Here’s another of those inconvenient questions: is it really worth our while for New Zealand to be involved in hosting global sporting events? Or more to the point is it worth our while, the way we go about it? Yes, I know … participation, competition, world stage, all that … but given that it’s actually costing us significantly more than we can expect to make to host the Rugby World Cup, for example, how do we intend to get a payback? And the $36 million for the America’s Cup – what are we projecting that will bring home?
My sense is, it could be worth it – but it probably won’t be. I don’t get the sense that each of these initiatives is a calibrated and layered contributor to a defined and well-laid out New Zealand strategy designed to get the nation from point A to point B by lifting our competitiveness and our margins. In fact, I don’t get the sense that the Government has an economy-wide story right now that will gain us a step-change.
On the contrary, the approach I’m seeing seems somewhat akin to throwing multi-million darts at a global events board in an increasingly desperate search for an economic bulls-eye. These are multi-million decisions that, on inspection, are far too piecemeal, and require far more money to make them truly pay their way than New Zealand has available.
We have stories, and some of them are amazing stories: a tourism story; a yachting story; an All Blacks story etc. What they don’t add up to, and report to, is a compelling value equation.
Don’t get me wrong, I’m a huge believer in the need to invest in events – but given how much these particular events are going to cost, were these the best events for New Zealand to choose? Are they delivering us bang-for-our-buck or just expensive bragging rights?
What do they give us an opportunity to tell the world that the world doesn’t know already? How do they add value? And how many more times will we make mistakes like these?
In this article in the Herald, the Minister says the World Cup will have lasting economic value for New Zealand because the country will be building its brand on the international stage. “We convince more tourists to come here, we convince more businesses to do business here with New Zealand companies and enter partnerships with them.” That sounds great. But the numbers don’t bear that out at all. New Zealand isn’t going to make anything. In fact, we’re staring down the barrel of a $500 million loss. So if you thought the price of admission to the RWC games was high already, it just went up $120 for every man, woman and child.
And the America’s Cup. OK, I get that in some form it might help our boat-building industry, but where does it specifically contribute to the wider NZ brand story? How do a bunch of freelancers in a catamaran add to our national competitiveness? It’s not a facetious question.
If we got offered the Olympic Games or Formula One, would we take those too, knowing that the cost-benefit ratios would be irresponsible? (Just so you know, I think the way such events are priced and structured generally makes them an irresponsible decision for most countries.) The sad thing is, I think New Zealand might be sorely tempted. For all the same reasons.
It’s healthy to love sport and competition. It’s irresponsible to get involved in directly and publicly funding events that don’t advance our national brand and our national economy.
Which leads me to all the arguments we keep hearing about intangible benefits. Intangibles in this context strike me as a concise way of saying that no-one actually knows what we’ll be getting, but they’re sure there will be something.
I have no doubt at all about the sincerity and commitment of those preparing for the Cups. But I’ve never seen a strategy yet where an incoherent story championed in different ways by a whole range of parties with different agendas suddenly gained traction and delivered “intangible benefits” that amounted to hundreds of millions in real economic benefits for everyone.
What do you think?
