America’s Cup Cats on TV
If your definition of business is strictly money, sure.
Actually, that’s pretty much the definition of a business. Businesses can and will spend money on perception, image and ego, but at its core every business is about making money through commerce. An AC team is not a business. They operate at a total loss (tens of millions of dollars in the red) with no hope or expectation of ever recouping that money. They create no goods, they provide no services and they generate no revenue. They are more akin to a charity, IMO, but some strange perversion thereof that doesn’t actually do anything charitable.
My overly optimistic hope is that the thrill people got from watching a sport they never thought they’d give a fig about will get people engaged with sailing. or kiteboarding. even get in a kayak. anything. and take your kid.
But in my most feverish opium den fantasies, Larry Ellison finances a class of AC13 catamarans for kids 8-13, so that we can grow our own Dean Barkers and Ben Ainslie’s. At least half of those kids should be on a scholarship to participate (thanks, Larry!). These little souped up, slimmed down Hobie Wave type of boats would compete all over the bay, and the country. Want kids to get pumped? Let them fly a hull. Their national (and soon world) championships would take place as part of the AC, right in front of the SFYC and Marina Green.
Or he could just dump a million bucks into the Treasure Island Sailing Center, our super cool, but somewhat “rustic” public sailing facility.
right?
The other thing about it all is the R&D side…...
There are lots of things which are pretty mainstream now which were wildly expensive cutting edge technology not so long ago….....It will be interesting to see what filters down as a result.
If your definition of business is strictly money, sure.
Actually, that’s pretty much the definition of a business. Businesses can and will spend money on perception, image and ego, but at its core every business is about making money through commerce. An AC team is not a business. They operate at a total loss (tens of millions of dollars in the red) with no hope or expectation of ever recouping that money. They create no goods, they provide no services and they generate no revenue. They are more akin to a charity, IMO, but some strange perversion thereof that doesn’t actually do anything charitable.
I beg to differ. Any business that gets larger than a couple hundred employees is there for shareholders, not short term financial return, hence the concept of return on investment. Business valuations are in multiples of annual sales revenues - because the people investing in them see the possibility of getting more than just a steady annual profit / dividend. Larry Ellison knows this quite well, and larger businesses buy and sell other businesses to gain access to customer bases, interesting technologies and key talent.
Oracle makes more more through acquisition growth than they do sales of SQL database products. One of Oracle’s key acquisitions was to buy a product called MySQL - a freely available open source SQL database product pervasive throughout the Internet and websites. Because this product is free, they didn’t buy it for the revenue potential - they bought it for the largest SQL customer list on the planet. Oracle now markets their “for profit” products to these people aggressively. This all occurred after many years of Oracle talking trash about MySQL as a substandard SQL product.
Image enhancement and advertising are expensive - so is sailboat racing. If Oracle can combine two expensive activities into one legitimate business expense it is worthwhile. The IRS can’t say Oracle hasn’t gotten good value representation from their defence of the America’s Cup - all they have to do is add up Youtube view/minutes and TV viewing audience. Purchasing the same viewer time for pure commercial advertising would have cost much more, even taking the R&D, build cost and talent cost.
I’ve got to say I like Chris’ idea of funding the development of new sailors a lot. +1.
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Bill in Ottawa
I just saw on Paul Bieker’s blog that he designed the foils and rudders on the winning boat, and it looks like he was at the event. Congrats to Paul, he is a great guy.