Blain’s Morning Porridge 2nd September 2024 – The Potential Value of the America’s Cup
“Your majesty, in yacht racing there is no second…”
The America’s Cup in Barcelona looks like rich blokes swanking for bragging rights, but there is genuine value in sports, including yacht racing. The trick is appreciating the passion of fans, and monetising the value of sports in an increasingly digital world.
It’s the Labour Day Holiday in the US – so maybe I should be writing something about US politics in the hope even right-wing trolls and resurrected election-deniers sometimes sleep? Perhaps its ok for the rest of the world to shake our heads in despair about US politics – or maybe we should be thinking about the consequences of the AfD winning the German Thungria election on Sunday?
Instead, I want to write about sailing this morning…
Please bear with because there is an economic point, and even market opportunity in this morning’s ramble… Regular Readers will know sailing is my passion… My darling kids will inherit little when I pass a poor but happy man, having squandered it all on fast boats, and the girl I adore.. (but, mostly on the boats..)
I spent the weekend racing on my friends’ 1888 classic yacht, Thalia, in the renowned Hamble Classics regatta. 136 years ago Thalia represented the pinnacle of race-yacht design and technology, a purpose built racing gaff-rigged pilot cutter. She is a beauty with umpteen sails; the main, topsail, staysail, working jib, flying jib and a choice of spinnakers, all working together to sail fast. Every single rope is brown, (and there are lots of them). Not a single winch. Everything is done through blocks, purchase tackles, and brute strength. Sails have to hanked on to the stays. To “tack” her, you need to “back” the jibs to help her round, and pull the main in tight during “gybes” to avoid hitting the “stays”.
I’ve been fortunate enough to sail Thalia since she acquired her current owner – my chum David – during an unplanned Icelandic volcano stopover in 2011. (Great story – but one for another day.) I’ve got used to Thalia’s rather stately tacks and gybes, and the sheer effort required to steer her through the tiller.
Over the weekend, we were racing against some 30 odd other classic yachts in the Solent, the home of global yacht racing. I was calling the shots and nearly nailed the ultimate best-start ever with a timed run to the start line. Unfortunately, the helmsman was slow to respond to my shouts to “luff-up”, meaning he couldn’t slow her, and we crossed the line 3 seconds early…. Which meant we had to go back, loosing what would have been a legendary moment. It didn’t actually matter – the wind died about an hour later and the race was abandoned! (Curiously, UK champion sailor Ben Ainslie also screwed up a start on Sunday when his Ineos Britannia yacht was 14 cm over the start-line in the America’s Cup in Barcelona.)
Afterwards we gathered for beers in the RAF Yacht Club where the winners received their trophies – nice, inscribed little wine classes – and we toasted each other’s success. Everyone happy and very, very satisfied. Everyone genuinely happy.
Compare and contast to Barcelona where today’s ultimate sailing race machines, the foiling AC75 foiling race yachts, owned by some of the most successful men and rich businesses, are contesting the World’s Oldest Sporting Trophy; The America’s Cup to win what is known as the Auld Mug. At a rough guess I’d say each team has spent at least $250mm on their respective campaigns to get to Barcelona – the numbers may well be much higher.
The 6 yachts competing for the trophy, representing NZ (the current holders), The UK, The USA, Italy, France and Switzerland are like spaceships. Half the crew are “cyclors”, furiously peddling bikes at full pelt to provide the hydraulic power to the trim the sails and foils, while two “drivers” steer the boat. Thalia might hit 12 knots in the right conditions. They boats fly on their foils at 50 knots in even light winds.
This years 37th America’s Cup is attracting plenty of criticism.
Why Barcelona? Because the Kiwis could not afford to stage it back home. The footage so far of the racing shows disinterested folk on the beaches utterly ignoring the racing. Barcelona is already a packed tourist destination – and hardly needs the 2 million extra visitors the America’s Cup organisers expect (but look unlikely to get). Locals are complaining it hasn’t created any local jobs, and all the money is being spent elsewhere. To cap it all, Sir Ben Ainslie, the UK team-leader, was mugged and his Rolex stolen last week after dinner at leading restaurant.
