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    • UnderDawg

      A Few Simple Rules   05/22/2017

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YetMoreTrouble

America's Cup 'brought Plymouth £9m'

48 posts in this topic

http://www.bbc.co.uk/news/uk-england-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

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An independent report

 

Given that Plymouth University was involved in the organisation, "independent" is a bit of a stretch.

 

However, taking the figures at face value, this is saying that the actual cash benefit to Plymouth was around £5M and the council spent £225K. Good for Plymouth council. Not so compelling for venues apparently being asked €5M.

 

Btw I do believe Plymouth got a good deal. A "once in a lifetime" one, apparently.

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Given that Plymouth University was involved in the organisation, "independent" is a bit of a stretch.

 

 

 

 

Like many Chinese "statistics", not worth the paper it is written on.

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Given that Plymouth University was involved in the organisation, "independent" is a bit of a stretch.

 

 

Like many Chinese "statistics", not worth the paper it is written on.

I'd bet if it were about Auckland written by an Auckland college it would be spot on though, and we'd probably get a long lecture if questioned.

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It's a far cry from the €55 million economic impact that ACEA were touting when trying to get expressions of interest from host cities.

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And a former Polytechnic at that. I love the spurious accuracy of the 250 people over the 140,000.

 

A definite bargain and leads to the inevitable question - how much would Plymouth invest to do it again? Can't see more than £500K/$750K

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hopefully such numbers will tempt

 

auckland and sydney into offering a few bucks

 

though sailing by it's very nature is hostage to the weather

 

and auckland has seen precious little of that lately

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I do think those numbers will scale up with the size (and attractiveness!) of the host city.

Normally I would never have gone to Plymouth if it wasn't for the ACWS.

Already friends of mine are planning trips to Venice to see the ACWS, a place like that really appeals to people and seeing the ACWS is as good an excuse as any to hop over and check it out.

I myself am even thinking about going actually, flights and accommodation are cheap that time of year.

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9.1 M pounds = 14.28 M $

 

Of which £4.2M is "media coverage" which is just smoke and mirrors. AFAIK the city of Plymouth does not spend £Ms advertising itself in general media. Why would it? It isn't a tourist destination like Venice or Cascais.

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OK. As many other cities. But there are many cities thinking about...

 

If there is another event in Plymouth I would be there.

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Would love to see the report . . . but

 

"visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m."

 

If I read that correctly, the cash value to businesses in Plymouth was £1.6m. And visitors spent £2.5m (£4.1-£1.6) outside the city (for airlines and trains and gas etc).

 

I don't know what the local/city tax rate is on hotels and such, but lets say 10%. So lets say the city brought in £160K in extra city revenues and payed out £225K plus cost of extra services. Factoring in some future benefit from the media coverage it sounds roughly like a break-even for the city, at the £225K fee.

 

What does it mean for SF. . . difficult to extrapolate but . . . we can look at it 2 ways:

 

In Plymouth $2.5m (£1.6m) incremental local spending for 140,250 visitors = average $17/person. Lets ballpark 500,000 visitors for SF and for 3x the length of time per visitor = $25m incremental local spending for SF.

 

OR

 

Population of SF is about 3x of Plymouth and again lets say 3x the length of average visitor time = a 9x effect = $22.5m increment for SF

 

If we factor in the 'media effect' and say it will bring in future incremental spending and thus double the NPV, then we are looking at a range of $45m-$50m in incremental spending for SF.

 

That range is quite consistent in order of magnitude with the well done post-sports event analyses done for other 'big events' (Which were posted and we all discussed about a year ago). And that order of magnitude is what SF should always have been thinking about rather than the completely bogus $1.2b ACEA number

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can any of the marketeers also give a bit of an insight on the exact meaning of "media coverage", how does one get to such a figure and what is it really worth, but really ?

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can any of the marketeers also give a bit of an insight on the exact meaning of "media coverage", how does one get to such a figure and what is it really worth, but really ?

 

It is generally considered the price that it would cost to organize and advirtising campaign.

They take all the coverage of Plymouth in the media, inside and and outside UK, and evaluate how much it would it would have cost Plymouth to advertise it.

