With dwindling revenues, America’s Cup organizer downsizes

Mon Mar 26 2012, 11:23 AM

The America’s Cup Event Authority lays off 28 workers, or about a quarter of its staff, and hopes to strike a new deal with San Francisco for the sailing event

The America’s Cup Event Authority said it will be laying off 28 staff members, or about a quarter of its staff, due to “downsizing of the event footprint in San Francisco.” A statement said 14 members of its San Francisco headquarters and another 14 staff at offices around the world would lose their jobs, mainly in information technology, marketing and communications.

The organization also said it hopes a new deal with San Francisco will be approved tomorrow by the city's Board of Supervisors.

“We must ensure that our expenses match revenues,” said Stephen Barclay, Interim CEO, in the statement. “We made these changes to create efficiencies necessary to ensure that we deliver an exciting and important event for both the world of competitive sailing and San Francisco.”

The downsizing of the America’s Cup organizer comes in the wake of an announcement last month that the organization would not be making US$111m in repairs to deteriorating piers in San Francisco, as part of the original agreement with the city. The layoffs were announced over the weekend, after a city report last week noted there will be fewer facilities and competitors in the event, and no infrastructure investment by the organizers.

A revised deal, which now calls for the port of San Francisco to invest US$22m in infrastructure repairs and other construction, will be voted on tomorrow by the city’s Board of Supervisors. The money will include nearly US$8m for five team bases, and $7m for a cruise terminal, according to the report.

Richard Worth, who was replaced last week as the organization's CEO, is now trying to secure international television coverage for the event. Worth last month told the San Francisco Business Times that it has been "bloody tough" finding international sponsorships. British Sky TV committed to broadcast 12 hours of live exhibition racing next month from Naples, Italy.

"We would rather have Richard focus his attention on bringing in revenue," Barclay told the San Francisco Chronicle. "We want to get some of the broadcasters around the world to start paying good money for the pictures they all want." Barclay said his organization is now paying the US network NBC to broadcast portions of exhibition matches, noting amount of money was “small numbers.”

The organization also tried to transfer one exhibition match planned for San Francisco this summer to New York to garner greater media attention, but that did not work out. It also lost access to an official viewing site in San Francisco.

In the meantime, the Board of Supervisors will vote on the revised deal on Tuesday.

“The financial package is not what we had anticipated or planned for but we are moving forward because this sailing event will be fantastic for the teams, sailors around the world and all San Francisco,” said Barclay in the statement.