiwis deal with their epic choke, they don't go away completely empty-handed: The New Zealand and San Francisco economies -- along with Ellison's competitive reputation -- clearly benefited.
The Oracle (ORCL) co-founder and chief executive is one of the richest people in the world and has a thing for boats. This year's America's Cup racing yachts, 72-foot-long catamarans, cost between $8 million and $10 million. Ellison has spent far more than that on his entry.
"Someone once asked me if it's worth $100 million to win the America’s Cup," Ellison said in a recent documentary. "It’s certainly not worth $100 million to lose the America's Cup."
A big problem for the yacht-racing world is these new state-of-the-art boats have made an already costly sport prohibitively expensive.
Team New Zealand managing director Grant Dalton told Bloomberg his team's America's Cup challenge cost around $100 million, funded mostly by corporate and private sponsors, although the New Zealand government contributed about a third of that cost. He added that expenses will continue to be a challenge. "You need something that's more realistic price-wise," he said.
New Zealand did gain economically from competing in America's Cup, however. Its companies built not only New Zealand's America's Cup challenger but several other catamarans in the event -- bringing in around $290 million. "New Zealanders built the winning boat," Peter Busfield, executive director of the Marine Industry Association, told Bloomberg. "We’re still on top of the world, we just don't have the silverware."
Host town San Francisco may not see the $1.4 billion economic windfall it had hoped America's Cup would bring, but it certainly won't end up in the red.
According to KGO-TV, the most recent projections for the event, released in April, called for the race to generate about $900 million in economic activity for the Bay area. Analysts expect a final tally in November.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
You don't have to sign up for Medicare. The catch? If you don't enroll when you're first eligible, you could pay some serious financial penalties later in life.
- Student loan debt climbs for 5th year in a row
- Plans revived for 'floating city' of 50,000 people
- Homeowners insurance: Bountiful coverage for bad cooking
- 3 stocks for the 3-D printing revolution
- Why restaurants are adding tablets to the tables
- America's greatest export is its debt
- True test for Obamacare: Will it make US healthier?
- Who will foot the bill for Detroit's bankruptcy?
- How to refinance without resetting the mortgage clock
[BRIEFING.COM] The S&P 500 shed 0.1%, registering its fourth consecutive decline. Today's session proved to be a bit of a roller coaster ride for stocks as the S&P 500 opened in the red, rallied into positive territory, fell to fresh lows, and regained the bulk of its losses into the close.
For the second day in a row, the early weakness coincided with heavy selling in Europe. In addition, bonds and risk assets were pressured by a better-than-expected ADP Employment report, which ... More
More Market News
For years, Todd Mills pushed Frito-Lay to make taco shells from Doritos. He died from a brain tumor on Thanksgiving.