Cup returns to its second home, the courts

We look at the Golden Gate YC's concerns and get a challenger overview from the last head of the Challenger Commission

At a time when there should be jubilation that the America's Cup is remaining in Europe following Alinghi's successful defence of the 32rd event, now, as tumbleweed rolls around Port America's Cup, the event finds itself at one of the lowest points in its history since the court wranglings prior to the catamaran v big boat mismatch in 1988.

While the match racing off Valencia for the America's Cup itself was the most action-packed we've seen since Australia II's grand come-back to win in 1983, the parties involved now seem determined to make sure that the action is no less eventful in the Cup's second natural habitat, the New York Supreme Court, which holds jurisdiction over the America's Cup Deed of Gift.

The main gripe felt by the majority of challengers is that under the new Protocol for the 33rd America's Cup, the Spanish Challenger of Record have delegated far too much control to Alinghi. Thus while a later confirmation of the exact date and place have come to be expected from a defender unable to race on their own homewaters, the Protocol introduces out of the blue a new 90ft yacht the challengers have had no part in creating. And Alinghi, their club, the Societe Nautique de Geneve (SNG) and their operational arm, America's Cup Management (ACM) have assumed control over the entire event, including for example allowing the defender the previously unthinkable option of being able to compete in the Challenge selection series (previously the Louis Vuitton Cup).

To put this into context it was only just over four years ago in Auckland that the challenger series and the America's Cup were two separate entities with different organisations running the two events, with independent race management teams, different groups selling media and sponsorship rights, etc.

Through having a supposedly strong partnership between Ernesto Bertarelli and Larry Ellison, architects of the last America's Cup, one of the revolutionising elements of this event was allowing one body, America's Cup Management (ACM), to organise both challenger selection series and the America's Cup itself, but with 'mutual consent'. This involved both defender and BMW Oracle agreeing upon key issues and with Ellison's team presenting the case not only for themselves but also for all the challengers as a group via the Challenger Commission.

But for the 33rd America's Cup protocol, many, particularly those in the challenger community, feel that the pendulum has swung too far in the Swiss defender's favour. They maintain Alinghi has managed to manipulate a weak Challenger of Record into delegating all responsibility for the event over to them, allowing them to run the show on their own terms.

To counter this new Protocol, the Golden Gate Yacht Club, representing BMW Oracle Racing, have made claims that the Spanish challenge and the newly publish Protocol for the 33rd America's Cup are invalid under the Deed of Gift. On 11 July they delivered their own, in their view 'valid', challenge for the 33rd America's Cup directly to the Societe Nautique de Geneve. With no word from Alinghi or SNG since then - although a statement is to be issued by the Swiss club tomorrow - the GGYC have taken the next step of going before the New York Supreme Court to get the matter resolved.

The summons, dated 20 July at the New York Country Clerk's office, gives the SNG 30 days an 'answer to their complaint' (ie before Sunday, 19 August).

In the Introduction to their Verified Complaint, the GGYC claim

- the SNG are in breach of the Deed of Gift for the America's Cup and have turned it into a 'defender's cup' by eliminating all challenger rights and assuming "total control of the event"
- they have accepted a challenge that is 'invalid' under the Deed as the newly formed Club has never had an Annual Regatta (the Club Nautico Espanol de Vela argue that in the wording 'having as its annual regatta', the Deed of Gift doesn't specify whether they have to have held one in the past and does not invalidate them, provided they hold their annual regatta in the future - which they have since done). As the Complaint continues: "indeed, after its supposed challenge for the America's Cup it sponsored a sham annual regatta for children in a sailing training session."

- "by refusing to disclose the match Protocol" - ie where, when and how - "SNG has eliminated the opportunity for a fair and equitable competition. Only SNG can begin to plan its campaign and its yachts while all other competitors must sit and wait".

Further into their Complaint the Golden Gate YC argue that in the published Protocol governing the 33rd America's Cup the Spanish challenger of record have relinquished any control they might have had over the 33rd America's Cup:

26. "according to the Protocol "to help SNG organize, manage and fulfil all of SNG's obligations under the Deed of Gift" SNG may appoint ACM as the Event Authority. ACM is required to "act in a manner that is consistent with the provisions of...this Protocol," which provides that "SNG shall have the sole responsibility to organize and manage the Event". Accordingly ACM works under SNG's management.

