Bertarelli fights back

Cup wrangling overshadows Valencia host announcement and the return of Team New Zealand

Another strange America's Cup press conference took place today in Valencia, this time hosted by ACM and featuring Ernesto Bertarelli and ACM CEO Michel Bonnefous and a roster of national, regional and local politicians and a rather mute representative from the Challenger of Record. Because it involved politicians the press conference started an hour an a half late after an impromptu gathering and some inevitable fireworks on Port America's Cup with the announcement that the 33rd America's Cup will indeed be held in Valencia. The press conference itself was then prematurely and rudely stopped by regional President of the Valenciano Generalidad Francesco Camps (who's late arrival caused proceedings to start an hour late in the first place) answering a question, then standing up and leaving, effectively drawing proceedings to a close without a further word.

Highlight of the press conference was Ernesto Bertarelli's speech, a full transcript of which is here (analysis below):

"It has been a fantastic ride since 2003. It has been exciting, it has been fun and it has been hard at times, but mainly on the water and that’s where it should be hard, that’s where the fun is, that’s where the battle is. It is with a lot of excitement, but with a deep sense of trust and friendship, that I would like to thank for inviting us to Spain again in the name of SNG, ACM and Alinghi.

"Valencia has been a great venue and I think it is important for us to clarify the intent of the Protocol today. We have the intention of using Valencia because it has proven to be a fantastic sailing venue. Indeed under the authority of ACM we are going to reconduct [reuse?] the south and north courses which has allowed us to have fantastic racing. We also know that we have a limited number of bases in the Darsena. One of the reasons we decided to reconduct Valencia is because there is a great advantage in being able to reuse the existing infrastructure and therefore reducing the cost of the event for everyone. We have a number of bases, and so ACM is welcoming any competitor who is determined to challenge Alinghi in the next match. We encourage the teams and we are delighted that we have in the Desafio Espanol a solid, reputable and strong Challenger of Record. And all my respect to the performance of Desafio on the water. I think that Desafio gave an honoured battle and a hard time to Team New Zealand and thanks to them I believe Team New Zealand was a very very tough competitor against Alinghi. And in taking the decision to be Challenger of Record, they have taken the responsibility to represent the history of the America’s Cup and they have taken the responsibility to be our partner and I want to thank them for it.

"As regards the Protocol our intent is to organise two pre-regattas next year, one in the spring of 2008 will be in Valencia and the other, in the autumn of 2008, will be decided under the authority of ACM, but I understand from ACM we will be staying in Europe. The challenge selection series will begin in 2009.

"A new class will be announced by the end of October 2007 and we will, under the guidance and facilitation of ACM, enter in consultation with the existing challengers on how to best propose a new class that is starting in September. So we just finished the 32nd America’s Cup and believe me it was hard - in all senses of the term not only on the water but also on shore in making sure that we had the fastest boat and we are committed to working as quickly as possible in consultation with the existing challengers to announce a more exciting and more vibrant vessel for the next America’s Cup, by the end of this October of this year already.

"One of our intents is also to reduce the cost for the teams and therefore even though we will allow two canoes [boats] to be build, we will only allow one boat to be sailed at any one time. That boat can be sailed in any water, but that boat, the new boat that the teams will build, will not have the possibility to line up with any other vessel except for within ACM regattas and the reason for this is because – and I can speak from experience - the biggest cost for any team is two boat testing - 10 minutes one way, 10 minutes the other way and I think like other sports, that my friends in Valencia know well, the fun is in racing. Like in Formula 1 our intent is to reduce the amount of time we spend wasting money going around the track without a competitive aim.

"Because this rule will apply to Alinghi as well, Alinghi will have to participant in the challenger selection series otherwise you must understand that having permission to only use one boat on the water, if we cannot race other vessels, we cannot have the opportunity to test our boat against other teams. We will obviously withdraw from the final of the challenger series and wait for the challenger in the match. We also commit that if we are eliminated in the challenger series will lose that right and we will not have the opportunity to race anyone thereafter. We have already nominated an independent arbitration panel and we will nominate an independent jury.

"Another great news today: besides the great Desafio Espanol, that has challenged first for the next America’s Cup, we already have another three teams joining the competition today. We have Team Shosholoza, which has demonstrated to bring a great diversity to this event and a lot of joy. We have TeamOrigin from England, which is coming back to represent the English tradition of this event. And finally today ACM received notification of entry from Team New Zealand and I want to welcome Team New Zealand back to this event. They have demonstrated to be one of the greatest teams the America’s Cup has ever seen and Alinghi is looking forward to racing them again. Well done and welcome Team New Zealand.

