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Cup of Plenty Turns Up Empty in S.D.

Times Staff Writer

Just one year ago, San Diego was giddy in anticipation of the $1-billion windfall the America’s Cup regatta supposedly would bring to “America’s Finest City” in 1991.

But now, with a drastically changed timetable for the races, the expected cash flow has not materialized, and even the race’s organizers are having difficulty squeezing enough money out of the event to keep afloat.

Sail America, the organization responsible for financing both the event and the American defense, is operating on a $13-million budget, according to spokesman Tom Mitchell. So far, with only days to go before the first race, the group has raised about $10 million. “We will have a hard time making ends meet this time around,” he said.

Uncertain Timing

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Sail America officials figure it will take about $6 million to stage the event itself, including the cost of publicity and race management. Another $7 million is earmarked for the American defense, to be spent on the crew members and on the design, construction and maintenance of the boat.

But the uncertain timing of the race made fund raising difficult. When a New York judge finally made a decision in July that meant the race would be held two months later, there wasn’t enough time to cover the financial bases.

“It was difficult for us to convince people to give money when we didn’t know when the race would be held,” Mitchell said. “But we are still gathering personal donations, and, when people buy our merchandise, that will help pay our bills.

“That’s one of the reasons we have been enforcing our right to the America’s Cup trademark--we have to be very stiff on that,” he said. “Many people buy those articles that say ‘America’s Cup’ on them with the feeling that they are supporting the event. But some individuals are keeping the profits, and that is money out of our pockets.”

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For example, Mitchell said, Sail America believed it necessary to take strong action against entrepreneur Don Parisette. The group won a preliminary injunction in federal court last week against Parisette, who was selling souvenir items bearing the event’s name.

Retail outlets selling official souvenirs are licensed by Sail America. As of Thursday, there were 48 official America’s Cup retailers--34 of them in San Diego County, at such diverse locations as the San Diego Yacht Club, the Perfect Party shop in Escondido and a gift shop called J. J.'s Jollyboat near Seaport Village. In addition, Canterbury of New Zealand provides America’s Cup merchandise at 14 of its out-of-town clothing stores, taking the event name as far as Phoenix, Houston, New Orleans and Norfolk, Va.

Depends Whom You Ask

Suggested retail prices for America’s Cup merchandise range from $4 for a visor to $40 for a framed poster, with the prices of short- and long-sleeved T-shirts, polo shirts, baseball caps, tote bags, coffee cups and lapel pins falling in between. About 75% of the wholesale price of each item sold is funneled back to Sail America, Mitchell said. And sales, he said, are going “real well.”

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At Pacific Eyes & T’s, one of the largest retailers of souvenir T-shirts in the county, the America’s Cup merchandise is selling “OK.” Company spokesman Dan Goodman said the shirts “haven’t sold tremendously” at the chain’s 12 outlets.

“It’s an OK item, but it isn’t phenomenal,” Goodman said. “It isn’t like the Super Bowl. Because of the black cloud which is over this event, it is not being treated as a serious sporting spectacular.”

The Kiwis, who can use the America’s Cup logo on their merchandise as long as it also specifies that they are the challengers, also are drumming up money through souvenir sales. For the past week, the New Zealanders have sold T-shirts, tank tops, sweat shirts and polo shirts for $15 to $22 from a bayfront stand on Gull Street.

“They’re selling quite well,” said Debbie Hanrahan, girlfriend of one of the Kiwi crew members.

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Sail America is receiving its major funding from three corporate sponsors: Marlboro, Pepsi Cola and Merrill Lynch, each of which pitched in $2.5 million. For their money, Mitchell said, “They have the right to be involved in everything that we do.”

The companies’ logos are prominently displayed at the Sail America media center, at every news conference, and a spinnaker bearing the name of each sponsor will be unfurled during the race for the eyes of thousands of television viewers.

“In this day and age, with the expense of everything, we couldn’t do without corporate sponsors,” Mitchell said. “Without them, we wouldn’t have the money and we wouldn’t have an event.”

Other companies have given their time and their products in exchange for the exposure. Louis Vuitton, a designated “host” of the event, is spending an estimated $700,000 to create and operate a media center in the former police headquarters on West Market Street. In addition, 24 “suppliers” have provided everything from computers to boating shoes, and sometimes money, according to Mitchell.

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All sponsors, hosts and suppliers who contribute to Sail America are backing both the event and the American team. Sail America is the event organizer, responsible for fund raising, and when the Stars & Stripes defense syndicate requires money, Sail America pays its bills, Mitchell explained.

Stars & Stripes skipper Dennis Conner, however, does not collect a salary from Sail America, according to Mitchell. Conner is supported instead by private donations and whatever sponsorship deals he has struck for himself.

As far as projected economic benefits for the area, Greater San Diego Chamber of Commerce President Lee Grissom figures the America’s Cup is now a moot point.

“This is really a non-event from an economic standpoint,” he said.

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Comparing this week’s race to the one originally planned for 1991, Grissom said: “We obviously are talking about two entirely different kinds of events. One of them would have taken place literally over a year . . . . Now that has been telescoped into a month.”

The $1.2-billion windfall estimate was “conservative,” he said, based on the economic benefits that Fremantle, Australia, realized when the America’s Cup was held there in 1987. An estimated 160,000 people attended the races, and Fremantle garnered $639 million. The figures were subsequently adjusted upward for San Diego, presuming that as many as 2.5-million spectators would attend.

“We have as many people between here and Santa Barbara as there are in all of Australia,” noted Grissom.

“What we’re seeing now is 18 months of arguing followed by a couple of boat races. It just does not have an international flavor,” he said. “Frankly, I’d like to see them get in the water, win the race, and get on with the event we had originally planned for 1991.”

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