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^ Call me ignorant but I had no frikkin' clue about Plymouth except that it was somewhere in the south of England. Now that it's 'familiar' there's an excellent chance I will visit there some day, very little else in the area being familiar to me. Would make a good excursion from London - why not? They are for sure 'on the map' for me since the event.

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Media value is a tough one to calculate. IMHO this goes for any form of sponsoring.

Calculating how much a "brand" increases in value before and after a media campaign.

 

There was a good article from ABN-AMRO after they did the VOR, cant find that one right now but this one comes close:

http://www.ceeman.org/data/files/Teaching_cases/teaching_case_volberda_abn_amro_in_the_volvo_ocean_race_a_bank_learning_to_sail_as_one_team_2009.pdf

 

It is a pretty good read with some thorough analysis.

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^ Call me ignorant American but I had no frikkin' clue about Plymouth except that it was somewhere in the south of England.

Fixed it for ya ;)

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So the town of Plymouth made some money. That's quite good news.

 

hmmm . . . if you read my post above . . . at least my take on the analysis is that the city just about broke-even - short term lost a little money (cash in about £160K, cash out about £225K plus cost of extra services) but longer term will probably recover that delta from the 'media benefit' creating incremental future visitors - they need about an incremental 5000 visitors in the future which sounds just about reasonable.

 

What this analysis suggests is that Plymouth was smart and got an adequate deal from ACWS. And that #1 ACWS's $5m (or is it euros) asking price is not currently anywhere near reasonable and that #2 its $1.2b AC benefit to SF was also never anywhere near reasonable (but anyone sensible already knew that).

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Sorry to let you down Estar. Without the chance to look under the skirt of the pretty dress to see whether it's structurally sound or barely holding up, I'd say it's just a pretty dress.

I read the posts, but have trouble with analyzing the analysis without the data. People like to skew around with numbers and I am sure they Univ of Plymouth is giving the best view of it, but it's hard to figure if we are doubling over what they've done or if they'd not done enough without seeing the numbers.

 

I'm not usually all sunshine, but isn't it good news if if Plymouth's upside at only the second of these events, that was presumably not well advertised and not well covered in the mainstream media, was positive in the millions of pounds?

 

 

 

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^ Call me ignorant but I had no frikkin' clue about Plymouth except that it was somewhere in the south of England. Now that it's 'familiar' there's an excellent chance I will visit there some day, very little else in the area being familiar to me. Would make a good excursion from London - why not? They are for sure 'on the map' for me since the event.

WTF???

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

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Very interesting the reaction of some posters to any news that may be positive for the event.

What could be behind this systematic reaction?

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

No.

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

No.

Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event.

http://www.plymouth.ac.uk/pages/dynamic.asp?page=events&eventID=6185&showEvent=1

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Without the chance to look under the skirt of the pretty dress to see . . .

 

Let me agree with you three times :)

 

1. Can't argue about wanting to look under the pretty dress to see if it's real or silicone. But I do 'speak this language' and if the BBC is quoting the report then I am willing to take a stab at guessing what's under the dress by watching how it jiggles. I think its excellent that they did an analysis. If I were on a city board contemplating being a host city I would wonder where C and SD's independently conducted ex-post analyses are.

 

2. I also agree with your Sunshine in this regard. . . In the grand history of sporting events, break-even for the host city is pretty decent, and as I said I think Plymouth cut a good and smart deal with the ACWS. It unfortunately just does not seem to support ACWS's dream of $5m (or euros).

 

3. And finally I also agree with you that it would have looked even better with some decent consumer marketing - except we do have to note that Plymouth did do some, which was much better than the essentially zero at the other two ACWS events, and such marketing does add costs to either the host or ACEA so its not pure gravy (And Plymouth's costs for that marketing and extra policing and extra sanitation etc were not included in the BBC reported numbers).

 

It's just one data point, with limited relevance to other cities or events, but it is at least relevant data. And, in combination with the few other data points we have, conclusions can be drawn from it.