"Unfortunately I have to say a few words about the Oracle Racing dispute - it seems like having failed to win on the water twice and bearly finishing fifth in the last competition Oracle Racing has decide to bring the dispute in court, hoping to win what they weren’t able to do on the water in a court of law. This is a great disappointment to Team Alinghi and a great disappoint to the Societe Nautique de Geneve. Oracle Racing team has posted a challenge, has brought forward a challenge to the Societe Nautique de Geneve whereby their intent, if they win in New York in court, is to race exclusively, with no other competitors other than Alinghi in a 90ft multihull. This is obviously unacceptable. We have submitted this dispute, which is damageable to the entire sport, damageable to the America’s Cup to our independent arbitration panel and we hope to have their resolution soon.

"It seems that Larry Ellison’s strategy continues to be one of trying to make the game as expensive as possible. I’m sure that some of you in the press understand and realise that. He has launched a costly and aggressive PR campaign against Alinghi and against Desafio Espanol with a great deal of resources. He has launched a costly law suit in New York. For those like myself who have been unfortunate in the past to have been involved in lawsuits in America I can tell you they are very expensive. No matter who wins, one thing is for sure - everyone loses money. He has launched an expensive multihull program for 2008. When he is complaining that we are not giving enough time to competitors in announcing a class rule by October, he pretends to give SNG until July 2008 and race in a 90ft multihull which we have no interest in. Not only, but I think the most damaging thing is that he has created insecurity and he is preventing competitors, including Alinghi, in securing sponsorship. He clearly is damaging the America’s Cup brand.

"Having said that I think today is a fantastic day and surrounded with friends and partners for a long time, I am really pleased and looking forward to an even better 33rd America’s Cup. As I said only a few weeks ago, I can still taste the salt in my mouth coming out of the last race of the America’s Cup and I can mention it to my friends here, it is harder to win again and it is going to be harder for Valencia, ACM and for all of us to do better than what we have done in the 32nd America’s Cup, but with your help – and I know I have your help and commitment - we will do our best, for the 33rd America’s Cup to be the best ever again. Thank you very much."

This speech requires some analysis.

First for what it's worth there is an inaccuracy in this. Yesterday Ellison said that if he won the case he would be only too happy to invite other challengers to race in multihulls in 2008 - only he too said he hoped the case never reached court. Nor are we aware, outside of delivering the GGYC challenge to the SNG and mounting the court case and issuing a couple of press releases has Ellison launched a costly and aggressive PR campaign - most of the media, along with notables such as Paul Cayard (a man with little love for BMW Oracle), figured it out for themselves that the Protocol, as written, was skewed heavily in Alinghi's favour (as we have written about in the past) well before Ellison championed the cause.

Alinghi incentivising teams

From Bertarelli's speech it appears Alinghi are now incentivising teams to sign up early on. Teams challenging at this stage significantly adds weight to Alinghi's position and undermining BMW Oracle Racing's supposed position as champion of the challengers. For example it is extremely good for their case that Team New Zealand have also signed up, despite we suspect the Kiwi team not having funding in place.

For example those signing up early will get the pick of the bases and we understand from Alinghi's General Council, Hamish Ross, that a returning team will get the first rights to their old base. And bases around Port America's Cup are only finite in number (12 teams including Alinghi) so those who wait might not get to race, comes the warning. Given the unfair Protocol, the challengers aligned with BMW Oracle will argue, having too much challengers shouldn't be a problem.

Another incentive is that teams signing up early - while those which don't, categorically won't - will now also get a chance to have a say in the design of the new boat.

The 90 footer

It is certainly a step in the right direction Alinghi has taken in allowing challenger input into the new 90 footer and from the PR standpoint immediately quashes the notion that they already have the rule not only written, but their boat tested, designed and sailing in some secret pocket on Lake Geneva as they seemed capable of under the Protocol. But equally under the Protocol Alinghi are under no obligation to act on any of the input they receive from challengers.

Brad Butterworth also confirms that as with most details to do with the 33rd America's Cup nothing has been confirmed yet as it all was put together so quickly. "In the weeks before we won we really hadn’t thought about the future a lot. There was a lot of pressure to have a new rule, a new boat, bigger more spectacular, so we took that on board, but the rules and regulations of it we hadn’t really thought it through. The format of the regatta hasn’t been thought through. There has been no thought towards the rule - there’s been nothing on pen and paper. We had to have an open relationship with our partner, which was the Spanish, to do something like that. Last time we had 10 months to think it through and this time we only had two days. It’s just ridiculous."

