If you had the chance to talk to just one person about the America’s Cup, it would undoubtedly be Russell Coutts, not only because the Kiwi skipper is the most successful one in the 160-history of the event with four wins but, most importantly, because he’s the CEO of Oracle Racing, the current Defender. VSail caught up with Coutts in Cascais, right after a tough, long but successful day on the waters of the Portuguese city. Katusha, the Russian boat where Coutts is calling tactics, is leading the RC44 fleet races with 24 points, 14 points ahead of second-placed Team Aqua:
VSail.info: Two years have passed since you won the America’s Cup in Valencia and we are now more or less a year and a half before the next match in San Francisco. The top management of the America’s Cup Event authority went recently through a major change. Why do you change one organization roughly halfway through its mandate? Does it mean they failed in their job?
Russell Coutts: No, not at all. Richard Worth is now focusing on television and venue deals which is actually what he was doing prior to San Diego. Most of the broadcast deals are for the AC Word Series so far, with the exception of NBC in the US and, I think, TV New Zealand and one or two others that include the America’s Cup. All the others are just for the AC World Series. He now has to go and work on the deals for the America’s Cup.
I think that side of things is in a really good position right know. You must have read we announced the deal with Mediaset in Italy. Those channels, like Mediaset in Italy or Sky Sports in the UK are now taking live programming. Ten hours of live programming for an AC World Series event is a fantastic achievement, considering we have being going on for less than twelve months. The goal from the start was to create a better television product and I think there will be another broadcast arrangement, fairly major, pretty soon. This is a big step for the sport and broadcasters are now agreeing they are prepared to cover the sport live. This has been a major achievement but Richard has now to go back and finish those broadcast contracts.
It was a good strategy actually not to give them the rights right through to the America’s Cup because now everyone agrees the product is worth a rights fee. We can now start negotiating television deals appropriate for the coverage because the quality of the coverage is very good.
VSail.info: So, right now, would you state you are satisfied with the current situation of the America’s Cup?
Russell Coutts: There are, obviously, parts I’m happy with and parts I’m still unhappy with.
VSail.info: Such as?
Russell Coutts: The big focus right now is to bring more commercial partners. We have some excellent partners right now. Louis Vuitton has been a fantastic partner for years now and still continues to be. Obviously, Puma is a great achievement and we expect to have more to announce soon. We had a very good offer recently in one of the key categories but I can’t say more than that at this stage. Things are starting to move now but there is still a lot of work to do.
VSail.info: Is Larry Ellison happy with the current situation of the America’s Cup?
Russell Coutts: Yes and no. He’s very happy with the television product and he considers it a major step forward. He would have liked us to have had more commercial support today but you know, in a way, perhaps the time line was a little optimistic from day one because we didn’t have a television product. If you haven’t got a television product it’s hard to sell the event to commercial sponsors. Now that we have that and we have real numbers in terms of valuation and so forth we are in a much better position today than we were six or seven months ago.
VSail.info: If you had a magic time machine and you could go back to Valencia the day after you won the 33rd America’s Cup would you have done something differently?
Russell Coutts: Yes, a few things. I think, probably, we underestimated how good the television pictures would be for the AC45. If we had known that then, I think, we could have got away with a smaller America’s Cup boat which would have been cheaper. In hindsight that’s definitely something we probably do differently. In a way, lots of us, me included for sure, thought we needed a boat the size of the AC72 to really provide some scale and significance. However, you have to admit that looking at the television footage from the AC45’s that it’s actually pretty compelling, even if they’re smaller boats. That was a discovery this time and that’s definitely something to think about for the future and now that four teams have already their AC72’s under construction whoever wins can review that.
However, the AC72’s will be absolutely spectacular and at that time the value equations versus expenses might be better balanced in any way. I also think that you could do things such as making some elements of the boat one-design. I wouldn’t suggest making it all one-design but in order to save costs you could make some aspects of the boat one-design.
VSail.info: Since you mention the cost of the AC72 boat, this is the fourth or fifth RC44 event I attend and I have to admit I become more enthusiastic about the RC44 yacht. Wouldn’t it have been easier for the America’s Cup or even you to create an RC90, considering the fact it’s your very own creation?
Russell Coutts: It was considered but, frankly, if you sit down with the broadcasters today they would have a different opinion. Let me give you the example of La Sete, the Italian network that covered the 2007 America’s Cup in Valencia. They analyzed the figures from Valencia and decided it didn’t work for them. As good as we, sailors, think Valencia was, frankly, from a broadcast proposition it simply didn’t work well enough. It wasn’t the only thing that turned broadcasters off though, the legal problems for two and a half years didn’t help that.