Sailing does not make for natural TV. Even hardened sailors, including myself, are struggling to maintain much interest in the races – which we’re watching on YouTube because it isn’t anywhere else. 2 yachts contest east race doing six upwind/downwind legs. The boats tack (the bow of boat goes through the wind) and gybe (the stern goes through the wind) 4 or 5 times on each leg, in seconds. You can barely see the crew, who stay seated the entire race – while the crew of Thalia latterly hop, skip and jump between the multiple ropes that have to be tweaked on every manoeuvre. A tack can take a lifetime…
Formula 1 is equally dull – be honest – but it attracts billions of viewers. Sailing doesn’t yet have the same cachet. There is, apparently, a TV crew in Barcelona producing something like “Drive to Survive” (“DTS”), the Netflix TV series that gave Formula 1 the massive “penetrative” boost it needed into the mainstream US market. Formula 1 has great sidebar stories (that DTS thrives upon “soap-opera” like story-lines), and the teams, Merc, Ferrari, McLaren and Aston Martin are iconic sports/race car brands folk want to associate themselves with. Not many male (or in my experience, female) sailors crave a Prada Handbag….
There are doubts the America’s Cup can repeat Formala 1’s success – the contest and yacht sponsers like Louis Vuitton, Prada, and Orient Express are all luxury brands entirely unlinked to sailing. (When sailors are faced by the brutal dilemma of new sails or posh luggage – the sailmakers win every time.) Ineos, sponsoring the UK team, is the closest we come to a real company folk may recognise – but Chemistry and Sailing aren’t close bedfellows. Alighni – the struggling Swiss team – has previously won, but is now a marketing tool for Red Bull – a sure sign the energy drinks firm has its sights on repeating Formula 1 success. The US team is owned by some property-dude, while the holders NZ are taking Emirate’s money by painting the boat in the airline’s theme colours.
However, TV viewing is not the real value of sailing.
Here in the UK it’s estimated over 4 million people will do some kind of sailing/boating activity each year. Although actual sailing events and yacht clubs are struggling to attract members – mainly because of costs, inflation and decreased disposable incomes – the interest in sea-sports remains massive.
These numbers should be of tremendous interest to advertisers – who want to associate their life-style wares and sailing brands to the sport. Formula 1 petrol heads no longer race their own cars, but demonstrate passionate loyalty to the sport. Could the same thing happen in evolved sailing?
In its present guise of the irregular and overly expensive, exclusive and hyped America’s Cup….. probably not, but proper sailing teams racing more exciting, fast yachts with more jeopardy, thrills and spills, and lots and lots of branding… probably could. It has to become less exclusive. There are fast, sexy yachts – foiling cats and smaller AC type boats – that could become a more promising professional sailing proposition, and attract genuine crowds.
To enable it, you would need to build mass-following. That is an evolving business – the business of building value and monetising digital rights. Call it digital wealth management. Let me explain – I am a passionate sailor. I could sign up to watch a “fast channel” following my favour yacht team, repeating TV shows of them racing. I could follow them on multiple other social media channels and find myself receiving unique “content” from the team, converting me from fan to superfan. The advertisers would quickly follow – hitting me with gear but also yacht stuff…
That’s the reason sports has become such a critical investment theme in recent years – monetising the value of fans to the event/ sport/ team/ individual/ icon! To put all the tech in place to monetise digital wealth is complex, but I’m working with a client who has successfully just done that, and put it all together. If you’re interested or merely intrigued.. lets chat.
In the meantime, and much to my pleasure and surprise the UK team in Barcelona is currently second in the qualifying Louis Vuitton Cup. Well done Ben! Yesterday’s race against the French was actually pretty exciting – watch it here:
Out of time, and back to the day job…
Bill Blain
Author of the Morning Porridge, founder of Wind Shift Capital
www.morningporridge.com
www.windshift.capital
billblain@morningporridge.com
Blain’s Morning Porridge 2nd September 2024 – The Potential Value of the America’s Cup
“Your majesty, in yacht racing there is no second…”
The America’s Cup in Barcelona looks like rich blokes swanking for bragging rights, but there is genuine value in sports, including yacht racing. The trick is appreciating the passion of fans, and monetising the value of sports in an increasingly digital world.
