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Kiwi Home Defence to RNZYS and TTNZ Trust

October 21, 2021

Dear  General Committee Members and Trustees,

Confirmation of funding for celebration of the 37th America’s Cup in Tāmaki  Makaurau

We refer to our letter of 14 September 2021 (copy attached) in which we (my  personal private interests and my associates) outlined our firm commitment of  $20 million of funding for the Cup defence and expressed our considered  position that a further $20 million would also become available, meaning that  a sum of not less than a total of $40 million would be available from private  sources. At the time, we understood that would leave a $40 million funding  gap and we proposed that $40 million gap be bridged with a combination of  further private and government funding.

Today, we are writing to reinforce and refresh our 14 September letter and  to increase the amount of our firm commitment to support the upcoming defence  of the America’s Cup should it be held here at home in Auckland. Our  assessment is, with the additional commitment we are making today, the Royal  New Zealand Yacht Squadron (RNZYS) and Team New Zealand (TNZ) are now in the  position to confirm Tāmaki Makaurau Auckland as the venue for celebration of  the 37th America’s Cup in 2024.

During the month that has passed since we made our first proposal to  support the RNZYS and TNZ to stage the defence of the Cup here, we have: a)  taken further soundings with potential donors to gauge interest in supporting  a home defence; b) researched publicly available documents detailing revenue  and costs of AC36 in Auckland earlier this year; and c) reviewed TNZ’s  position concerning the funding required for the team and the financing TNZ  backs itself to raise. We address these matters in this letter.

The Home Defence Kiwi

Home Defence considers that the defence of the America’s Cup in 2024 can,  should and must be held here at home in Tāmaki Makaurau. We consider, and  this letter demonstrates, that the required funding is available to support  the Cup defence at home.

The 2024 America’s Cup defence  provides a magnificent opportunity to announce our country is back and open  for business as the Covid 19 pandemic recedes. This superb event, with its  huge global audience, would be very beneficial for re-establishing New  Zealand’s international linkages and visibility. It will also maximize the  return on the significant investment New Zealand taxpayers and Auckland  Council have made in the legacy infrastructure built for AC36.

We have been working tirelessly to ensure a successful home defence can be  staged since the Commodore of the RNZYS asked at our first meeting on 1 June  that we seek to arrange funding. We have 2 been successful in that mission,  and we now invite TNZ and the RNZYS to consider our proposals in the positive  and constructive way they are made. We are passionate supporters of TNZ and  its sailors, designers, boat builders and shore crew.

The discussion which follows focuses first on funding for the 2024 Event  and second on funding for our Team (TNZ).

Funding for the 2024 Event

TNZ advised at our first meeting1 that $80 Million is the funding required  for the 2024 Event. The America’s Cup Event Report2 for AC36 however  discloses that the event itself cost America’s Cup Event Limited (“ACE”, a  sister company of TNZ) $45.136 million to stage. Of this cost, according to  the Report, $40 million was provided by the New Zealand Government and the  balance of approximately $5 million was met through sponsorship, TV revenue  and other sundry revenue.

For the AC37 Home defence in 2024, our understanding is that the New  Zealand Government proposes to direct its contribution towards support for  the event itself because this aligns best with their tourism and economic  development objectives. It is also our understanding that when one excludes  certain non-recurring AC 36 expenditures, specifically the Challenger of  Record spend of $7 million and the Team NZ Event & Class Design spend of  $3 million, the cost of staging the AC37 event by ACE3 will be circa $35  million. This $35 million figure excludes the net costs of staging the  Challenger Series regattas, which will be met by (or through) the Challenger  of Record.

For Auckland in 2024, the Crown and Auckland Council offered a total of  around $99 million, made up of in-kind support ($68 million) and cash ($31  million). The $31 million cash sum offered, one assumes, is the amount the  Crown considers is actually required to meet the costs of the event itself,  with TV revenue and other sundry revenue covering any additional balance of  2024 event costs.

To the extent there is any anticipated shortfall over the Crown cash offer  of $31 million, it will not be significant. Such shortfall (if any) could be  the subject of a further negotiation with the Crown and Auckland Council. It  seems apparent that The Crown cash offer of $31 million and the sponsorship,  TV revenue and other sundry revenue will fully fund the 2024 Event. Please  advise if our understanding of these matters is not correct. Funding for Team  New Zealand TNZ advised at our first meeting4 that $120 Million is the  funding required for the Team. TNZ has said5 it is committed to funding $80  million from commercial sponsorships and private donors. This leaves a  balance of $40 million to be committed to fully fund the Team. Again, if our  understanding of this is not correct, please advise us.

Funding for Team New Zealand

TNZ advised at our first meeting that $120 Million is the funding required  for the Team. TNZ has said it is committed to funding $80 million from  commercial sponsorships and private donors. This leaves a balance of $40  million to be committed to fully fund the Team. Again, if our understanding  of this is not correct, please advise us.