However, it was the same description we received from major broadcasters in the USA. They simply told us, “Look, the sport as it is isn’t compelling enough for TV”. So we had a choice. We either kept it the same or experimented and made changes. The fact broadcasters are taking now live TV is a pretty good indication that it has a really good chance of working. In addition, don’t forget that an RC90 would also be very big and very expensive.
VSail.info: Maybe but I used the number 90 just to give an example. Why couldn’t it be an RC80 or an RC70?
Russell Coutts: Then you have the problem with the keel depth and you can’t go to a lot of harbors in the world. The multihull packs up pretty well and you can disassemble the hulls and pack them in a 40-foot container. Event the AC722 can be pulled apart and packaged. The logistics are a lot simpler and if you go to an AC World Series event you see there are only two cranes that lift the boats. It’s probably a lot more difficult lifting a bigger and heavier yacht. It’s much more complex, plus removing the keels is more problematic. Frankly, it’s hard to get a monohull that’s actually as visibly exciting across a range of conditions. The AC72’s will be flying a hull in probably less than six knots of wind. You can have a really good race with boats that move fast.
Another problem with the broadcasters were the delays we had in Valencia. We really needed a boat that could sail in very light winds but still able to sail in very strong winds.
VSail.info: I see from your answers that, for you, television is a fundamental issue. It seems to me that, in your opinion, we either have good TV or don’t have an America’s Cup altogether.
Russell Coutts: It’s pretty hard to imagine raising commercial sponsorship these days without having a media property that is actually creating value. Don’t you think? That’s why there was a major focus on changing the media value proposition. I think that we have taken the first steps, it’s still the early days but it certainly looks like it’s been accepted by the broadcasters. We had to address several things.
First, we couldn’t afford delays, like we had in the past. We had to narrow the chances of having a delay. Second, we had to have boats that were fast enough but even if we had multihulls without the course boundaries I don’t think the races would be anywhere near as interesting. But when you impose boundaries on the course and, more or less, force the boats to maneuver you can now program the racing to fit in a television time of, let’s say, 35 minutes. You know that by lengthening or shortening the race course by only a small amount you can be very close to that broadcast time. They are all good features.
Frankly, the discovery with the AC45 races is that there is a lot of passing, a lot of excitement, it is just as tactical as the monohulls and, frankly, the same sailors are still winning. It didn’t change the game so much that all of a sudden Dean Barker is not a strong candidate any more or Jimmy Spithill, the old monohull sailors. Quite the contrary. You’ll see that guys like Nathan Outteridge, who joined the Koreans, will be really good. I expect in the future this transition from Olympic sailing as these boats are more like sailing a dinghy, relatively. You’re going to get the top sailors out of the Olympics, like Ben Ainslie, Tom Slingsby or Nathan Outteridge, coming into the Cup and, frankly, they will be the ones to dominate the sport. That’s a good thing. In the old format we, honestly, had a lot of gray hair on the boats.
VSail.info: You have gray hair yourself though…
Russell Coutts: Yes, that’s what I mean. I had a great time in the America’s Cup but I think it should be more about young people. I think it needs to be more about the athletes and that was another intentional change, to make the AC72 a very physical boat by reducing the crew number, for cost reasons as well, that does favor a younger sailor. That’s why I think we’ll be seeing those top Olympic sailors coming once they get established in these boats.
VSail.info: Will you consider it a failure or a disappointment if there are only tree challengers next year in San Francisco?
Russell Coutts: We have four teams that are building AC72 boats right now. I think there is a good chance we get some more. There is a good chance we get a team from France and a good chance we’ll get the Koreans and the Chinese. There is still chance they can make it and if they do, it will be fantastic. In reality, I’d love to have 12 teams out there. That is probably the situation the America’s Cup should aim for in the future but right now I don’t think the value proposition has been established right. I think the costs are still too high versus the commercial return and if we can get that better balanced in the next year and a half or two years I’m sure you will see more teams competing in the Cup.
Probably where the Cup needs to go next time is to look at what we think the commercial value of a team is. Let’s say, we might decide it’s 20 million euros, for example, and you are trying to keep the costs under that figure so that the teams can be sustainable. Right now, if the commercial value is lower than the cost it’s clearly not sustainable.
VSail.info: Does that mean you would be in favor of imposing spending caps for the teams?
Russell Coutts: I think the sport needs to look at all sorts of options and there are a lot of lessons from other sports. There are a lot of methods that could be adopted and frankly the sport has a fair way to go to manage itself professionally, like the other sports do. That’s also one of the reasons we took the decision to look for a new CEO because the America’s Cup is in America and there is a significantly different approach in selling the sport in that country.
We can learn a lot of lessons from some of those big sports that have been through some of these processes before. Even the NBA is restructuring itself at the moment. The PGA doesn’t have a Q school any more and even NASCAR is considering shortening their race times in order to have a better format for TV. We have to be open minded and keep working towards getting the sport on a better commercial structure such that the teams can come in and know they can create sponsorship value and hopefully make a profit at the end of the day. That will be a sustainable activity and it’s not the case today.