Obviously an issue with introducing a new boat is the short time frame before the next Cup. Ideally 2010 would have been better but as Hamish Ross pointed out, 2010 is not possible because of the clash with the World Cup in South Africa and 2011 is too far away. However in light of the weather problems experienced this year the challenger selection series and the Cup itself have been shoved on by two months, now running from May through until July 2009, exact dates awaiting confirmation.

The question is who wanted the new boat? Alinghi are happy with it obviously and Larry Ellison said yesterday that he had no objection to the boat (only to the way Alinghi are introducing the rule) but none of the representatives of the smaller teams we have spoken to want it, preferring instead to keep the existing boats, particularly if the next Cup is to be held within such a short time frame.

Cost cutting - two hulls, not two boat testing

Both Ellison and Bertarelli in the last 24 hours have mentioned cost cutting but there is no way that introducing a new boat over this time frame is going to be cheaper, nor benefit anyone other than the bigger teams, compared to sticking with the existing generation of boats for another cycle. Nor will it create a good competition, which both millionaires also say they desire. And allowing TWO brand new 90 footers to be built, as we were told today, certainly isn't any cheaper and why allow two to be built when even the largest most well resourced teams will struggle in the time frame to develop one? Far better surely to get agreement from all the teams on a rule for a new boat and introduce it for the 34th America's Cup?

Today Bertarelli spoke more about how they want to limit two boat testing to cut costs - teams can build two boats, but can't two boat test with them, nor can teams test individual boats against other teams as they please - again this seems highly irregular. Isn't this just another way of ensuring that Alinghi get maximum amount of mandatory race training time against the challengers in the same way as they have allowed themselves to enter the challenger selection series? There seems to be no cost implication in individual one boat teams racing themselves informally - so why ban that? Is it to ensure that Alinghi get to race in the challenger selection series?

So boat on boat training will only occur in ACM approved regattas and while we came away from the press conference assuming this only meant the Acts, Hamish Ross later expanded on this saying that ACM are planning on holding regular (weekly for example) races any team can join in. "We are not going to prevent anyone from doing other match racing or a Volvo. All that is part of it. We want to be like Formula 1 and create some tight restrictions on training and testing and to try and make this game a bit cheaper. We tried to make it cheaper last time but Oracle objected all the way."

The Challengers

A key point that has come to light from today's gathering was Alinghi's low opinion of the way the challenger group operated during the 32nd America's Cup and their interface with ACM/Alinghi through just one team, the Challenger of Record, by coincidence, BMW Oracle Racing.

Hamish Ross unleashed his views on this: "It was a complete failure from a defender’s point of view and an event point of view. It created divisiveness. It created a situation where the defender was never at the table, where the event authority was never at the table. And it gave a platform for troublemakers to create trouble all the time and frankly that’s what happened. So this time it was far more sensible to have all the people around the table, so if they have a problem all the people there can resolve it immediately. So you didn’t have people running out creating website blogs and creating positions for themselves [an attack on BMW Oracle Racing's Tom Ehman] and that’s been part of the problem. People have been talking past each other. It is time people started talking directly to each other and started solving the problem."

And the issue of the new challenger group have 'no voting power' as it states in the new Protocol? Ross continues: "The challenger commission never had voting powers before. It could never change the protocol. It could never change the rules. It was only a discussion forum."

Butterworth on the Challenger of Record

On to the Challenger of Record and we asked Brad Butterworth why they had chosen the newly formed Club Nautico Espanol de Vela rather than any other yacht club: "When you are the defender and you are going into the match you are trying to pick a partner where the venue is going to be at. It makes life a lot easier for the defender to host the regatta and it is far more of a partnership [bear in mind Alinghi being from land-locked Switzerland are in the fairly unique situation of having to defend overseas]. Last time we had a partnership with the Golden Gate YC and frankly it was a bad one. We could never reduce costs. We could never have any real partnership with them to promote the event because most of the challenging teams, unless they come from the venue, are trying to destroy the event because they want to make a better event next time. They are not interested in the event being good, they just want to win it and move it. That’s the dysfunction between the challenger and the defender."

Hence why they have a 'soft' Challenger of Record this time perhaps? Like Bertarelli, who talked up the Challenger of Record in his speech, Hamish Ross also defended them: "We obviously have a partner in terms of Desafio and there seems to be a suggestion that they weren’t part of setting the rules. They were. We sat down with them for over a week. There were many drafts we exchanged. They made suggestions which we incorporated. We made further changes..it was a normal negotiation process. They could have pulled out at any time. If they weren’t happy about something they would say so and their ultimate right is to walk away. When we explained our intentions all was fine and that is an important point. None of the other complaining teams have ever come to us and said 'look can we explain our concerns'. All we get is lawyers and legal action."

