Archive | America’s Cup

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The myth of the “commercially sustainable” America’s Cup

Posted on 22 July 2014 by Valencia Sailing

According to Forbes Magazine’s list of the 50 richest Australians, Bob Oatley is sitting in 33rd place with an estimated fortune of US$830 million, as of January 2014, which at the current exchange rate is approximately €615 million.

No matter what currency you express it in, for the average person, that is a boatload of money and thousands of times what most of us would ever earn in our entire lifetime. Nevertheless, there is a tremendous difference between being very rich and being able to finance an America’s Cup campaign, and this is something that, apparently, Bob Oatley and his son Sandy, misjudged when they filed their challenge for the 35th America’s Cup last September.

It’s difficult to conceive how such an accomplished businessman wouldn’t see nearly a year ago that with an estimated cost of more than €100 million to run a competitive campaign and have a serious chance at beating Larry Ellison, it is financially a no-brainer. One cannot spend a sixth of one’s fortune on a yacht race, regardless of its appeal and the resulting status achieved, as well as the bragging rights. In fact, there were a number of knowledgeable people that, off the record, would also express their bewilderment during the 2013 Sydney Hobart race.

There will not be any Team Australia taking part in the 35th America’s Cup. Photo copyright Andrea Francollini

Most probably, the Oatleys thought they would be able to gather around them more wealthy Australian businessmen and corporate groups that would fund a national drive to take back the America’s Cup to Sydney. The final match in San Francisco might have been one of the most exciting and thrilling races but the entire event was a commercial disaster. None of the sponsorship and funding goals were achieved and a mere three challengers competed. We have commented on this many times and we will not go over that issue again. Still, it is interesting to remind ourselves of the budgets the four teams had last time, according to Bruno Troublé: Oracle Team USA spent €250 million to successfully defend the America’s Cup. Artemis Racing had a budget of €160 million, Luna Rossa had at its disposal €100 million while Emirates Team New Zealand reached the finals with €80 million.

As a result, the Oatleys started their negotiations with Russell Coutts and Larry Ellison at the €100-million barrier and unless they were able to negotiate a protocol that would substantially reduce costs compared to the 34th America’s Cup they had embarked on a mission impossible. After, allegedly, tough negotiations that went on for months, the result was quite surprising, to say the least. Not only did the Australian challenger agree to hand the Defender unprecedented rights, they put on additional burdens on the challengers that made the, already scant, commercial appeal even smaller.

Just the fact the challengers will have to compete in two different parts of the planet makes the logistics and finances prohibitive. In addition, marketing departments will have to make their pitch in the corporate boardrooms without even guaranteeing that their team will make it to the top four! Let alone the fact that before the end of 2014 they will not know the venue of the next event and the venue of the Challenger Selection round robin will not be announced before February 2015!

It seems that reality settled in on Saturday when Team Australia announced their withdrawal from the America’s Cup, stating, among others that “ultimately our estimate of the costs of competing were well beyond our initial expectation and our ability to make the formula of our investment and other commercial support add up.”

As of today, there are four potential and credible challengers that are, or could be, able to provide the initial US$3 million required for the entry. They are Luna Rossa, Artemis, Ben Ainslie Racing and Emirates Team New Zealand. There is talk of the possibility of a French or Chinese entry but we doubt they will be able to get the necessary funding.

The case of Ben Ainslie is an example of the impossibility of getting off the ground without the strong support of either a government or a group of wealthy financial backers. The world’s most successful and most accomplished sailor, a living sports legend in his own country couldn’t have started his campaign without £7.5 million of government funding and the contribution of seven founding shareholders. We aren’t saying that this is negative, it’s simply a fact.

We were criticized in the past for pointing out this but when the team that wrote the rules of a competition bows out because they consider it to be extremely expensive what should the rest think? It appears Russell Coutts is doing an excellent job though. Despite the PR to the contrary, the only task he has is to retain the America’s Cup, nothing more. So, with one of the five potential challengers out, achieving that goal became a bit easier.

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Australian Challenger of Record withdraws from America’s Cup

Posted on 19 July 2014 by Valencia Sailing

[Source: America's Cup] The America’s Cup organizers have received notification from the principals of Hamilton Island Yacht Club of their intention to withdraw Team Australia from the 35th America’s Cup.