 

Regarding SF, I personally think the factual situation is crystal clear:

 

#1 SF has wanted to rebuild these piers for a long time but the costs are too high and they just simply don't offer a good enough return,

#2 If LE wanted to step in and fix the piers at his cost that would be terrific for the AC and for the City,

#3 the city politicians would really really like to accomidate LE because they believe he will then stand behind their re-elections with money and clout and ACEA has given them just enough of a public fig leaf to hide behind with the $1,2b and 8000 jobs

but

#4 LE seems to want to both be rembersed for his costs (at 11% interest) and maintain control of (some of) the piers and that puts the city back at point #1 - it's clearly just too expensive for what the city gets.

and

#5 anyone sensible now knows both those financial benefits ($1.2b and 8000 jobs) are completely bogus and probably at least an order of maginatude high,

so

#6 the city politicians are now in a bind. They know the deal on the table is bad. The right thing for them to do is to tell LE they can offer him two choices (a) continue to lease pier 80 at the normal/public lease cost or (b ) he can pay on his own dime to rebuild any piers he wants and then lease them for 66 years at whatever the current rate the city is getting (inflation adjusted). Both those are cash neutral for the city and positive in getting the AC underway in SF.

#7 but my guess is that LE has enough clout and the politicians will want to serve him well and the Port does not have much clout, so instead an alternate deal will be done and the ports will get left with a big obligation to remburse LE that will sometime in the future create a big (+$100m) financial problem for the Port that will have to be bailed out by the tax payers.

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

No.

Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event.

http://www.plymouth.ac.uk/pages/dynamic.asp?page=events&eventID=6185&showEvent=1

 

 

A " partner " you say. Well i see no conflict of interest there :)

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

No.

Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event.

http://www.plymouth....185&showEvent=1

ACEA didn't fund the study, if this is what you're trying to imply. "Partner" refers to "hosting" and the city of Plymouth hosted the event.

 

But maybe you're suggesting ACEA now owns the city of Plymouth -

 

 

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http://www.bbc.co.uk...-devon-17131800

 

America's Cup yacht racing brought in £9.1m for Plymouth's economy, according to a report.

 

The Devon city hosted the world series event for nine days in September 2011 at a cost to the council of £225,000.

 

An independent report said visitors spent £4.1m, the economic impact from increased business among hotels and local suppliers was £1.6m and media coverage was worth £4.2m.

 

The study conducted by Social, Economic and Market Research at Plymouth University said about 140,250 visitors watched the carbon fibre catamarans race around Plymouth Sound.

 

 

 

 

 

Excuse me but didn't ACEA hire Plymouth University to do the market research?

No.

Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event.

http://www.plymouth....185&showEvent=1

Good find pjf, interesting to notice that the figures change all the time:

Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event. It reaffirms the positive impact of our graduation events on the Hoe, which already bring in 16,000 visitors to the city in just ten days and contribute over half a million pounds in visitor spend to the local economy.

 

It began with 500 000 visitors, now 145 000 and here 16 000. The last figure seems more aligned with the photos we have seen.

 

As for visit to Plymouth, I am sure SR will appreciate. :)

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^ Call me ignorant but I had no frikkin' clue about Plymouth except that it was somewhere in the south of England. Now that it's 'familiar' there's an excellent chance I will visit there some day, very little else in the area being familiar to me. Would make a good excursion from London - why not? They are for sure 'on the map' for me since the event.

WTF???

Someone said there's no airport but a train from London is just about 3 hrs; and that there's an overnight ferry from there to.. Portugal?

 

Sure, why not? Have done London and the Chunnel to Paris, something like this just appeals, it's now friendly/familiar.

 

Point is, Plymouth is now 'on the map' for me; whereas it never was before... and your bitchfest simply makes no difference ;)

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Given that Plymouth University was involved in the organisation, "independent" is a bit of a stretch.

 

 

Like many Chinese "statistics", not worth the paper it is written on.

I'd bet if it were about Auckland written by an Auckland college it would be spot on though, and we'd probably get a long lecture if questioned.

 

 

 

I doubt it!

 

"Economics" is not a reputable science these days.