VSail.info: The new, interim, CEO of the America’s Cup Event Authority (ACEA) that has just been nominated is Stephen Barclay who also happens to be the COO of your team, Oracle Racing. However, one of the cornerstones of what you have been promising for the last two years was the independence of the America’s Cup organization. Don’t you think there is a contradiction here? How independent can Barclay be in his new role?
Russell Coutts: The important thing right now is that ACRM, in other words the on-the-water organization in charge of the rules, the regulations, the international jury and all of that, is independent. Everyone accepts that and they truly are. You are absolutely right, the goal in the future should be to have an independent ACEA. However, right now, how is ACEA funded? We are very, very fortunate to have Larry Ellison underwriting this. The money just doesn’t grow on trees, it just doesn’t come out of nowhere! He’s underwriting this and therefore, obviously, if you were the one putting most of the money, you would want to have a fair say as to how that money is managed. In the future we should take the example of the American sports leagues and have the team owners jointly controlling ACEA. That would be, in my opinion, one of the models that should be considered but right now there is one person funding it and you can’t expect him to say, “Alright, I’ll put all the money and I’ll let someone else run it”. That doesn’t make sense.
I’m only referring to the commercial side. Don’t forget ACRM and Iain Murray were elected by the other teams and everyone accepts the fact that Iain Murray is independent and has a team around him that really run the races fairly and independently. From a competitive sense, right now, this is the most important thing. Commercially, let’s be honest, you probably want someone like Larry Ellison driving some of these decision, like the television because he doesn’t have a bad track record commercially. It’s probably the best we could get right now.
VSail.info: Larry Ellison in an interview in the Wall Street Journal two days ago stated he would rather have the AC45’s in the America’s Cup so that there are “more teams and more drama”.
Russell Coutts: Absolutely. Like all of us he looked at the AC45’s and realized the pictures were pretty good while we are still going through the expense of the bigger boats. Maybe we could have got away with, if not the AC45’s, something that is smaller than the AC72 and create a rule around that. That’s another thing about the multihulls. They do look spectacular at that scale and on television, with all due respect, I don’t believe that a product like the RC44, which is the same size as the AC45, would look spectacular on television and make the broadcasters pick it up. Larry is saying the same thing. What we need to do is keep the cost down so that, ultimately, there is a commercial return for the teams.
VSail.info: Enough about the America’s Cup in general, let’s talk about your team. Where is Oracle Racing standing right now in its defense of the Cup?
Russell Coutts: I haven’t spent a lot of time with Oracle Racing lately. I have been really focused on the event for quite some time now.
VSail.info: You are the CEO of the team though, aren’t you?
Russell Coutts: Yes but I just haven’t had much time to actually be the CEO of Oracle Racing. They are progressing well at the moment. Jimmy Spithill is, obviously, leading all the sailing operations and so forth. He’s 33 years old and I think he’s also capable of leading the team now and that’s a good thing. I think it’s a great thing. We want these guys to grow, I certainly want that. I think that it wouldn’t be acceptable, probably, for him to just keep the same role, year after year after year. He has to grow and have more management responsibility and ultimately do what I was doing at Alinghi or Oracle last time. I think it’s great.
VSail.info: Is there a probability or possibility that Spithill will not be helming the defending yacht in San Francisco in September of 2013?
Russell Coutts: I think it’s a low probability, let’s face it. I think that right now most people would agree that he’s one of the best, if not the best, out there. He’s pushing real hard, he’s sailing A-Class cats and all sort of things that would up his skill level for the America’s Cup. We are really very happy with Jimmy but, obviously, in a campaign like this, and he’s the first to accept that, there are two things, particularly when you are defending. First, you need a good training partner and that’s why we brought Ben Ainslie in. I think these boats are ideal for Ben. As I said, as it turned out and probably none of us realized that the format would favor this sort of sailors so much. I’m talking about the Iain Percys and the Ben Ainslies of the world, that sort of guys, none of us probably realized when the concept was being developed that the format was perfect for them.
We need an excellent backup if something happens to Jimmy. It would simply be ridiculous to risk the whole campaign or set the whole campaign on one person and not have a backup. But he also needs competition, he needs to be pushed by guys like Ben Ainslie and Darren Bundock.
VSail.info: Last but not least, when are we going to see the Oracle AC72 launched?
Russell Coutts: At the end of July. We have the wing quite progressed right now. There are four teams that plan on building two AC72’s and if we get a few other teams they will be one-boat programs. It’s a big task, I can tell you, to build two of these boats. You’ve got plenty of work to do.