Continuing our series of new-year interviews with sailing’s top personalities, we catch up with Paul Cayard, CEO of Artemis Racing, the 34th America’s Cup Challenger of Record. The legendary American sailor gives an update on his team and comments on the latest developments in the America’s Cup, including Ben Ainslie joining Oracle Racing and the important decisions of the Jury that, in his view, deal a serious blow to Emirates Team New Zealand’s alliance with Luna Rossa.
VSail.info: When we talked a little bit more than three months ago, I asked you whether you were contemplating having two AC45 yachts, like Oracle Racing at that stage, and your answer was that your budget didn’t allow you to do that. I now see that you have a second AC45 yacht. What has changed since then?
Paul Cayard: To be honest with you, our owner Torbjorn Tornqvist was always pretty convinced we should have two AC45 yachts. After the San Diego event it was pretty obvious how dominant Oracle Racing was all of a sudden. Before that, Emirates Team New Zealand, Oracle Racing and Artemis Racing were more or less competitive against each other in Plymouth and Cascais. However, in San Diego Oracle was really on a different level and they just came off three weeks of sailing in San Francisco with the other two AC45’s out of four they have. Torbjorn has been on me for a long time to get a second AC45 and after San Diego it became a priority for the team.
The other thing is that there was supposed to be an event in January and when that went away there was, of course, a bigger gap in the schedule which allowed for more training, if you have two boats. If you only have one boat it’s not as good. I didn’t mean to mislead you in any way and I told you at that time we were definitely thinking about it. When these changes came along, we bought the second AC45.
I don’t remember if I had mentioned that in our previous talk but, honestly, another factor was the crash we had with Green Comm in Plymouth. We had a damaged boat and we had to repaint the spare ACRM boat so that her hull matched up with our port hull. When we went to the expense of all that, it would have been money thrown away because we would have been obliged to repaint that hull back to white in order to give it back to ACRM. Instead, we bought that whole boat (Serial number 10) and that actually had the effect of saving Green Comm 20,000 to 30,000 euros because if we had to implement the original solution that would have been another cost on the Green Comm bill.
VSail.info: Now that you have two AC45 yachts what is the schedule for the three months leading to the Naples event? I suppose you will be training here in Valencia.
Paul Cayard: Exactly. As you know, the boats are in Valencia right now, in our Sagunto base, and we will start training on January 27th with both boats. We plan on really focusing on that for three weeks and do a very intensive two-boat program. We will try to raise our game within the AC45 events and we will certainly be aiming at winning one or two of them in 2012. We have won one of the first three, we want to be a front runner and we recognize we need to raise our game a little bit there.
VSail.info: One of the boats will, obviously, be helmed by Terry Hutchinson. Who will be at the helm of the second one?
Paul Cayard: It’s going to be Santi Lange. We talked about me doing it as well but I think it’s going to be Santi. We want to make sure that whoever does it can do it for the full three weeks. We don’t want to have any switching around because that would diminish the quality of the sailing.
VSail.info: Have you made any changes to the crew or will it be the same we have seen so far?
Paul Cayard: We are trying one new trimmer, Thierry Fouchet who was with Oracle in the last Cup. He will come to sail with us during that session and we will see how it goes.
VSail.info: What about the modified Orma60 trimaran you have. What’s the current situation?
Paul Cayard: We are not sure whether it’s going to sail again. It was good for us last year but it’s still in working progress. We don’t have a schedule to sail that again.
VSail.info: I might be wrong but I thought you planned to step a wing on that trimaran. Is that correct?
Paul Cayard: It’s a possibility but we don’t have any schedule for when it’s going to happen.
VSail.info: King Marine issued a press release a couple of days ago, stating that the construction of your AC72 yacht started a month ago in Sweden and that it is going along as scheduled. Can you give us an update?
Paul Cayard: It is actually going very well and we are ahead of schedule on building our AC72. As you know, the hulls have to be laminated in Sweden. Our molds were made in Spain, in Cartagena, and then were trucked to Sweden. The whole job of turning on the facility in Sweden and having builders there working and laminating happened during the holidays. The hulls are being laminated now, everything is going well and King Marine is doing a great job.
VSail.info: Will the boat be launched in Sweden?
Paul Cayard: No, our plan is to launch the boat in Valencia, after July 1st obviously, and we are looking at what our options are in regards to where we will spend all the 30 days of sailing. Initially, we will spend in Valencia at least 10 of the 30 days of sailing.
VSail.info: Does Artemis Racing plan to build two AC72 yachts?
Paul Cayard: Yes, our plan is to build two. The main elements of the boat building process will be similar to those of the first yacht but quite likely the final assembly will happen in San Francisco. As I told you, the first boat will be assembled in Sagunto but the second one in San Francisco. At this point the schedule for that boat is quite vague because a lot will depend on the first one. All the teams will have launched theirs, so we will be watching our competitors, trying to learn as much as we can about this new class. Back in 1992, when we had the first America’s Cup on the ACC boats there were huge evolutionary steps from one boat to the next. With il Moro di Venezia we built five boats and we came a long way from the first one to the fifth one.