It’s the Labour Day Holiday in the US – so maybe I should be writing something about US politics in the hope even right-wing trolls and resurrected election-deniers sometimes sleep? Perhaps its ok for the rest of the world to shake our heads in despair about US politics – or maybe we should be thinking about the consequences of the AfD winning the German Thungria election on Sunday?
Instead, I want to write about sailing this morning…
Please bear with because there is an economic point, and even market opportunity in this morning’s ramble… Regular Readers will know sailing is my passion… My darling kids will inherit little when I pass a poor but happy man, having squandered it all on fast boats, and the girl I adore.. (but, mostly on the boats..)
I spent the weekend racing on my friends’ 1888 classic yacht, Thalia, in the renowned Hamble Classics regatta. 136 years ago Thalia represented the pinnacle of race-yacht design and technology, a purpose built racing gaff-rigged pilot cutter. She is a beauty with umpteen sails; the main, topsail, staysail, working jib, flying jib and a choice of spinnakers, all working together to sail fast. Every single rope is brown, (and there are lots of them). Not a single winch. Everything is done through blocks, purchase tackles, and brute strength. Sails have to hanked on to the stays. To “tack” her, you need to “back” the jibs to help her round, and pull the main in tight during “gybes” to avoid hitting the “stays”.
I’ve been fortunate enough to sail Thalia since she acquired her current owner – my chum David – during an unplanned Icelandic volcano stopover in 2011. (Great story – but one for another day.) I’ve got used to Thalia’s rather stately tacks and gybes, and the sheer effort required to steer her through the tiller.
Over the weekend, we were racing against some 30 odd other classic yachts in the Solent, the home of global yacht racing. I was calling the shots and nearly nailed the ultimate best-start ever with a timed run to the start line. Unfortunately, the helmsman was slow to respond to my shouts to “luff-up”, meaning he couldn’t slow her, and we crossed the line 3 seconds early…. Which meant we had to go back, loosing what would have been a legendary moment. It didn’t actually matter – the wind died about an hour later and the race was abandoned! (Curiously, UK champion sailor Ben Ainslie also screwed up a start on Sunday when his Ineos Britannia yacht was 14 cm over the start-line in the America’s Cup in Barcelona.)
Afterwards we gathered for beers in the RAF Yacht Club where the winners received their trophies – nice, inscribed little wine classes – and we toasted each other’s success. Everyone happy and very, very satisfied. Everyone genuinely happy.
Compare and contast to Barcelona where today’s ultimate sailing race machines, the foiling AC75 foiling race yachts, owned by some of the most successful men and rich businesses, are contesting the World’s Oldest Sporting Trophy; The America’s Cup to win what is known as the Auld Mug. At a rough guess I’d say each team has spent at least $250mm on their respective campaigns to get to Barcelona – the numbers may well be much higher.
The 6 yachts competing for the trophy, representing NZ (the current holders), The UK, The USA, Italy, France and Switzerland are like spaceships. Half the crew are “cyclors”, furiously peddling bikes at full pelt to provide the hydraulic power to the trim the sails and foils, while two “drivers” steer the boat. Thalia might hit 12 knots in the right conditions. They boats fly on their foils at 50 knots in even light winds.
This years 37th America’s Cup is attracting plenty of criticism.
Why Barcelona? Because the Kiwis could not afford to stage it back home. The footage so far of the racing shows disinterested folk on the beaches utterly ignoring the racing. Barcelona is already a packed tourist destination – and hardly needs the 2 million extra visitors the America’s Cup organisers expect (but look unlikely to get). Locals are complaining it hasn’t created any local jobs, and all the money is being spent elsewhere. To cap it all, Sir Ben Ainslie, the UK team-leader, was mugged and his Rolex stolen last week after dinner at leading restaurant.
