Accepted economic wisdom in Saudi Arabia suggests that the break even price of crude oil is $65.7 a barrel. At that print, the economy is balanced and ticking along just nicely. Froth above that level and government departments start to get excited, green lights are lit and grand visions for life beyond the oil economy are enacted. Do the maths yourself on 11 million barrels produced a day in Saudi Arabia and see the affect that a few dollars upwards have.
Artwork gets bought at auction. Football clubs get snapped up. Architects get hired for grand building plans and sporting events simply can’t resist the riches on offer. Right now West Texas Intermediate futures are trading at $81 a barrel and Vladamir Putin no less is saying that a return to $100 a barrel is “quite possible.” At that point, everything is on. The America’s Cup is chump change at any price.
And with the Saudi Arabian Grand Prix taking place in Jeddah at the beginning of December, the sporting eyes of the America’s Cup will be squarely on Formula 1 and their communications teams to see how they PR their way out of the various political, human rights and greenwashing issues. Sailing is a sensitive niche sport.
But succeed there and Jeddah comes back on the table for Team New Zealand in their global hunt for cash as economies around the world stagflate – that horrible scenario of rising relative unemployment and inflation combined with a growth slowdown. Not an ideal backdrop to have the begging bowl out. Billionaires aren’t and won’t be queuing around the block at the Viaduct Events Centre home of Team New Zealand, sadly.
I’ve long been a solitary voice on the Cup in the Middle East. Yes, Spain would be great on last weekend’s evidence with SailGP. Cork would be a political football and cold. The Middle East would be something very different and the boats would be works of art to rival the Salvator Mundi sitting in pole position in the Louvre Gallery in Abu Dhabi.
In a sporting sense, a regatta off the Corniche in Jeddah at one of the various harbours that the F1 track runs alongside would be something else. It would most likely have to be evening racing – there could well be lights on the boats – as they make the last of the afternoon breeze before nightfall but it would take the Cup into another dimension. In short, they could make it work. And it’s starting to look like the only viable option unless Spain really did get whooped up into a frenzy and get real on the money.
‘Follow the money’ is the mantra in the America’s Cup and for Team New Zealand it’s a rare commodity at the moment. As the days tick away, it just gets harder and harder to see how they will square the circle without a blank cheque being written by someone – be that a Swiss billionaire with a drinks manufacturer in his back pocket or an arm of the Saudi state. One is more likely than the other.
And the news (that comes as no surprise to any reader here) that Pete Burling and Blair Tuke are yet to sign the standard contracts on offer with ETNZ is not so much a hammer blow as is being reported, but something that was well forecasted and planned for by Grant Dalton.
My sense is that we’re hearing a complete re-working of the truth by the sailors and a mere modicum of what’s really happening. I’d be surprised if there’s even a position available for either of the sailors in the Kiwi line up going into the next cycle as they land back in Auckland from the European season. It might be a bit of a shock to them. I wouldn’t bet against seeing a completely new afterguard in place with new generation sailors already signed and a certain rather good Cup winning Aussie calling the shots – again.
My view is that Pete & Blair have made a catastrophic error of judgement and a public relations disaster awaits them. Like a game of SuperMario, they’re walking on the quicksands of the America’s Cup desert with trap doors of public opinion awaiting below. From absolute heroes to zeroes they could, just could, be about to throw a heap of goodwill under the bus. Sporting status be damned when the lure of the shekel proves too strong but it comes with consequences and their decisions, perhaps already made, are life-changing in more than one sense. The Kiwi public won’t thank them. Their bank manager will. It’s the wrong time to be making moves like this.
Time ticks on however to the Protocol and the expected venue announcement in mid-November and there are plenty now saying that 2024 is a no-no. The delays all round, not least in funding arrangements, are meaning that 2025 is being mooted as more accommodating as it’s looking increasingly hard amidst a crowded sporting calendar to shoehorn the America’s Cup in and get any kind of commercial return from sponsors or networks.
What a shame – but ‘Cowes 2029’ has a certain ring to it…you heard that here first.