“We are very disappointed to be receiving this news,” said Russell Coutts, Director of the America’s Cup Event Authority (ACEA). “We were excited to have Australia as a challenger and we were also looking forward to the prospect of holding America’s Cup World Series events in Australia.

“But our focus going forward is with the teams that have already submitted challenges and the teams that have told us of their intent to do so before the entry deadline on August 8th.”

In the meantime, ACEA is continuing its work to select a host venue for the America’s Cup in 2017. The selection process is progressing well with an aim to announce the final venue in October.

Ben Ainslie Racing (BAR), which revealed its America’s Cup team in a gala ceremony in London last month, had this comment:

We remain supportive of the Defender’s continued drive towards a more commercial event format, along with a more sustainable future for this historic trophy. BAR will be bidding to host two America’s Cup World Series events in 2015/16 at our new home in Portsmouth; as a key part of the road to the 35th America’s Cup. While the withdrawal of the Challenger of Record is regrettable, it is also not unusual and we will continue our own preparations for the 35th America’s Cup and look forward to an exciting future.

No more Team Australia!!!!

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Bermuda and San Diego shortlisted as America’s Cup venues

Posted on 08 July 2014 by Valencia Sailing

[Source: America's Cup] The island of Bermuda and the city of San Diego have been shortlisted as potential host cities for the 35th America’s Cup.

Chicago, which had also been under consideration, is now a likely venue for America’s Cup World Series racing in 2015 and 2016.

“Both Bermuda and San Diego have made very compelling cases to be the host for the next America’s Cup,” said Russell Coutts, Director of the America’s Cup Event Authority (ACEA). “We will be in good hands with either venue.”

Bermuda is 640 miles (1,030 km) east-southeast of North Carolina. It is known to sailors for the Newport to Bermuda race, as well as the Bermuda Gold Cup match-racing event, both of which have a long history of success on the island and a sterling reputation among sailors. America’s Cup racing in Bermuda would take place close to shore, within the Great Sound.

San Diego is one of only seven cities to have hosted the America’s Cup. When the Cup was previously held there in 1988, 1992 and 1995, the race course was far offshore, on the ocean waters beyond Point Loma. But if San Diego were selected as the venue this time, racing would take place in San Diego Bay, offering incredible viewing opportunities for spectators along the city’s waterfront.

To advance the venue selection process over the coming months, the America’s Cup Event Authority will work closely with both venues to finalize logistics requirements and commercial opportunities, as well as to establish the needed relationships with private and public entities to ensure a successful event.

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It is through this process that the final host city for the next America’s Cup will emerge.

“We are now able to focus on two venues that are motivated and enthusiastic at the prospect of hosting the next America’s Cup,” Coutts concluded. “I’m confident that we’re on target to finish with a venue that allows us to achieve our goal of hosting an exciting and successful America’s Cup built on a strong commercial foundation.”

The host city for the next America’s Cup will be announced by ACEA before the end of this year.

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Carlo Borlenghi’s photo gallery of the foiling Luna Rossa AC45

Posted on 06 July 2014 by Valencia Sailing

Team Luna Rossa continues its training on board the AC45 Luna Rossa Piranha following the modifications of the appendages (daggerboards and rudders). The world’s best sailing photographer, Carlo Borlenghi, was there!

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

Luna Ross’a foiling AC45 sails in Cagliari. Photo copyright Carlo Borlenghi / Luna Rossa

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Photo gallery: First sail of Luna Rossa’s fully-foiling AC45 Pirahna

Posted on 01 July 2014 by Valencia Sailing

Luna Rossa Piranha – one of the two AC45s with which the team will train and develop its design in view of the 35th America’s Cup – sailed today for the first time in Cagliari.

The “new” Luna Rossa Piranha has undergone some major changes foreseen by the Protocol of the 35th America’s Cup that now allows the modification of any component of the AC45 catamarans – used in past editions of the America’s Cup World Series – except for the shape of the hulls.