27. ACM (and therefore SNG) enjoys near exclusive power over the next America's Cup contest. By way of illustration "ACM may, at its sole and entire discretion, accept or reject any entry received". In addition, ACM may fine Competitors. ACM also possessed the exclusive power to appoint the Race Committee, Measurement Committee, Umpires and "other necessary persons" under the Protocol, in sharp contrast to the 32nd America's Cup protocol in which all racing teams could effectively elect committee members...."

While so far there has been no response to this from niether Alinghi nor the SNG, some form of rebuttal is expected to this tomorrow.

To our British eyes, the GGYC challenge to the SNG looked more like a shot across the bows of Alinghi than a serious challenge, citing as it does the next America's Cup to be held NEXT year in boats 90ft long and up to 90ft wide (ie a multihull, possibly a trimaran - suddenly the resale value of the old Dennis Conner catamarans must be going through the roof...) and the Sea Weed Soup Perpetual Trophy as their annual regatta.



In fact Commodore Marcus Young (above) told us it is no joke. In the dim distant past a General Manager of the GGYC used to make soup for sodden and cold sailors returning from the race course and this became known as 'seaweed soup' and the perpetual trophy was named after this. "We left that in there for two reasons because it is a throw back to our old predecessor and also because it is one of the most popular regattas in San Francisco. We have about 150 boats that turn up for that annual regatta every year and it is an on-going thing. It has been around for a long time. We have several annual regattas that we host at our Yacht Club every year. None of them have the cache as that one."

Young confirms that their case against the Societe Nautique de Geneve is primarily over their view that Alinghi has assumed complete control of the 33rd America's Cup.."which is not in the best interests of the other challenging yacht clubs and is not in the interest of the clubs itself. What we are trying to do is to keep it to a more traditional reading of the Deed of Gift. The interest in that is really for the competition, to keep it close and interesting and fun and challenging, but to not give anyone an unfair advantage. I think in the last campaign you saw some of the closest racing competition in the Cup’s history and at the end of the day that is what the sport is really all about and that is what we want to see going forward."

While the GGYC's action against the SNG (in effect BMW Oracle Racing v Alinghi) and relative silence from the rest of the challengers may indicate that it is only Larry Ellison's team that has issues with the new Protocol, but in fact this is far from the case.



Lawyer Alessandra Pandarese (above) has a long history with the America's Cup dating back to Il Moro de Venezia in 1992 and has since worked for Luna Rossa. For this last Cup she was Mascalzone Latino Capitalia Team's General Council and was also the last head of the Challenger Commission for the 32nd America's Cup.

According to Pandarese while BMW Oracle Racing and the GGYC have issued their challenge and this is now heading towards court in New York, their action is in fact only spearheading concerns from a group of challengers including, to a greater or lesser extent, Mascalzone Latino-Capitalia Team, Luna Rossa, Emirates Team New Zealand, United Internet Team Germany and Areva Challenge.

What is apparent from this is that not all the challengers are aligned - in particular Team Shosholoza, which issued their own challenge to the Societe Nautique de Geneve last week, seemingly happy with the current Protocol and today TeamOrigin. This lack of solidarity is potentially the downfall for any challenger group but is perhaps an inevitable feature of it: invariably the power behind Cup teams comes from strong, opinionated individuals such as Larry Ellison, Luna Rossa's Patrizio Bertelli, Mascalzone's Vincenzo Onorato, Areva Challenge's Stephane Kandler or Team Shosholoza's Captain Salvatore Sarno etc and for them all to agree is rare. This point is not lost on Alinghi/ACM and is one reason perhaps why they have seen fit to take on a role that some are dubbing 'the benign dictator' - see Brad Butterworth's comments below.

While at present there is no formal Challenger Commission, the bones of it remain in place from the last Cup, there was a meeting shortly after the Protocol was announced and emails fire back and forth daily, says Pandarese. "If we have stay together it can be very strong. We all share [a belief] that this Protocol is not balanced in the interests of the challengers for sure. It is a step backwards from the past and maybe we’ll be back in the really old history of the America’s Cup. I think the next step is to stay together and support the actions of Oracle."

Two aspects of the Protocol that look set to be resolved in the next 48 hours are the 'when' and 'where' - agreement between Valencia, the town and region and the national Spanish government are in the process of being concluded with the 33rd America's Cup venue to be the same as for the 32nd. Obviously Port America's Cup is set to change with the advent of a Formula 1 Grand Prix being staged there annually starting next year, with, it is believed, the track running around the Port on the seaward side of the bases. Another issue in the negotiations, we understand, have been over the proposed expansion of Valencia's commercial port.