Sailing does not make for natural TV. Even hardened sailors, including myself, are struggling to maintain much interest in the races – which we’re watching on YouTube because it isn’t anywhere else. 2 yachts contest east race doing six upwind/downwind legs. The boats tack (the bow of boat goes through the wind) and gybe (the stern goes through the wind) 4 or 5 times on each leg, in seconds. You can barely see the crew, who stay seated the entire race – while the crew of Thalia latterly hop, skip and jump between the multiple ropes that have to be tweaked on every manoeuvre. A tack can take a lifetime…
Formula 1 is equally dull – be honest – but it attracts billions of viewers. Sailing doesn’t yet have the same cachet. There is, apparently, a TV crew in Barcelona producing something like “Drive to Survive” (“DTS”), the Netflix TV series that gave Formula 1 the massive “penetrative” boost it needed into the mainstream US market. Formula 1 has great sidebar stories (that DTS thrives upon “soap-opera” like story-lines), and the teams, Merc, Ferrari, McLaren and Aston Martin are iconic sports/race car brands folk want to associate themselves with. Not many male (or in my experience, female) sailors crave a Prada Handbag….
There are doubts the America’s Cup can repeat Formala 1’s success – the contest and yacht sponsers like Louis Vuitton, Prada, and Orient Express are all luxury brands entirely unlinked to sailing. (When sailors are faced by the brutal dilemma of new sails or posh luggage – the sailmakers win every time.) Ineos, sponsoring the UK team, is the closest we come to a real company folk may recognise – but Chemistry and Sailing aren’t close bedfellows. Alighni – the struggling Swiss team – has previously won, but is now a marketing tool for Red Bull – a sure sign the energy drinks firm has its sights on repeating Formula 1 success. The US team is owned by some property-dude, while the holders NZ are taking Emirate’s money by painting the boat in the airline’s theme colours.
However, TV viewing is not the real value of sailing.
Here in the UK it’s estimated over 4 million people will do some kind of sailing/boating activity each year. Although actual sailing events and yacht clubs are struggling to attract members – mainly because of costs, inflation and decreased disposable incomes – the interest in sea-sports remains massive.
These numbers should be of tremendous interest to advertisers – who want to associate their life-style wares and sailing brands to the sport. Formula 1 petrol heads no longer race their own cars, but demonstrate passionate loyalty to the sport. Could the same thing happen in evolved sailing?
In its present guise of the irregular and overly expensive, exclusive and hyped America’s Cup….. probably not, but proper sailing teams racing more exciting, fast yachts with more jeopardy, thrills and spills, and lots and lots of branding… probably could. It has to become less exclusive. There are fast, sexy yachts – foiling cats and smaller AC type boats – that could become a more promising professional sailing proposition, and attract genuine crowds.
To enable it, you would need to build mass-following. That is an evolving business – the business of building value and monetising digital rights. Call it digital wealth management. Let me explain – I am a passionate sailor. I could sign up to watch a “fast channel” following my favour yacht team, repeating TV shows of them racing. I could follow them on multiple other social media channels and find myself receiving unique “content” from the team, converting me from fan to superfan. The advertisers would quickly follow – hitting me with gear but also yacht stuff…
That’s the reason sports has become such a critical investment theme in recent years – monetising the value of fans to the event/ sport/ team/ individual/ icon! To put all the tech in place to monetise digital wealth is complex, but I’m working with a client who has successfully just done that, and put it all together. If you’re interested or merely intrigued.. lets chat.
In the meantime, and much to my pleasure and surprise the UK team in Barcelona is currently second in the qualifying Louis Vuitton Cup. Well done Ben! Yesterday’s race against the French was actually pretty exciting – watch it here:
Out of time, and back to the day job…
Bill Blain
Author of the Morning Porridge, founder of Wind Shift Capital
www.morningporridge.com
www.windshift.capital
billblain@morningporridge.com
you might also like
Book Review: The Battle For Hamble
A market running downwind hard and fast is a dangerous thing
What if the AI Bubble Fails to Deliver?