First sail of Luna Rossa’s AC45 Piranha following substantial modifications. Cagliari, 1 Jul 2014. Photo copyright Luna Rossa

First sail of Luna Rossa’s AC45 Piranha following substantial modifications. Cagliari, 1 Jul 2014. Photo copyright Luna Rossa

First sail of Luna Rossa’s AC45 Piranha following substantial modifications. Cagliari, 1 Jul 2014. Photo copyright Luna Rossa

First sail of Luna Rossa’s AC45 Piranha following substantial modifications. Cagliari, 1 Jul 2014. Photo copyright Luna Rossa

First sail of Luna Rossa’s AC45 Piranha following substantial modifications. Cagliari, 1 Jul 2014. Photo copyright Luna Rossa

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Luna Rossa’s AC45 Piranha to sail again after major modifications

Posted on 01 July 2014 by Valencia Sailing

Luna Rossa Piranha – one of the two AC45s with which the team will train and develop its design in view of the 35th America’s Cup – starts sailing today in Cagliari.

The “new” Luna Rossa Piranha has undergone some major changes foreseen by the Protocol of the 35th America’s Cup that now allows the modification of any component of the AC45 catamarans – used in past editions of the America’s Cup World Series – except for the shape of the hulls.

In this first phase the research and the modifications focused essentially on the optimization of the appendages – daggerboards and rudders – and on-board systems that allow the AC45 catamarans to fully foil and sail with greatly increased performances.

Luna Rossa Piranha and Luna Rossa Swordfish have thus become real laboratories to test components, develop systems, collect and analyze data, as well as to train the crew in manoeuvers, boat handling and foiling tactics and techniques.

The aim is also to create and develop a close collaboration between the designers and the sailing team through a constant exchange of information, in order to address the design and optimize its applications.

During this phase onboard communications will also be improved; the rotation of roles within the crew will also be important to identify the most suitable sailors for each role, thus allowing all possible configurations on board.

Max Sirena, skipper of Luna Rossa, said: “We have invested a lot of energy in the development of the AC45 boats and I wanted to personally follow the conclusion of this first phase as it is a very important step in our preparation. I am very happy with the results and I want to thank the whole team for having worked with great professionalism and dedication within the deadlines we had set. The aim of Luna Rossa is to win the America’s Cup and, to achieve this result, we need to give our best from the first to the last day of our campaign.”

Luna Rossa Piranha will start sailing from the early afternoon of today.

The heavily-modified Luna Rossa Piranha is ready for her first sail. Cagliari, 1July 2014. Photo copyright Luna Rossa

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Emirates Team New Zealand board confident the team can challenge for the America’s Cup

Posted on 25 June 2014 by Valencia Sailing

Emirates Team New Zealand Emirates Team New Zealand chairman Dr Keith Turner says the team has now reached the point where it has the confidence to mount a challenge for the 35th America’s Cup.

The team has secured sufficient private and sponsorship funding to proceed to the next stage without needing Government funding during this period.

“Now, with the assistance of long-time supporters Sir Stephen Tindall, Matteo de Nora and other private Donors and Sponsors, we are delighted to be able to say that we are funded through to late this year.”

Emirates Team New Zealand feels “confident” it can challenge for the 35th America’s Cup. Photo copyright Pierre Orphanidis / www.vsail.info

CEO Grant Dalton said: “The team has been working towards this moment almost since the day of the last race in San Francisco.

“The funding support for the team that has coalesced over the past week means we can continue the design and engineering development, and keep racing, until main sponsorship funds begin to flow.

“To avoid falling behind the opposition, our design and engineering team has been working on the software tools they will need for the challenge.”

This week sailing team members are competing in two regattas: Dean Barker, Glenn Ashby and Chris Nicholson are at the European A Class championships in France and Olympic 49er sailors Peter Burling and Blair Tuke with Jeremy Lomas, Ray Davies and Edwin DeLaat are in Russia for the Extreme Sailing Series which starts on Thursday.

“The Protocol and the design rule has been published so we know what we are working with and we are confident we can mount a challenge that has the potential to win.

“Amendments to the Protocol have removed some of the more contentious issues. If this Protocol follows the pattern of previous Cup cycles, more amendments will follow. The so called 2 boat rule for the defender is not the problem suggested by recent media reports.”

“We now await the announcement of venue for the challengers’ preliminary series and then the venue for the challengers’ semi-finals, finals and the America’s Cup match, so that we can put the finishing touches to the team’s business plan and present it to our backers for approval.”

Entries for the 35th America’s Cup close on August 8.

