Dr Gibbons On $25M AC Sponsorship Guarantee

October 22, 2015

[Written by Don Burgess]

Bermuda has so far earned back more than $5 million of the $25 million sponsorship guarantee to the America’s Cup Event Authority.

Dr. Grant Gibbons, Minister of Economic Development, told Bernews that Government was well on its way to clawback the sponsorship money as part of the deal for the America’s Cup.

Bermuda can earn back 30% of any new sponsorship agreements signed by the ACEA. Money from long-time sponsors like Louis Vuitton does not count towards this total but new sponsors like the Bank of Butterfield do.

Dr. Gibbons said as part of ‘being taken seriously’ by the ACEA, Government promised $15 million upfront, all of which had to be spent in Bermuda, and another $25 million in sponsorship guarantee.

Government paid the ACEA $1 million in 2013-14, $4 million this budget year and will pay another $5 million in each of the next two budget years.

Video highlights of the America’s Cup World Series in Bermuda:

He said Valencia, Spain — which hosted the America’s Cup in 2007 — paid the Euro equivalent of $51 million to the ACEA.

“Part of the requirement was that this was to be paid in Bermuda dollars and spent in Bermuda,” Dr. Gibbons said.

“It’s not as if we’re writing a cheque and it’s flying out of here. That’s money that’s being used to stimulate the economy here.”

He added that the lengthy negotiation process saw Bermuda come out ahead by agreeing to underwrite a $25 million guarantee rather than forking out that money with no chance to get it back.

“The proviso was that every sponsor that Bermuda introduced, we would have a clawback of 30% of whatever that was. So if a sponsor came in at $3 million, we would get $1 million of that back against the $25 million.”

Dr. Gibbons said Government has been very proactive over the past nine months of introducing people to the ACEA who could write a sponsorship cheque.

He added Ironshore has recently become a sponsor of the America’s Cup, which helps Bermuda’s bottom line. Some of the other sponsors include BF&M, Hamilton Princess, Butterfield & Vallis, and Gosling’s.

Slideshow of the America’s Cup World Series in Bermuda:


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“We haven’t done an accounting recently, but we are somewhere between $15 million to $20 million in round numbers of what we owe on the guarantee. That will continue over the course of the next year or two,” he said.

Dr. Gibbons said a portion of ticket receipts for the races and concerts in 2017 will also count towards the guarantee.

“If San Francisco was the model, then we will have successive concerts in Dockyard.”

He added: “Conceivably we could take that down to $0 but that’s a fair amount of sponsorship.”

Dr. Gibbons said Government has been aggressively pursuing sponsors both in and out of Bermuda to try to make this as close a reality as possible.

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Comments (34)

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  1. Vincent Vega says:

    “We haven’t done an accounting recently”. Yeah, who cares about silly accounting when Govt can just add it up in it’s head. Same logic applies to the unfunded pension liability no doubt.

    • jt says:

      I hope you’re not a union member.

      That said, a commitment to quarterly accounting of the event and publishing the results would be a wise pr move.

      • Dealing with the matter at hand, no one is mentioning that we’ve bidded on America’s Cup in the past,so $77 million plus and these multi- millionaires and billionaires can afford to sponsor themselves.

        • serengeti says:

          I can tell you wrote that without any outside help.

          • Come Correct says:

            I won an item on eBay the other day after I bidded on it lol.

        • jt says:

          I used to think he was lying but I think he’s just a just a graduate of Burt’s math class.

    • It would be appreciated if “certain accounts” were to be looked into…Say starting from a decade ago.

    • Family Man says:

      How are those union accounts coming along? How many years behind are they?

      • True Onion says:

        Good question worthy of an answer but do not hold your breath.

  2. bluebird says:

    @ vincentvega,
    Don’t worry about the unfunded pension liability you and other can have your share of the HUGE DEBT that was incurred under the PLP/BIU administration and then pass it on to you children and grandchildren.

  3. Vulcan Trash Cleaner says:

    well on it’s way ???????????

    and the truth is..it’s ONLY 1/5th of the way,much less than a quarter!
    for those that think a 1/5th is a measure of booze!