Each time you have a new class you have the biggest steps from one boat to the next. Ideally, we would like to launch our second boat by May 2013 so that we have sufficient time to be comfortable with it. Obviously, the more you wait the more you learn and maybe the bigger progress you can incorporate in the second boat.
VSail.info: I think I’m covered regarding the update on Artemis Racing. Let’s talk now about the whole event and in particular the most recent big news, starting with last Tuesday’s announcement from Ben Ainslie. What do you think of the arrangement he has with Oracle Racing?
Paul Cayard: I talked with Russell about that, he had called me to tell me what was happening. If you take it for face value it’s a good thing for the America’s Cup. They could have just said Ben was joining Oracle Racing as a crew member but instead, having a sailor of the quality of Ben Ainslie, representing another country, Great Britain, in the America’s Cup World Series is a great thing for the event, for the public and I’m sure he will be a formidable competitor.
VSail.info: And a reason for your to sleep less when he joins Oracle Racing next year.
Paul Cayard: For sure that makes me sleep less. He’s a great sailor and I think that Oracle Racing have realized they will have to race their two boats in house against themselves in the summer of 2013 and they are getting ready with plenty of good sailors. In their afterguard they have Spithill, Bundock, Kostecki, Coutts and they now added Ainslie. They have these five afterguard to sail these boats and it didn’t come as a surprise to me.
VSail.info: Another recent development in the America’s Cup was a Jury decision regarding the alliance between Emirates Team New Zealand and Luna Rossa. If I’m not mistaken your team was the first to ask the Jury to rule on that cooperation between the two challengers. I have to admit I’m not aware of the details of that issue or what is at stake. Can you talk about it? Are you satisfied with the Jury’s ruling?
Paul Cayard: Yes, we are satisfied. The Jury ruled in line with our thinking which is that Luna Rossa and Emirates Team New Zealand cannot do what they said they would do. You haven’t read a lot about it because, basically, the ruling went against them and Grant Dalton hasn’t been speaking about that one as much as he’s speaking about the ones that go his way. It’s a big knock against them and they can’t sail the two boats against each other. It’s a big knock against their plans but it’s completely logical and it’s what Oracle Racing and we always believed to be the case and now the Jury confirmed that.
VSail.info: But in our previous conversation three months ago you mentioned that Artemis Racing and Oracle Racing would be training together, with their AC72 yachts, during the summer of 2012 in San Francisco. Why would Oracle Racing and Artemis Racing be able to do that while Luna Rossa and Emirates Team New Zealand aren’t allowed?
Paul Cayard: Yes, we might be able to do that but we might also be unable to do that. There are some technicalities with that too that could involve what’s known as the Surrogate Rule. In other words, if we were to train with Oracle we may become a surrogate for them and they would become a surrogate for us. There is an interpretation of the Surrogate Rule which would determine whether or not Artemis Racing and Oracle Racing or any two teams could sail against each other.
VSail.info: I still can’t understand why, as you claim, Luna Rossa and Emirates Team New Zealand definitely cannot sail against each other while you might be able to do so with another team.
Paul Cayard: The difference is that there are two rules involved. The first one, rule 33.4, prevents a team from making an agreement with another entity, it could be an America’s Cup team or not, such that the other entity would acquire a boat and that the first party, the team, would gain the knowledge and the benefit of the performance data or information from the sailing of that second boat.
The specifics required to be in violation of that rule are, first, to have an agreement between the two parties. Emirates Team New Zealand and Luna Rossa, obviously, have such an agreement. The second element is that the agreement has to entail that the second party, Luna Rossa in this case, would build or otherwise acquire a boat. They, obviously, have said that. Finally, the third piece of it is that the first party, Emirates Team New Zealand, would obtain design or performance information from the sailing of the second boat. The Jury ruled that if those three elements are in place, you are in violation of Rule 33.4. Based on Grant Dalton’s public announcements and Emirates Team New Zealand’s submissions to the Jury, they are in breach of 33.4 right now.
So, that’s a different case and you can see the subtleties. If you look at it from a competitive advantage you can see how advantageous it would be for Emirates Team New Zealand to essentially control the design of both of these boats. Then they could sail those two boats together and do a lot more development than Oracle Racing and Artemis Racing might learn by sailing against each other, not knowing the design of each other’s boats. Do you see the difference there? You can develop technically much more if you control the design of both boats.
There are two different rules that apply. It could be that Oracle Racing and Artemis Racing or Energy and Artemis Racing or any two teams may not be able to train together without invoking the surrogate rule. That could be and I would say that this is still being interpreted but the problem Emirates Team New Zealand and Luna Rossa have is a different one. It’s specific to Rule 33.4.