So it looks like the 33rd America's Cup will be staged once again out of the existing Port America's Cup, a decision welcomed generally. The infrastructure in place there is superb, on a grander scale than ever before witnessed, tailor-made to the event and it would be a great shame to see such an asset not used.

But when? Alinghi and Michel Bonnefous, CEO of ACM, have previously stated that they would like the competition to be held as soon as possible if Valencia was chosen and 2009 has been widely mooted. One sticking point in terms of timing must be the new boat (or perhaps the other way around - one sticking point with the new boat is the timing). Assuming the rule for the new Cup boat is announced sometime this autumn that will give challengers less than 18 months to design, carry out the necessary R&D and build their new 90 footer. If the present generation of boats are to be used for the Acts and the 90 footers only brought on line for the challenger selection series and the America's Cup itself, it seems most likely that the most competitive America's Cup on record (the 32nd) will be followed by the least competitive and one strongly favouring the big teams who have more financial resource to throw at the problem.

But when it comes to the boat the biggest winner will certainly be Alinghi who under the present terms of the new Protocol are under no obligation to reveal details of the rule for the new boat until the end of the year. The fact that only Alinghi designers are working on the rule, as Brad Butterworth himself confirmed during the Protocol press conference, indicates all the criticisms levelled against the Swiss defenders for skewing the playing field in their favour, seem well-founded.

What the challengers are gunning for is the present generation of boats being used for the 33rd America's Cup, while some agreement is reached between all the parties - including a variety of designers - about developing a new boat for the following event - what Emirates Team New Zealand were proposing for their protocol had they won and how the present generation of Cup boats was introduced prior to the 1992 Cup. As Pandarese says, keeping the new fleet for this next round would allow teams to get more value out of existing boats and would encourage new teams to enter the America's Cup and for existing ones to continue.

This leaves the question of how some ownership of the next event can be devolved back to the Challengers. Pandarese is astonished by how little power they have as a group this time as under the existing Protocol, a Competitor's Commission is to be established but its members will have 'no voting powers'. "I don’t think a sports event should work in this way honestly," she says. "I am not surprised the battle is going on. For the sake of good sense and the love we have for this sport we really need to do something, although I know it has been quite hard and there has always been a battle. But I think some principles should prevail sometimes."

So how should the challengers be represented? Aside from heading the Challenger Commission, Pandarese was also General Secetary of CORM in Auckland and has some experience in the alternatives. So an arrangement as it was this time around? "No, the relationship we had during the last Cup wasn’t great either," she says.

In that case, now there appears to be some distrust between some challengers and the defender, do they want to return to the old system whereby the challenger selection series was entirely autonomous? "I don’t think so," counters Pandarese. "On the commercial side the step to have one event is important for the value of it and I think this should remain, but - we have discussed this many times in our challenger meetings - the challengers might take some responsibility for the organisation and must be there to be part of the decision process for the commercial exploitation of the challenger selection series and have control on the sports side for sure. It is not necessary to split the two organisations but be part of it, with the splitting of the responsibilities."

So what structure would she like to see in place? "Within ACM I think there must be representation in the Board by the challengers and possibly some appointment of executives who must be accountable to both sides particularly in connection with the Challenger series. That is something which needs to be considered. Second of all, the challengers should be part of the decision process and not excluded."

Obviously the structure which would work best for the sport would be if there was a body such as ACM in charge that was entirely autonomous from the challengers and defenders. But in the present climate pigs are more likely to fly. It comes as not too surprising that Brad Butterworth says this is unlikely to happen (all the while he has a say in the matter...) "No, because if they do that, then it will become a world championship. It would be nice if all the teams got together and did a think tank like they did with Formula 1 where they have ownership of it and whoever is the defender maybe ends up picking the venues. That would be nice. The problem is that all the teams fight among themselves too much. This [last] edition has been probably the worst in the challengers never getting together as a group. They were arguing among themselves all the time."

For similar reasons Butterworth also thinks the time will never come when there is no 'challenger' and 'defender' even though the line between these has become decidedly murky this time around. "I think the Cup has all this history and I think you should keep the history. That is the unique thing about it. If it just becomes a free for all it is a world championship and I don’t think that will work."

What will come to pass if Alinghi win the court case and stick to their guns doesn't bode thinking about. It seems likely that some marginal challengers who might have played won't and the event could be smaller as a result.

As a spokesperson from BMW Oracle Racing told us: "They come and negotiate or it ends up in court. Certainly no one wants to take that route if you can avoid it."

There is a lot of political action going on in Valencia over the next 48 hours, so, please God, let there be some resolution too otherwise the next America's Cup match will be taking place in New York.