  4. LOLOLOLOLOLOL says:

    Well that will quell the majority of the readers.

    Now, for those with inquisitive minds who understand the process will not be satisfied. Simply because, Dr Gibbons has not even explained where that 5m he is talking about suddenly came from. He simply said we made it back. I for one would like to know where did we make that back from?
    Not saying we didn’t make it back, but I would just like to know whats going on with my countries funds and how we are calculating these numbers. Am I asking for too much?

    • serengeti says:

      “I would just like to know whats going on with my countries funds” (sic)

      I think the Auditor General thought the same thing when he was being arrested.

      • TheUnamedFeeling says:

        To avoid partisanship I feel I must preface every comment I post on this forum with “I neither supported the PLP or support the OBA.” I believe governments worldwide are decaying bloated leeches charged with no other essential task than “coercing” tax dollars from the host populations in order to pay off its PRIVATE debts to central monetary authorities – with that said…

        Serengeti with an attitude like yours – you are part of the problem – not the solution – that problem being blind loyalty to your masters, lets call it them the “alliance”. You dare not bite the hand that feeds you by asking questions that should be asked of ANY administration would you?

        Lions Roam the serengeti…lap dogs like you sit under tables waiting for scraps…

        • Zevon says:

          Asking for an accounting regularly, like every year, is a good idea.

          Demanding an accounting in mid-October is a stupid. We all know why it’s being done. And we all know why you don’t address the comment about the Auditor General.

    • Catalyst says:

      Are you looking for the exact sponsorship listing? ie who is paying what?

  5. swing voter says:

    Gibbons got this thing all figured out, or else he wouldn’t have bothered with it. Bermuda will show the bigger venues how ROI works when a favorable tax structure ensures a win win …. Uncle Sam, sit up straight, stop wining and pay attention LOL….Tax Haven? Hell yeah and we’re proud of it 2!

  6. rhonda says:

    Fuzzy Math, to satisfy the gullible

    • Bermyman says:

      “At the same time, consumer confidence in Bermuda is at its highest point for the past eight years, sitting at 97.2 after the second quarter of 2015.

      “Business leaders believe that the economy has improved over the past twelve months, and that it will continue to grow over the next twelve months.

      • Come Correct says:

        Right, like she said, fuzzy math (s) to confuse the gullible.

        • Bermyman says:

          “The HSBC Business Confidence Index, representing an overall benchmark of business leaders’ assessment of economic conditions at the present time and in the future, has increased to 105.5 from its inaugural score of 100 established in 2014.”

          So you are saying the professionals are fuzzy at math? Yet Burt does not know what the difference between revenue and profit is? Please!

          Economic benchmarks and their calculations are not a joke, but maybe they were to the PLp and that is why we ended up on a Fiscal cliff. One that you clearly do not understand.

    • swing voter says:

      yeah Rhonda….”we had to deceive you” lol “we will have a hotel built” lol oh wait remember this one from 2010? “the economic recovery has begun”

      #falling over laughing out loud#

    • Zevon says:

      Oh right rhonda. It’s well-known that everyone gets a current accounting done every year in mid October. Of course.
      Where are the completely up to date, as of yesterday, union accounts?

  7. silk says:

    Wow the hatred is so thick!

  8. rhonda says:

    ACBDA is an arm of the Oba, what sort of reporting are we the public expecting. How many ledgers is a ACBDA running.

    • inna says:

      more than the unions!

    • Spit Bouy says:

      @ rhonda,

      LOL, & the BIU is a part of the PLP but they don’t bring in a penny to the coffers. You’re pathetic, as usual.

      Yawns turns the page,

  9. Ann says:

    was wondering where all the paid bloggers were this past weekend! was a bit worried about you, glad to see your ok and still drinking the tea!

  10. NT says:

    Lies, fairytales and fallacies.

  11. Jadon says:

    It’s not how much we make back… How much have we spent to so far… We can make back 200 million but if we spend 300 million it’s no help!!

  12. Northshore says:

    Thank you OBA Government for bringing this WORLD Event to Bermuda the Americas Cup! We all, and I mean “ALL” know this is way outside the skill level of the PLP!!!!!!!!