Emirates Team New Zealand and Luna Rossa, of course, aren’t saying a word about it because it is bad news for them. The truth is they got a haircut. It seriously curtails their dream or plan but it has to be said that Luna Rossa couldn’t even be in the race unless they bought the design from somebody. They could have bought the ACRM package and probably not have this problem. In fact, they wouldn’t have that problem. Had they bought the ACRM design they could have gone ahead probably and do some sailing with Emirates Team New Zealand. Because of the agreement and because they have such a strong collaboration agreement together to produce that second boat they can’t sail the two boats together without violating the protocol.
VSail.info: So, the two AC72 yachts, the Italian and the kiwi one, could be physically next to each other on the dock in Auckland but then they will then have to sail separately.
Paul Cayard: Yes and the truth is, and this will probably be elaborated a little bit more through some questions to the Jury, it could be that they cannot even observe each other. Here’s what Rule 33.4 says: “Any agreement, arrangement or other understanding, whether legally enforceable or not, by one person or entity (in this paragraph “the first person”), whether then a Competitor or not, with any other person or entity (in this paragraph “the second person”) that the second person will directly or indirectly build, acquire or otherwise obtain one or more
yachts of whatever type (in this paragraph “other yachts”) so that the first person can directly or indirectly obtain, in any manner whatever, design or performance information regarding the other yacht or yachts for use in the program of design, development or challenge of the first person, is prohibited.” As I said, the first party is Emirates Team New Zealand and the second one is Luna Rossa. The important part is “..so that the first person can directly or indirectly obtain..”
It says, it “can” obtain and I think they can’t even go on a rib and watch Luna Rossa sail because they could obtain design and performance information about that boat. So, the boats will be in New Zealand and they will have to stay further away from each other than any other competitors will. This is all the fallout now. It has been a very busy holiday season for the legal departments and nobody got a break. The Jury decision was issued on December 28th and now people will start thinking about all the problems this creates. In fact, Emirates Team New Zealand and Luna Rossa are probably spending a lot of time trying to figure out what they are going to do. The bottom line and the most important point is that with this decision, they can’t do what they said they were going to do. It’s a pretty serious blow to their plan.
VSail.info: Can Emirates Team New Zealand or Luna Rossa appeal or if “appeal” is not the correct word, is there a way for them to overturn that decision?
Paul Cayard: I don’t believe you can really appeal this decision but you could file other requests for interpretation. They could file another action, they could try to see if there is a way to plea their case differently but in this particular case, Case 06, the decision has been issued.
VSail.info: You said earlier that Oracle Racing would need to do their inhouse training with their pair of AC72 yachts. Why would they be allowed to do that? Can anyone do a two-boat training program with AC72 yachts?
Paul Cayard: Yes, but only after February 1st, 2013. In fact, you can’t launch a second boat until February 1st, 2013.
VSail.info: So, Emirates Team New Zealand and Luna Rossa can always train together after that date.
Paul Cayard: No, they can never train together. As I said it’s a different rule and Rule 33.4 doesn’t have any relativity to a date. You can never have an agreement such that the second party builds a boat so that the first party gains the benefit of the design and performance information. If two teams build only one boat, they could start two-boat training and sharing performance information before February 1st, 2013. They would be fine because they didn’t have an agreement with each other to produce each other’s boat.
Essentially, if you let Team New Zealand and Luna Rossa do what they are doing, you could make the case that Emirates Team New Zealand is launching two boats on July 1st. Basically, it’s like launching two sister ships. So, not only are they in violation of Rule 33.4, someone could even ask for an interpretation about the launch date rule. It states that you can launch one boat on July 1st, 2012 but you can’t launch your second boat before February 1st, 2013. You could make the case that Emirates Team New Zealand is actually launching two boats. I think they really have a problem now.
VSail.info: Another issue I wanted to talk about was the so called “Code of Conduct” that was agreed upon in San Diego. The America’s Cup organizers, in every edition, like to boast it’s the world’s oldest sports trophy. It has survived and prospered since 160 years without such a rule. Do you really think this event, the so-called pinnacle of the sport of sailing, needs censorship?
Paul Cayard: If you have people walking around the dock, going up to people that want to sponsor events, telling them a bunch of bad information with the aim to discourage them from sponsoring an AC World Series event, then my answer is yes, unfortunately, we need to censor them. If you have issues that you don’t like, you don’t air them out publicly. This is a commercial sport, basically a business. It’s like the NFL or the Premier League in England. The teams have a common interest, they are in business, in the entertainment business. They use sports as an entertainment and try to produce exciting matches. Of course they have business issues and they all don’t agree and they don’t all get along but where do they discuss those issues? They discuss them in the proper form, in meetings, just like any other business. Outwardly, to the public, you always tend to project a positive, professional image. The problem we had, unfortunately, was someone chose to air out his unhappiness, his issues, publicly, before trying to resolve them within the business environment of the America’s Cup. That has had the effect of discouraging some corporate partners from being involved with the America’s Cup, an unfortunate situation.