Stern wind There are still months to go before the sporting event that will mark the course in Barcelona this year, but the America’s Sailing Cup has just successfully crossed the first finish line.
Because it can already be said that, from the outset, it will not be a deficit event. There will be no extra cost for the taxpayers or for the thirty businessmen from Barcelona (and yes, also some from Madrid) who had pledged to support the competition with almost 30 million of their assets in the event that the sponsors are not there bring enough money.
When formalizing Barcelona’s candidacy, some private entrepreneurs put their guarantee on the table. Well-known surnames such as Puig, Cuatrecasas, Rodés, as well as others linked to the passion for sailing. Well, this money has arrived and the expected mark has been exceeded, after the last major companies (CaixaBank, Cupra, Estrella Damm, Puig, Coca-Cola, Louis Vuitton, to mention a few) announced the advertising involvement in the event
As for public money, after this private support, the nearly 50 million euros already budgeted (Ministry of Sport, Provincial Council, City Council, Barcelona Tourism) will not have to be increased, so the approximate 80 million that needed to be mobilized for the America’s Cup to go off the rails are now well underway.
It seems like a no-brainer, but if you compare it with the last edition of this competition that Spain hosted, that of Valencia 2007 – net of the urban planning benefits that were generated in the city and the revitalization of the port -, the budget completely out of date. The debt dragged on for fourteen years and at the end of 2021 the public administrations still had to assume twenty million euros that remained to be paid.
In short, the oldest competition in sport has this time achieved not only environmental sustainability, but also financial sustainability.
As far as the public administration is concerned, the accounts should also come out round for a simple reason: if it is predicted that the America’s Sailing Cup in Barcelona can attract – at least – some two million visitors in just two months (after the summer), with the forecasts of daily expenses the State will be able to recover easily (and up to four times) what has been invested in tax revenue in the form of VAT. For the City Council, the cost for the coffers is similar to that of Mobile, but the benefits can be higher, since the demonstration extends over more days.
And here we go to the next issue: once the accounts of the production are done and all that remains is for the famous 100 Guineas trophy to hand out luck to the sailors, one wonders what will be the economic impact that this event will have for the city We enter the slippery terrain of forecasts and intangible legacies, which are always difficult to calculate.
An official estimate, made by the UPF, is already circulating, which calculates that the America’s Sailing Cup will have an overall impact of more than 1.2 billion euros. The data of the study was advanced by the Generalitat. It would represent 0.5% of the community’s GDP. It would also be the highest figure ever reached for the Cup in terms of impact.
Is it realistic?
To answer this, it is best to compare it with what happened in previous editions. But you can already make a spoiler: it’s plausible. The fundamental economic pillar of this event is the audience, especially the television audience. Nearly 1.2 billion people worldwide, led by the United States, the United Kingdom and Italy, will tune in to see the competition, thanks to the colossal investment of 25 million euros in a very agile, free and accessible broadcast for a general public.
The previous edition in Auckland (2021) does not serve as a reference: it was a post-covid world and the time zone was not favorable. If we go back, in the 2017 edition in the Bermuda Islands, an analysis by the consulting company PWC valued the impact at just 330 million euros. But the television audience was barely 450 million people (in addition, there were few participating teams and few visitors from abroad), a figure that Barcelona aims to more than double. If he succeeds, then the impact can more than double and come close to forecasts.
Now compare it to Mobile: the pre-pandemic edition of 2019 generated almost 500 million in just one week. If we multiply this number by two (the fortnight of October, when the Copa America final takes place), it would reach close to 1,000 million, and the official estimate, in one way or the other , at the end more or less square.
But can’t there also be some negative economic externality? Yes. A report prepared by the Bay Area Council Economic Institute for the celebration of the America’s Cup in San Francisco (2013) detected some harmful effects: increased traffic and congestion on the streets, higher hotel rates, more queues in some restaurants (in the vicinity of the event), increase in air fares to and from San Francisco, possible competition in the labor market (some of the jobs created were at the expense of other businesses in the city) .
However, the same study concluded the following: “There is no clear evidence that the increase in visitors to San Francisco caused a substantial negative effect.”
In the case of Barcelona, ??there could be some urban planning and real estate tension in the area of ??Port Vell and Barceloneta, where the nautical bases are located. But the data must be put into context: more than 102,000 people live in the Ciutat Vella district. That the 2,500 members of the America’s Cup teams that have been settled in the city for months are altering the rental prices of the entire neighborhood by themselves is something that must be checked and at the moment there is no tangible data that this happens.
As for the hospitality services, it is predicted that more than 3,500 visitors will arrive during the days of the competition. However, we are talking about a period that does not exceed two months and in the low tourist season, after the summer, therefore, queues, congestion or the increase in rates are destined to be momentary.
On the other hand, it is more possible that there will be specific changes in the labor market, because the organization of the America’s Cup is a huge vacuum cleaner of human and technical resources (workshops, boats, equipment, material), of which the Barcelona sector could at some point be lacking.
“The local nautical industry will find it difficult to find an upholsterer, a mechanic. There may even be less industrial space available. In addition, they pay a lot, because they have a large budget to spend in a limited period of time. You can’t compete with the America’s Cup”, complained an entrepreneur in the sector.
In any case, to fully assess the effect on Barcelona’s economic fabric of the America’s Cup, it is necessary to remember the organizers’ original bet: to take advantage of the event’s leverage, not so much to promote an urban transformation (which, unlike Valencia, it will be minimal, since most of the infrastructure is put in and taken out), but to develop the blue economy sector.
Beyond the vagueness behind this concept, there are indeed concrete initiatives, under the umbrella of the Barcelona Capital Nàutica Foundation, which brings together several initiatives and which could give way to a multiplier effect of the sporting event on a business scale. For example, the Catalan shipyard De Antonio Yachts will produce a model of a 100% electric boat that will assist the new autonomous electric beacons throughout the competition. In addition, since the teams are obliged to have a ship fueled by hydrogen to accompany them during the journeys (the so-called escort ship), the idea is that after this demonstration this fuel will begin to be popularized and its use in nautical to reduce emissions. We can cite the case of the premises of Port Olímpic, where in the past discotheques for gyuris reigned and which will now have the possibility to specialize their offer in the most advanced nautical sector and technology, such as the one that will sail in the America’s Cup.
Other economic repercussions are difficult to measure. In this sense, it should not be forgotten that the regattas are also an occasion to attract businessmen through hospitality and create a breeding ground for business initiatives or for some to decide to settle or invest in the city some high-level real estate agencies in Barcelona are quietly waiting for it).
We should also mention the new UPC university courses related to nautical, which will be grouped in a new study center near the Vela hotel. Without forgetting the City Council’s initiatives to promote water sports also from children and school age, which will bring new winds to the public and sports spaces on the coast near Barcelona (the so-called Blue Pavilion) without environmental impact.
The biggest financial risk, reasoned the sources involved in the negotiation, is that paradoxically it is the people of Barcelona who do not make the event their own or who live it as a foreign body in their lives, when, moreover, no team competes Spanish in the main AC75 league.
In the end, you have to ask yourself if money is the most important thing. Because, as legendary USA skipper Bus Mosbacher, who lifted the trophy twice in the 1960s, once said, “What started more than a century ago as a joke between gentlemen has become a matter of national pride, purpose and prestige. Millions of dollars have been invested in this competition, with no guarantee of any profit, except the certainty that there will be winners and losers”.
