Cabinet colleagues of the Foreign Affairs Minister have reservations after two cost-benefit analyses show very different results from yacht race
As he prepared to record a video from Crosshaven Yacht Club to promote Ireland’s bid to host the 2024 America’s Cup yacht race in his native Cork, Simon Coveney was being given wardrobe advice.
“Suggest casual sailing gear if possible and if it feels appropriate,” wrote adviser John Concannon in an email to the Foreign Affairs Minister’s private secretary last February.
Concannon, the director general of Global Ireland, the Government’s strategy to double the country’s global footprint by 2025, also suggested what questions Coveney should be asked to get him talking about “how sailing is in Ireland’s blood”.
The interview was for an internal promotional video linked to Ireland’s bid to host the America’s Cup. Last Friday evening the Department of Foreign Affairs refused to release the video, but Concannon’s message is one of dozens of emails and texts that were released under Freedom of Information. They show the strenuous efforts made by Coveney and his team to win support within Government for Ireland’s bid to host the race. They include two separate cost benefit analyses, which the department refused to release, but which the Sunday Independent understands show dramatic swings in the potential cost and economic benefit to the State from hosting the event.
A first draft of an economic appraisal conducted by consultants at EY showed that in a central scenario the Government could end up spending nearly €500m to host the event but derive no net economic benefit. In fact, this scenario showed the State losing just under €50m.
Nonetheless intense efforts have been under way since the start of the year to try and bring the the 37th America’s Cup to Ireland in three years’ time with Coveney and Concannon leading the charge.
“The America's Cup is an iconic international sporting event, regarded as the pinnacle of sailing and maritime sport, was first contested in 1851 making it the oldest trophy in international sport, predating the modern Olympic Games by 45 years,” Concannon wrote in one email to two senior Department of Foreign Affairs officials last March.
While a decision on a host venue had been due in mid-September, the cup holder, the Royal New Zealand Yacht Squadron, delayed its announcement to allow those shortlisted — including Ireland, Spain and Saudi Arabia — to continue to work through their bids. Prior to that announcement, the Irish Government told the organisers it needed another six months to carry out due diligence on the proposal.
But rather than finalising its bid, the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media (TCAGSM) is now assessing whether it is worth pursuing at all.
“The Department is currently engaged in an assessment which will take six months and is aimed at evaluating the potential of this event before a decision could be made on whether or not Ireland should move forward in the 37th America’s Cup host venue bid process,” the department said last Friday.
TCAGSM refused to release hundreds of pages of records about the bid, citing the “deliberative process” clause in FOI law. But internal emails from Coveney’s department show that despite his officials working on this proposal since the start of this year, TCAGSM’s head of major sports events, John Kelly, only appears to have been brought into the process towards the end of April.
On April 23, Concannon emailed Kelly with details of “the concept of Ireland as a possible country for the 23rd America's Cup in 2024”. Stressing the need for confidentiality, Concannon included the aforementioned promotional video, an expression of interest document and a presentation from consultants EY — all of which the department has refused to release. Concannon wrote how the bid aligned with the objective of the Global Ireland programme he leads and included the exact same line he had sent to his two colleagues in the DFA in March about the America’s Cup being “an iconic international sporting event, regarded as the pinnacle of sailing and maritime sport”.
For his part, Coveney has a personal interest in sailing. He sailed around the world as part of the Sail Chernobyl Project in 1998. His brother, the Greencore CEO Patrick Coveney, chairs Irish Sailing's Olympic Steering Group (OSG) and is a director of the Irish Sailing Foundation. According to one email from Concannon, it was the Fine Gael deputy leader who secured the services of EY to prepare an expression of interest document on a pro bono basis.
Emails from April and May show meetings being set up to brief the chiefs of staff to the Taoiseach and Tánaiste, Deirdre Gillane and Brian Murphy, respectively. One email from mid-May shows Coveney’s special adviser Laura McGonigle writing to Gillane and Murphy with an update on the bid on foot of a request from Coveney. “As yet there has been no final decision on the competition moving outside of NZ, but hoping that decision is taken very shortly. All of the indications are that this is going to move forward,” she wrote.
