America’s Cup: One step forward, five steps back

Posted on 18 June 2013 by Valencia Sailing

In order to have an America’s Cup match one needs just two teams, two boats, the Defender and the Challenger. There is no inherent obligation to have 10 challengers from all over the world, low budgets or extensive TV coverage. Whoever wins it and then organizes it doesn’t have to abide to any rules that dictate it should be turned into a commercially-viable and self-funded spots property. When Larry Ellison beat Alinghi on the waters off Valencia more than three years ago, he didn’t have any obligation to do any of the above. However, both him and Russell Coutts, made exactly all those promises, claiming they would turn sailing into a major sport, quite often bringing as an example NASCAR.

With the “Summer of Racing” in San Francisco a mere two weeks away, it is more than clear that America’s Cup organizers have failed to deliver on practically every promise they made in the last three years. Not only will this Louis Vuitton cup be the poorest one in terms of participating teams it is still unclear what the schedule will be. We run the list of unfulfilled promises and examine what results they might have.

Our wish is that whoever is successful next September in San Francisco, doesn’t hire any self-proclaimed messiah that thinks is smarter than anyone else in the sport. Sailing isn’t and will never be soccer, football, baseball or basketball. If an approach works marvels in these major mainstream sports, there is no guarantee whatsoever it will be successful in sailing as well.

Do I know what the magical solution is? No, I don’t and if I knew it I wouldn’t be running a sailing website, I would be running a sailing event. However, a first, logical, approach would be to make incremental steps on what has proved to be successful in the past.

This was meant to be an America’s Cup marked by certainty. Teams, sponsors, TV networks would all know exactly what they were getting. The dreadful experiences of long delays on the water and cancellation of racing were meant to become a part of the past. However, reality can’t be any further away from those promises. It is still unclear what racing will be during the Louis Vuitton Cup round robins and in fact, organizers have stopped selling tickets, even for the semi-finals. It is true though, that this change of plans is due to the unfortunate and tragic accident onboard the Artemis AC72 yacht but it is also a consequence of the scarcity of teams.

A Louis Vuitton Cup with just three teams was always running the risk of severe interruption in the case of an adversity that would affect just one team. It doesn’t have to be tragic or fatal but what will the effects of a crash between two boats be, especially if they are unable to sail for a week? When Russell Coutts presented the “new” America’s Cup on September 13th, 2010 in Valencia he promised that “with the AC72 we will be able to race from 3 to 33 knots of wind speed” and that “the new AC72 will sail in a wider range of winds.” Unfortunately, the revised rules following Andrew Simpson’s death call for a wind limit of just 20 knots in the month of July. With an already stripped down schedule of just 5 races in an entire round robin, one can only imagine what will happen on windy days…

The Golden Gate Yacht Club has failed to deliver on practically every promise they made about the America’s Cup in San Francisco. Photo copyright Guillain Grenier / Oracle Team USA

From the very early stages of their defense, Oracle Racing made it adamantly clear that their number one priority would always be television. This was supposed to be the first America’s Cup ever fully tailored for television and which considered TV networks to be the only people they cared about. Larry Ellison and Russell Coutts wanted to turn the sport of sailing into an exciting product that could be sold to TV networks for juicy fees.

Three years later, close to US$ 150 million poured into TV production and a slew of technological advances and gadgetry, where do we stand in terms of TV coverage? By the looks of it, America’s Cup organizers have failed to attract the promised stampede of TV networks from around the world that would be knocking on their doors, willing to hand millions of dollars or euros in order to have the opportunity to broadcast the “Summer of Racing”.

So far, according to people with direct knowledge of the issue, the only TV network that has actually paid any fees to broadcast the America’s Cup or the Louis Vuitton Cup is TV New Zealand! Larry Ellison has struck a deal with NBC to broadcast live the first two days of the America’s Cup match, coast to coast on their main network, but had to pay for it. Instead of selling their product for a hefty fee, they are paying their clients to accept it. According to the same sources, ACEA is trying to sell the America’s Cup match rights in Italy for 1 million euros but so far they haven’t found any wiling buyer. On the contrary, we heard that SKY Sport Italia even asked for a deal similar to the one with NBC.

In fact, for a sports competition that proclaims to be made for TV, there isn’t a single piece of updated information on the official website in what regards the broadcast schedule, anywhere in the world, with the exception of NBC in the US. Don’t get me wrong, it is a fabulous opportunity for the sport of sailing to have a billionaire willing to buy air-time on a major US network to showcase the America’s Cup. For nearly three hours, millions of America’s Cup will be directly exposed to sailing, something that hardly ever happens. However, this again flies into the face of the myriad of promises in the last three years.

It will be interesting to see whether this will have any longer-term impact on how TV networks view the America’s Cup. Is the X-Gamefication of the America’s Cup beneficial in terms of TV interest? We will know in three months. However, we currently don’t know whether there will be ANY television coverage of the Louis Vuitton Cup.

Here again, reality is light years away from what organizers had promised. With the exception of Louis Vuitton and Puma, the America’s Cup has failed to attract any major big-name sponsor. In fact, in the official website Oracle now appears as the event’s global partner. With Larry Ellison footing the bill it’s logical his company would take that role.

According to people with direct knowledge of the deals, Louis Vuitton and Puma paid, respectively, 15 million euros and 5 million euros in cash. We don’t know the cash part of the deals with the remaining partners and suppliers but we would be overly surprised they totaled much more. These figures are, unfortunately, far below expenditures and if it weren’t for Larry Ellison and Oracle it would be impossible to pay the bills. It’s a vicious circle though. The very low number of participating teams, the lack of TV deals and the uncertainty make it nearly impossible to attract any major corporations.

According to the same sources, Michael Burke, CEO of Louis Vuitton, is furious with the current sorry state of the Cup that bears his company’s name. Their hospitality program already paled in comparison with previous editions but is now in tatters and the elimination of the onboard guest on the AC72’s takes away a powerful marketing tool. This was in any case the swan song of the Louis Vuitton Cup but the current debacle puts another nail in the coffin. It also appears Burke isn’t happy with the association with Red Bull either.

It’s an irony though, Bruno Troublé, six years ago was highly critical of the America’s Cup organizers for commercializing it too much! “It’s not visibility we seek,” claimed Trouble. “If we just wanted visibility, we would take out a billboard at a soccer match. You see, that’s the problem. They want to turn this into the soccer World Cup.” added the French sailor that created the Louis Vuitton Cup 30 years ago. It’s an ironic twist he had problems with the America’s Cup becoming the soccer World Cup but seems, at least publicly, to be happy with it becoming similar to NASCAR. He also seemed to be troubled with having a pizza company on the mainsail of an America’s Cup yacht but not with an energy drink!

While the RC44 class runs a successful VIP and guest program, this America’s Cup will not be able to do it

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