America’s Cup sailing club faces financial trouble

Emirates Team New Zealand racing INEOS TEAM UK during Race 5 / Day 2 of the ACWS Auckland. Te Rehutai and Britannia in front of the Auckland skyline and the SkyTower.

The Royal New Zealand Yacht Squadron has reported an estimated trading loss of NZ$2m (US$1.27m) for the last financial year, as the Auckland sailing club — regarded for its links to the America’s Cup — continues to look for savings to ensure its long-term sustainability.

The Royal New Zealand Yacht Squadron is the oldest and most successful yacht club in New Zealand, and the current home of the America’s Cup.

The New Zealand Herald reveals that, in an update to members sent in a newsletter on 12 July 2023, Commodore Andrew Aitken writes: “The financial loss for this year will be closer to [NZ]$2m. This is higher than originally forecast due to the review and reset of our Fixed Asset Register.”

Earlier this year, Royal New Zealand Yacht Squadron said it was facing a loss between NZ$1.4m and NZ$1.6m. This has continued to rise, despite the club’s attempts to save money. Aitken told members that much of the additional losses are related to asset write-offs.

The club’s finances have been hit by the impact of covid and poor weather at the start of 2023. A ‘reset committee’ is working to mitigate these issues by finding areas to make savings.

In the update, as reported by the Herald, Aitken confirms the club has written off 247 assets no longer in the club’s possession as well as assets with a value below NZ$2,000, totalling NZ$467,489.

Other costs that are mounting include training material, IT service losses of NZ$33,480, sailing event losses worth NZ$90,000 and a NZ$110,000 loss named as a ‘members subscriptions and debtors adjustment’.

The value of boats owned by the club but which it is selling has been written down by a value of NZ$240,199.

In March 2023, New Zealand’s Business Desk reported that the club was facing a trading loss of up to NZ$1.6 million. It claimed ‘sources’ stated that membership had taken a hit following its decision to allow the America’s Cup to take place in Barcelona in 2024.

In 2021, Team New Zealand officially rejected a NZ$99 million (£52m) bid from the New Zealand Government and Auckland Council to host AC37. Team boss Grant Dalton has said there was not enough money to mount a successful defence in New Zealand.

In August 2022, Radio New Zealand reported that three prominent members of the Royal New Zealand Yacht Squadron had resigned over the decision to move the cup to Barcelona. The state-owned broadcaster quoted an open letter to Royal NZ Yacht Squadron (RNZYS) Commodore Aaron Young from Sir Michael Fay, in which he tendered his resignation. Leaving with him was Alan Sefton, who was part of Sir Peter Blake’s successful cup challenge and defence, and Andrew Johns, a legal adviser on multiple cup challenges.

In his newsletter, Aitken also writes that the club’s bar has not broken even for “a number of years” and now plans to reduce the bar’s winter opening hours during winter from seven days a week to six.

Aitken says that the club is working to “ensure that as we move forward, a sustainable business model is in place so that the club breaks even”. This process is expected to take “a minimum of two years.”

“The reset committee are of the view that it will take a minimum of two years to reach this breakeven position, given the considerable amount of change that is required to do so,” he writes.

“While breaking even before depreciation for the 2023/24 year is desirable, we recognise this is a substantial challenge with current forecasts showing significant work is still required to deliver this.”

Aitken did not wish to comment when contacted by MIN.

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