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America’s Cup Protocol: What Oracle was criticizing and what it is implementing

Posted on 18 June 2014 by Valencia Sailing

Is it an irony that some of the most controversial aspects of the failed Protocol Alinghi and Ernesto Bertarelli tried to implement with the help of their sinister bedfellows of the Spanish Sailing Federation are now part of the America’s Cup Protocol? Is it a coincidence that Larry Ellison and Russell Coutts that so vehemently criticized Alinghi are taking a leaf or so out of their book?

We don’t think so because this is, after all, the America’s Cup. The Defender has one and only goal, to retain sailing’s most coveted trophy and will use all means within its power to do so. That also includes using the same tricks others tried to use to stack the cards in their favor, despite having criticized them so strongly for doing so. As long as there is a Challenger of Record that signs off the rules and a number of willing billionaires to play the game, the rest is superfluous.

Now that the 35th America’s Cup Protocol is a few weeks old, we thought it would be interesting to take a trip down memory lane and reproduce some of the statements that were made during the acrimonious litigation between Alinghi and Oracle that lasted nearly 950 days! This is by no means a justification of the shenanigans Alinghi and the Spanish Sailing Federation used through a sham yacht club to create a Protocol that had some irrefutably unacceptable clauses that gave unprecedented powers to America’s Cup Management (ACM), the organizers hired by Alinghi. ACM could at its sole discretion and for any reason they deemed fit, disqualify any of the competing teams. Let alone the fact that Pombo and Chirivella, respectively President and Vice-President, tried to masquerade a weekend Optimist training camp as the CNEV’s “annual regatta” or later staged a farcical Sailing Tour of Spain, in their second attempt to satisfy the requirements set by the Deed of Gift.

However, it does put things into perspective and shows that the America’s Cup is more than a simple sailing race. Excellent PR skills are as important as good design and sailing skills. It probably shows that Ellison didn’t really fight for the “rights” of the Challengers. Why on earth would anyone fight for their right of his competitors? Ellison and his team fought to win the 33rd America’s Cup and win they did.

The photos from the 33rd and 34th America’s Cups are courtesy of Juerg Kaufmann and Daniel Forster, through their Go4image website. Click here to access what is probably the richest online America’s Cup photo gallery, dating back to 1977!

The Defender racing in the Challenger Selection Series

The most radical change in this edition of the world’s oldest sports trophy is, undoubtedly, the participation of the Defender in the Challenger Selection Series. It is something Ernesto Bertarelli tried to introduce in the doomed Protocol of the 33rd America’s Cup and met with fierce criticism and resistance from both BMW Oracle and Mascalzone Latino, then its staunchest ally and future Challenger of Record.

Not only is it a departure from tradition, it also gives the Defender an undeniable advantage as they are able to gauge the challengers and race against the yachts that will, eventually, be raced in the actual America’s Cup Match. Whether it’s fair or not, isn’t something we will judge here, however it was a point that, repeatedly, Oracle pointed out as unfair.

The Challenger Selection Series will not even exist as such in 2017, at least up to the semifinals, but instead a certainly American-inspired terminology is being used. In 2015 and 2016, all teams will take part in the America’s Cup World Series, similarly to the previous edition. Racing will be held, again, in AC45′s but the overall score will do count towards the later stages as the top finishers carry points into the 2017 races. The idea is again for this circuit to travel around the world.

A new concept is introduced this time, the America’s Cup “Qualifiers” which in reality are nothing more than the usual Louis Vuitton Cup Round Robin, with the obvious exception that Oracle Team USA will take part. No quarter finals are scheduled in 2017 and the top four challengers will then race in the America’s Cup “Playoffs” which until a few weeks ago were commonly known as the Louis Vuitton Cup semifinals and finals. All racing in 2017 will take place with the brand new AC62′s, so not only will the Defender take part up to the Challenger Selection semifinals they will be able to race against the one and only AC62 the challengers will have!

The trimaran that gave Larry Ellison the America’s Cup. Valencia, 10 February 2010. Photo copyright Kaufmann & Forster / go4image.com

Here are just a few of the numerous statements Larry Ellison and the Oracle team published in 2007 and 2008, criticizing that same concept:

Larry Ellison in a letter to Ernesto Bertarelli, dated 17 November 2008, wrote: “You will say that, with only one boat per team, the Defender must be able to sail in the Challenger Selection Series. Fundamentally, we do not agree with this as there is a risk that the impact and suspense of the America’s Cup Match will be diluted. To have the Defender race in the Challenger Selection Series is a radical departure from the Cup’s long history and tradition and we need to be careful about making such changes.”