 

There are large leaps of faith when attaching monetary values to visitor numbers.

 

A lot of this stuff is hard to quantify.

 

Moreover, there are certain visitors (like Te Kooti) who prefer to stay in a tent.

 

And not give large slabs of money to Mr. Sheraton or Comrade Hilton.

 

Besides, when I next see Grant, I will ask if I can stay in a TNZ container.

 

Since the Ch-Ch earthquake, containers have become fashionable in NZ.

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Plymouth University's Vice-Chancellor Professor Wendy Purcell said: "The University is proud to be a partner in hosting this prestigious event. It reaffirms the positive impact of our graduation events on the Hoe, which already bring in 16,000 visitors to the city in just ten days and contribute over half a million pounds in visitor spend to the local economy.

 

 

 

 

 

The university rented their "graduation" tent to ACEA.

 

As such, their economic impact report is hopelessly compromised.

 

Reminds me of police investigating themselves.

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Besides, when I next see Grant, I will ask if I can stay in a TNZ container.

Grant said in one interview that he had paid $4m of the taxpayer-given $36m to host the LVPS Auckland event.

 

Maybe you could ask about how those economics went?

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I don't know what the local/city tax rate is on hotels and such, but lets say 10%. So lets say the city brought in £160K in extra city revenues and payed out £225K plus cost of extra services.

 

There are no local sales or income taxes in the UK. All local taxes are property taxes - Council Tax for domestic property, Business Rates for non-domestic property. So the city will be getting no more cash as a result of hosting the ACWS.

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I don't know what the local/city tax rate is on hotels and such, but lets say 10%.

 

In the UK that is zero. We have VAT (roughly the same as sales tax) at 20% but this all goes to central government. Local government in the UK is funded (primarily) by central government based on a complex formula assessing need and (secondly) by taxes on residential and business property. Increased VAT revenues in the area of Plymouth doesn't raise any money at all for Plymouth City Council.

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What could be behind this systematic reaction?

 

I'm sick and tired of hearing things

From uptight, short-sighted, narrow-minded hypocrites

All I want is the truth

Just gimme some truth

 

I've had enough of reading things

By neurotic, psychotic, pig-headed politicians

All I want is the truth

Just gimme some truth

 

No short-haired, yellow-bellied, son of Tricky Dicky

Is gonna mother hubbard soft soap me

With just a pocketful of hope

Money for dope

Money for rope

 

I'm sick to death of seeing things

From tight-lipped, condescending, mama's little chauvinists

All I want is the truth

Just gimme some truth now

 

I've had enough of watching scenes

Of schizophrenic, ego-centric, paranoiac, prima-donnas

All I want is the truth now

Just gimme some truth

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^

 

And I'm entirely serious. What we are getting, as a by-product of the commercialisation of the Cup, is the spectacle of some in the AC complex spinning so fast they are threatening to go into orbit. Well, if I am fed a bullshit sandwich, don't expect me to smile and tell you it was delicious. I don't have to and I don't want to.

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Sorry to let you down Estar. Without the chance to look under the skirt of the pretty dress to see whether it's structurally sound or barely holding up, I'd say it's just a pretty dress.

 

don't listen to her estar

 

i tried this today and all i got was a black eye and and earful

 

 

 

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^

 

And I'm entirely serious. What we are getting, as a by-product of the commercialisation of the Cup, is the spectacle of some in the AC complex spinning so fast they are threatening to go into orbit. Well, if I am fed a bullshit sandwich, don't expect me to smile and tell you it was delicious. I don't have to and I don't want to.

Some people draw an either or distinction between what's exciting commercially versus what is compelling racing, as if they are in opposition.

 

I do not, and believe AC34 will prove it.

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What could be behind this systematic reaction?

 

I'm sick and tired of hearing things

From uptight, short-sighted, narrow-minded hypocrites

All I want is the truth

Just gimme some truth

 

 

You can't handle the truth cool.gif.

 

 

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What could be behind this systematic reaction?

 

I'm sick and tired of hearing things

From uptight, short-sighted, narrow-minded hypocrites

All I want is the truth

Just gimme some truth

 

 

You can't handle the truth cool.gif.