Who's calling who?

Yesterday Ellison maintained that he had called Bertarelli and the two had been unable to reach agreement. This is not Bertarelli's version of events, according to Ross: "No, he [Ellison] didn’t call Ernesto. Ernesto called him to say ‘what’s happening’ and Ernesto said 'can you tell me what your issues are so we can try and address them. Why don’t we meet so that we can sort them out'. And Larry said ‘I’ll call you back’. And what do we get in response? We get legal proceedings. That was about ten days ago."

Good news for Valencia

So once again the major announcements from today - excellent news about Valencia, great that Team New Zealand are returning - was upstaged by the legal wrangling. And in case you are wondering the Spanish government, the Valencia region and city are stumping up 105 million Euros to host the 33rd America's Cup, 40% from the Spanish government, 40% from the Valencia region and 20% from the city of Valencia. But this has still to be cast completely in stone. At present an agreement has been reached to sign an agreement in the next few weeks (deadline 4th September).

Michel Bonnefous told us that the Formula 1 race track proposed for next year will involve building a bridge over the channel leading out of Port America's Cup and that the race track will go inside and in some places outside of some bases. "There is some work that has to be done to make the place ready for hosting the Grand Prix, but for us it is pretty good because Formula 1 on shore and Formula 1 on the water. It is giving activity in the port. We have to live together obviously because there are some weeks of dismantling and installation and we’ll be managing that problem."

What if GGYC win in court?

During the press conference Bertarelli was asked if the GGYC win the court case in New York what would his next step be? "It is a big ‘if’, as you said. And honestly I will defend fiercely and with all my energy. Even though it is an unfortunate situation, totally unnecessary, I will defend not only Team Alinghi, but SNG and most importantly I will be alongside with Desafio Espanol, alongside yesterday, alongside today and alongside tomorrow. And Team Alinghi is not interested in Larry Ellison’s multihull race. Not interested. We are sportsmen. We are not lawyers. We are sailors. We are not corporate raiders. What we like to do is go sailing. And fortunately I have found a few teams to go sailing with. I don’t need Larry Ellison’s law suit in New York."

If you lose will you accept BMW as a challenger? We don’t have ANY intent of losing. Today is a day of…talking about sports, talking about friendship, talking about trust and commitment to a fantastic event that it does not need this kind of…excuse the expression…bullshit."

Brad Butterworth backed up Bertarelli's view: "I’ve only seen this one time before in 1988 when I was sailing around the world on Steinlager 2. I thought it was a joke then and I think it is a joke now."

So what exactly might happen if the Golden Gate Yacht Club (Ellison) wins their case against the Societe Nautique de Geneve (Bertarelli) in the New York Supreme Court. According to Hamish Ross: "In the Deed of Gift if there is no agreement it is the [New York] yacht club rules that apply. So if Larry in some unlikely circumstance gets his victory in the court it’ll be catamarans on 4 July, unless the courts extend it further, but it will be on SNG’s racing rules, SNG will choose the water, and SNG will choose exactly the dimensions of its own boats, only limited by the those overall dimensions in the Deed of Gift, whereas Ellison has to show up in a boat of precisely the dimensions he has specified in his notice."

This explains why the Golden Gate Yacht Club's challenge is also quite vague specifying a boat up to 90ft long and up to 90ft wide (rather than suggesting a challenge we believe a majority of teams would prefer - stick with the existing boats for this short cycle). "I guess the objective was to make it as broad as possible especially after what the response was to the big boat challenge last time, make a broad rule and that way you open up the design space," as Coutts told us yesterday.

Drawing conclusions

So the question is - is Alinghi's Protocol perfectly acceptible, as the four challengers who have signed up already indicate it is and is it Larry Ellison being the troublemaker, the bad egg, or is Larry Ellison trying to get a fairer fight for the challengers against a team that has got too big for its boots. If Alinghi are the good guys in this then they have a Protocol that suggests otherwise, even if the sentiment behind it, we are told, is well meaning.

With Alinghi now offering incentives/concessions to those who challenge, their position becomes closer to that of Ellison's and of course the best course of action would be for all the parties, the challengers and defender to meet up for a few days to thrash out a resolution. Will this happen? We hope so, but it will need a third party, such as Team New Zealand to broker such the deal.

But the underlying issue here is not whether the Ellison or Bertarelli is in the right or wrong - it highlights the limitations of the America's Cup itself where the present rules potentially allow the defender to create an unfair fight. Is this still something that is still acceptible in 21st century sport with so much sponsor money at stake?

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