Businessman offers to pay for audit of budgets to resolve Americas Cup hosting impasse

The multi-millionaire businessman behind a campaign to keep the America’s Cup in Auckland has offered to pay for a top-flight accountancy firm to independently audit the yawning differences between his budget and those of Emirates Team New Zealand.

In the latest salvo over hosting the world’s oldest international sporting trophy, former merchant banker Mark Dunphy said an independent accounting expert at a top four accountancy firm should compare the numbers each side has put forward.

Repeating an offer to document his pledge to put $40 million towards defending the cup in Auckland, Dunphy believes there is sufficient funds available to successfully defend the cup in Auckland.

Emirates Team New Zealand responded by accusing Dunphy of deceit, saying it would have nothing to do with him.

Even before it had successfully defended the America’s Cup in March 2021, Team New Zealand had confirmed it was examining hosting the next event overseas.

Team New Zealand boss Grant Dalton has claimed his preference is to host the 37th running of the America’s Cup in New Zealand, but has repeatedly said he does not believe funds would be available.

At the annual meeting of the Royal New Zealand Yacht Squadron in December, Dalton claimed budgets put forward by Dunphy contained a $50 million shortfall, as he accused Dunphy and former Team New Zealand director Jim Farmer QC of “misinformation”.

The meeting took place days after the Herald revealed Dalton had been warning squadron members Team New Zealand could collapse if it was forced to defend the cup at home.

“So yes, having the event in Auckland with a $50m shortfall in the budget, you can bet your bottom dollar ETNZ will inevitably lose and this will lead to its demise when up against the budgets and strength of teams like Alinghi, INEOS Britannia, Luna Rossa and American Magic. This is in fact a hard reality that Dunphy & Farmer have spun into a ‘threat’ via their aggressive PR campaign,” Dalton told RNZYS members, according to a Team New Zealand press release.

Dalton has claimed a successful defence requires a $200m budget, split between a team budget of $120m and an event budget of $80m.

In seeking interest to host the next America’s Cup, the “consistent ask of potential venues has been essentially $120m”.

On February 1, Dunphy sent a detailed response to the flag committee of the RNZYS, comparing what it said were Team New Zealand’s numbers, and its own.

“In our view Mr Dalton’s presentation in fact made it clear that there is funding available in excess of the combined total of $200 million for a successful defence in Auckland.”

Dunphy’s breakdown shows that, with a $120m host venue fee for an offshore defence, the cup would likely run a surplus of $53m.

Even without the host fee, through support from the Government ($31m) an additional $10m from sponsors and supporters ($70m verses $60m offshore) and $40m provided by his campaign, Dunphy asserts a local defence could achieve a $14m surplus.

Conceding that the differences between his assumptions and Dalton’s were “significant”, Dunphy said the discrepancies “can only be resolved through a proper due diligence exercise”.

He proposed the appointment of an independent third-party accounting expert to review the budgets and forecasts, suggesting one of the “big four” accountancy firms that had no audit conflict be appointed.

“The RNZYS and TNZL will need to co-operate fully in this investigation and review. Kiwi Home Defence will totally co-operate. Kiwi Home Defence will also meet the costs of the third-party accounting expert which will undertake that investigation and review.”

In a statement, RNZYS commodore Aaron Young said he was “surprised” the Herald had obtained the letter.

“The RNZYS is considering its response.”

A spokesman for Team New Zealand said in a statement that Dunphy “continues to embellish numbers through either an ignorant misunderstanding of the America’s Cup or intentional manipulation and deceit”.

The statement did not address whether it would co-operate with an audit, but stated the team “will have nothing to do with Mr Dunphy or his cohorts”.

A spokesman for Dunphy said it was “unfortunate that Mr Dalton once again is playing the man” rather than engaging in detail.

“Mr Dunphy is in no way being manipulative or deceitful and is offering to fund independent financial analysis to enable the squadron leadership to determine that the Cup Defence can be held in Auckland. If Team New Zealand will not engage, that will speak volumes.”

Both the match venue and the event date is due to be announced by March 31.

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