 

 

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I don't want to.

About says it all.

 

I dare you: Try not follow the AC34!

 

Are you sure??

 

I've said multiple times I'm enjoying watching the sailing. You aren't stupid and you know perfectly well that my remarks refer to swallowing spin and lies. Precisely what you doing here in fact,

 

Some people draw an either or distinction between what's exciting commercially versus what is compelling racing, as if they are in opposition.

 

Who are "some people" then? I used the word "by-product" which does not imply inevitable causation. The Vendée Globe is an example of a commercial event that does not feel the need to patronise those who follow it or dumb-down the format to make it media-friendly.,

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In the UK that is zero. We have VAT (roughly the same as sales tax) at 20% but this all goes to central government. Local government in the UK is funded (primarily) by central government based on a complex formula assessing need and (secondly) by taxes on residential and business property. Increased VAT revenues in the area of Plymouth doesn't raise any money at all for Plymouth City Council.

 

Interesting, thanks.

 

That does make the Plymouth specific assessment less direct, but does not change the general conclusion I drew for ACWS & SF.

 

For Plymouth, you could look at it in three different ways:

 

One way to look at achieving 'financial sustainability' would be incremental national VAT> Plymouth city spending, on the theory that government spending needs to balance even if its not completely fungible. Incremental national VAT is a bit difficult because some of the 'ACWS tourist spending' is cannibalization rather than incremental - that is if they had not gone to the ACWS some of them would have done something else touristy somewhere else. Using the 20% VAT, and assuming half is truly incremental, we come back to a bit better than break even (better because we now include the tourist spending that was not local).

 

That would be an altruistic way for Plymouth to look at it, but they may be more provincially oriented than that and only want to consider 'local financially sustainability' (eg break even at the city level). If that's their view, then given the only local source of funds is property tax, they have to look at whether having the ACWS increased property values (via increased prestige and more tourist business) enough to offset the direct spending. I have never seen anyone try to assess the impact of hosting an event on long term property value. When there was no infrastructure built and it was a one-off event I doubt you would have any measurable effect, but I could see generating a property impact if the Plymouth became a core regular part of an annual ACWS circuit. This is a weakness today selling both the ACWS and the AC to cities - you can't honestly sell either as repeating/sustaining events (like say an F1 race every year). For the moment at least (and perhaps forever because of the deed), they have to be looked at as one-time events. Out of curiosity, what's the ballpark/average property tax rate?

 

If the city is both provincial and more political than analytical (sounds almost like a truism), then they might just be making a political calculation, with no real concern about the financial sustainability. That would be will more voters vote for us if we hold the ACWS than if we don't. Do the voters think they are better off spending this money on the ACWS circus or on say local programs for children? It would be interesting to know from local businessmen if they thought an event like the Tesco Wine festival was a bigger draw than the ACWS? The voters will have two objectives: #1 the money should be spent on whatever event/program they feels most benefits them, and #2 it should be sustainable enough not to stick the city in a hole that the tax payer might have to bail out (with reduced services). That's a relevant way to look at the SF decision - #1 on what alternatives could they be spending the money (+$100m) they will be paying LE (for the piers) and how would the voters rate those alternatives (would bay sailors prefer new small boat marinas to the AC?) and #2 with the LE deal will some part of the city (eg the port) be left in a financial hole?

 

I still fundamentally don't get the business case for spending several $100m on SF piers this time around. They don't need the space with the small CSS fleet. Would it not make much more sense to get it going more economically this time (on pier 80) and then if OR wins and it becomes more of a going concern and attracts more teams and sponsors, to then start a progressive (rather than all in one go) building program for the next time?

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ACWS was never going to generate money for the City Council. If, however, it drove substantially more revenue into local businesses, through teams and tourism, that locals wouldn't have spent somewhere in the area anyway, then the expenditure could be justified. Economic development is a legitimate objective for the council. I don't think there's much doubt that for £225K, it was a good deal. Safe to assume that Plymouth would have neither means nor motive to spend an order of magnitude more than that on a second event.

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