BMW Oracle press release, 16 September 2008: “Under Alinghi’s AC 33 protocol, the format and the schedule of all challenger racing is dictated by the defender for the first time in the history of the event. For the challengers in AC 33 it is therefore not “their” series any more as it was in all previous America’s Cups… However under the new protocol the defender’s ability to sail in the challengers’ series gives it very considerable new advantages. As they are already guaranteed a place in the America’s Cup, the defender can eliminate a team or influence the outcome of the series at no risk to themselves.

Before that, in October 2007, we had interviewed Alessandra Pandarese, legal counselor of Mascalzone Latino, and touched the issue of the alternative Protocol her team and BMW Oracle had prepared. Here’s our question and her answer:
Valencia Sailing: I also suppose that in your protocol the defender doesn’t have the right to take part in the Challenger Selection Series (CSS).
Alessandra Pandarese: That’s correct. Alinghi’s participation in the CSS is something we don’t accept.

It is true though that in the initial Protocol published by Alinghi, the Defender was to race up to the Challenger Selection finals, however we can’t understand why the “suspense” of the America’s Cup was in danger in 2007 and it won’t be from 2015 to 2017…

Who will take the America’s Cup from Larry Ellison? San Francisco, 25 September 2013. Photo copyright Daniel Forster / go4image.com

Date and Venue of the 35th America’s Cup

When Alinghi first issued their 33rd America’s Cup Protocol the date and venue, in addition to the boat rule, were not known. It was speculated that Valencia would again be the venue, probably in 2009, but that wasn’t reflected in the Protocol.

When the Golden Gate Yacht Club presented their surprise challenge, on July 11th, 2007, they stated that, “Furthermore, the race Protocol for the 33rd America’s Cup agreed to by the challenging yacht club CNEV and the defending SNG are invalid because they fail to specify the rules for the next competition by omitting a specific regatta date, location and class of boat. Without the basic elements of regatta venue, date and boat design rules as required by the Deed of Gift, the Alinghi Protocol provides no opportunity for a fair and equitable competition…”

Once again, the venue and date of the next America’s Cup still haven’t been decided but that doesn’t seem to be a problem. Not only that, for the first time ever, the “Qualifiers” (the CSS round robin) and the “Playoffs” (the CSS semis and finals) could, eventually, be held in different locations and just the top four challengers will got to the Playoffs.

The venue and dates of the Playoffs and the America’s Cup Match will be made public by the end of 2014 while for the Qualifiers, the Defender will have another month and a half, until February 15th, 2015, before it announces the date and venue.

Here’s another quote from the letter Larry Ellison had sent Ernesto Bertarelli on 17 November 2008: “As to the date of the next conventional Cup, this also should be agreed among all the teams, Challengers and Defender, by mutual consent. We would propose 2010 to get things back on track even sooner than the 2011 date we have seen floated in recent media reports by your side – unless 2010 is too soon now to allow teams, especially new or smaller teams, to get up to speed. Regardless, this can be decided by getting the teams together around one table as soon as possible.”

As per the 35th America’s Cup Protocol the venues and dates are at the sole discretion of the newly-created “Commercial Commissioner”, who is appointed and, eventually, replaced at the discretion of ACEA, which in turn is appointed solely by Golden Gate Yacht Club.

In a statement on November 13th, 2008, Tom Ehman, spokesperson of Golden Gate Yacht Club had stated that “for the first time ever, the Challenger Selection Series is under the complete control of the defender.” Doesn’t the same hold true this time? For the first time since the existence of multiple challengers, just the top four challengers will actually get to race in the America’s Cup venue! Isn’t that lopsided?

Why did Larry Ellison want to grant challengers such extensive rights in 2008 and denies them in 2014? Because he’s now running the America’s Cup, not challenging for it, and that’s what sets the America’s Cup apart from other events.

The venue and dates of the 2017 America’s Cup are foggy. San Francisco, 25 September 2013. Photo copyright Daniel Forster / go4image.com

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