But privately there have been strong reservations from Coveney’s Cabinet colleagues about the bid. This is in part because of two drafts of an economic appraisal document drawn up by EY where the costs and economic benefits fluctuate considerably. Any country hosting the America’s Cup is expected to make significant financial contributions including a rights fee, a commitment to cover operating costs and the provision of required infrastructure, facilities and services.
The Sunday Independent understands that EY’s first draft of a cost-benefit analysis, produced in early August, put the cost of hosting the event at between just under €400m and just over €600m.
In the best case scenario there would be a net economic benefit to the State of €100m if the event cost just under €400m to host. In the worst case scenario there would be a net economic benefit to the State of €200m from spending over €600m on hosting the event.
But the central scenario predicted an economic loss of €50m from spending nearly half-a-billion euro on hosting the event. A revised draft was produced in September painting a more positive picture, with the cost ranging from €180m to €230m. The net economic benefits derived from three scenarios ranged from €35m to €200m, with the central scenario seeing the Government spend €200m hosting the event to derive a net economic benefit of €150m.
“All that happened in the space of a few weeks,” a well-placed source said. “Sport didn’t have confidence in the numbers.”
Text messages between Concannon and TCAGSM’s policy analyst in the major events division, David Byrne, show the former was anxious to get the second draft of the CBA finalised. “Are we nearly there,” he texted Byrne on September 2. Byrne would later write back: “You have cba now. Sorry it took so long. The caveats in my cover email are important context.”
The cost will ultimately be a matter for the Department of Public Expenditure whose minister is Michael McGrath, a constituency colleague of Coveney’s in Cork South-Central but not someone who is known to have an interest in sailing. McGrath is understood to harbour reservations over the potential cost of the event. One email, released to the Sunday Independent, shows Coveney sending a series of promotional materials for the competition to McGrath on June 23 last. “Michael, these documents will give you an idea of the scale of what we are proposing to do to host the 37th America’s Cup in Ireland (Cork). It’s a big opportunity, but needs professional planning and management. Look forward to giving you a full verbal brief, Simon c.,” he wrote.
One of the documents is a glossy brochure replete with pictures of champagne magnums, luxury cars and large sailing boats. It includes case studies showing the economic impact of Valencia hosting the 32nd America’s Cup was €2.8bn — a figure Coveney would himself use in an interview defending the bid last August.
The brochure also points out that the America’s Cup has long been associated with “prestigious luxury, lifestyle and mainstream brands”, name-checking Louis Vuitton, Oracle, Prada, Omega, Emirates and BMW as recent partners.
“Around 250 brands and businesses are involved supporting the event and competing teams as sponsors, partners and suppliers, and they all expect world-class facilities to be provided by the host venue,” the brochure states.
“The America’s Cup must deliver world-class hospitality facilities onshore and on-water to entertain these guests, and the host venue partners and stakeholders can use these facilities to engage with influential guests from around the globe.”
It also says that the “superyacht programme” will form an important part of the event and makes clear the need to satisfy those arriving into Cork harbour, should it be chosen, in their large boats.
“Up to 70 superyachts have attended previous events, owned by influential business people and private investors, seeking to entertain and do business in the host venue — powerful and important people ready to be impressed,” it states.
Coveney’s involvement in the project also included a briefing to the board of the Port of Cork. An official in the port company later relayed that they were fully supportive of “this amazing opportunity for Ireland”.
“Be assured the board and team will also fully support this project. I spoke to a number of board members following the call and all are very positive. Please don’t hesitate to pick up the phone at any stage if you require any more input.”
Emails also show the Irish bid team hosted a site evaluation visit for the organisers of the America’s Cup last June, indicating that Coveney requested Fáilte Ireland review the itinerary to ensure it was “all Covid compliant”.
Yet despite questions over the cost of the event and its viability, text messages between Coveney and a person that his department described as a “private Irish citizen” in August show the minister writing that it was “important to stay positive in public comments re the return and benefits for Ireland”.
Whether Coveney manages to convince his colleagues in the departments responsible for sanctioning the bid remains another matter. A spokesperson for the Department of Foreign Affairs said on Friday: “In relation to your queries on the current status of the bid, these would be better directed towards the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.”