Barcelona on track to hit billion-dollar positive economic impact from hosting America's Cup

By: Christopher Reive & Will Toogood

In less than three months, the America’s Cup regatta will descend on Barcelona with a big payday forecast for the region that Auckland will miss out on.

As it stands, all teams barring Team New Zealand are currently in the Catalonian city putting their AC75s through their paces at the Cup venue. The defender will soon join them, with their vessel Taihoro currently on its way north.

In late August, the teams will be racing their AC75s proper for the first time – in the final preliminary regatta – essentially signalling the beginning of a near two-month celebration of sailing.

That will cap off a years-long period expected to have a positive economic impact of €1.2 billion ($2.1 billion) for Barcelona, according to a report commissioned and undertaken by the Universitat Pompeu Fabra in May 2023.

The Barcelona Capital Nàutica Foundation told the Herald that estimate was on track, as was the forecast that the city hosting the Cup would create 19,000 fulltime equivalent jobs for the region.

“It will be in terms of a wide number of factors, including attracting visitors and tourist spend, six participating teams living in Barcelona, increased consumption of goods and services, development of social and business initiatives, creation of employment, promotion and revitalisation of trade, global broadcast exposure and visibility of Barcelona, sponsor and commercial activity around the event,” the foundation said in a statement about what is behind the forecast economic impact.

By comparison, New Zealand’s economy was left $293 million worse off from hosting the 36th America’s Cup in 2021, an official cost-benefit report revealed. Auckland’s economy alone was left with a financial deficit of $146m following the event - with a financial return of 72 cents back for every dollar put in.

Minister for Economic Development, Melissa Lee, highlighted the fact that the 2021 edition in New Zealand was severely hampered by the Covid-19 pandemic.

“It’s important to look at the wider context and remember that the Covid-19 pandemic had an unforeseen and major impact on the 2021 America’s Cup in Auckland.

“In 2017, an independent evaluation estimated that 160 superyachts would be in New Zealand for the event. However, only 27 arrived over the 2020/21 summer period.

“As well as this loss of potential revenue, revenue was impacted by there being fewer international challengers than was originally forecast. An additional five competitors in the 2021 event, as was anticipated, would have generated around $150 million in additional revenue for New Zealand, as was seen in past America’s Cup events.

She continued to say that it was her intention as Economic Development Minister to ensure events that will benefit New Zealand in the long term.

“Major events, whether sporting or cultural, continue to play an important role in growing New Zealand’s economy and provide countless benefits to our country. As Minister for Economic Development, I intend to build and manage a strong pipeline of sports, arts, and cultural events that can be leveraged for long-term benefit to New Zealand.”

Auckland Business Chamber CEO, Simon Bridges, said the outcome for Barcelona was telling of the need for central and local government to work together in order to get significant events across the line for New Zealand.

“Hearing what Barcelona stands to make from the America’s Cup is a bitter blow for Auckland, particularly at this time. While many factors were at play in the likes of Smith & Caughey’s decision last week and stories about other city businesses going to the wall, its got to be true that having the increased spending from, say, the upcoming America’s Cup in the CBD would have made a difference, and maybe ‘the’ difference for some local businesses.

“It also shows why central and local government need to get more serious about these sorts of big events. They are more than “just sports”, they are capable of being hard headed economics for a city, providing greater activity, vibrancy and dollars and plenty of jobs, according to the Universitat Pompeu Fabra study.”

Over the course of the event, for which the Barcelona region came up with a €70 million [$123m] bid to secure hosting rights, four regattas will be contested. The Youth America’s Cup will make its return when 12 teams race in AC40s in conjunction with the semifinals of the America’s Cup challenger series.

The inaugural Women’s America’s Cup will play out soon after – also a 12-team affair contested in AC40s – as it runs between the conclusion of the challenger series and the beginning of the Cup match; the final being held early in the Cup match window.

There will also be an eSports version of the America’s Cup, in which the new video game launched by Team New Zealand provides a new platform into the world’s oldest sporting event. The e-series will feature online qualifiers, with a grand final to be contested in Barcelona in September.

While part of the attraction of Barcelona as a host venue was that the required infrastructure was already largely in place, the city was set to undergo multi-million dollar upgrades to many of the planned projects around the port area and waterfront, with interest locally said to be “very much tracking to expectations”.

“Given the amazing opportunity this event has created for the city, there were a number of planned works that were accelerated to be ready for the event. There are still a few works going on, but everything is on track to be completed by the time the event starts,” the foundation said.

This article was first published on nzherald.co.nz and is republished here with permission