A solution?

Paul Cayard spells out the case for independent management of the America's Cup - which surprisingly both Bertarelli and Ellison agree with

Given the murky depths the 33rd America’s Cup has plummeted to, Paul Cayard, past skipper of America’s Cup challengers Il Moro de Venezia, Stars & Stripes and AmericaOne and most recently with the Spanish team El Desafio, last week restated his view about how the America’s Cup desperately needs independent management, if we are to avoid a repeat of the present torridness.

For as he warns: “I think if we don’t change the structure, it is going to be hard to convince sponsors to come into this game. A good businessman, Iberdrola, etc is going to say ‘is this going to happen again? What guarantees do you have this isn’t going to happen again?’ Right now as a sport we don’t have any guarantees, so I think we have to fix it.”

Cayard first explains a little bit about what a ‘trust’ is. “The America’s Cup was gifted by George Schulyer to the New York YC, but it was in trust. And you have to understand about US trust law. For example, I am the trustee of my parents’ estate which they have gifted to my children. So I don’t have the right to take the money or the funds that my parents have decided to give to my children, but I am expected to manage that trust in the best interest of my children when my parents are deceased. That is common in the US.

“When you win the America’s Cup you are first the trustee and that means you are supposed to look after namely the Trophy, but now, after 160 years, it is the honour, the dignity, the history – it is a lot more than just a piece of silverware. That is the first obligation. Then the next right is to have a team and that team would be a defender and that is a competitor for sure, that person’s interest is to do everything they can to retain the trophy. So what is really missing in this whole picture for the last two years is that there is no trustee. There is no one looking out for the Cup. There are just two competitors. For two years we have read ‘it is about Alinghi and Oracle’. Well where is the SNG? And who is the SNG? And the answer is that the SNG is Ernesto [Bertarelli], it is one and the same and that is a fundamental breakdown of what was started 160 years ago when George Schuyler gifted the America’s Cup in trust.

“In those days it was more Corinthian and the concept was that a yacht club, a body of people who were passionate about the sport, could at the same time look out for the event and field a team. At times when I first raced the America’s Cup there were three of us [defending teams]. There were defender trials for the New York YC and they probably hoped that Dennis [Conner] would be their guy, but I was racing with Tom Blackaller and there was John Kolius on Courageous and we were fighting it out to see who would eventually be the team that would race against the challenger. But there was this other body [the New York YC] that was the trustee. In short that the big picture is that we have lost the trustee.

“It is not unreasonable that what was set up 160 years ago doesn’t work in the world we live in today. We have two multi-billionaires competing and they have their agreements with their clubs and I’m not go to say that Larry [Ellison] wouldn’t have a huge influence over the Golden Gate Yacht Club if they won the America’s Cup, but it wouldn’t surprise me. It is just the nature of the world we live in today. What is a yacht club compared to a billionaire? Not much. So we need a change. It is pretty obvious and I think we should just go to something like an Olympics or World Cup Soccer-type structure where we have a board of trustees which in our case could very easily be the past trustees of the America’s Cup, starting with the New York Yacht Club, Royal Perth YC, San Diego Yacht, Royal New Zealand Yacht Squadron and SNG. So you would have a board and they would hire independent and professional management to run a proper world class sporting event, independent of who wins. You would figure out how to give some benefit to the winner. Of course the big carrot about winning is to bring the Cup to your country and to host it. There is financial benefit, but there is also pride, nationalism and you would find a way how to handle all that.

“The situation we are living in right now is terrible for everybody. It has ruined an industry. It has ruined our memory of the best America’s Cup ever – Valencia 2007, no doubt about it. We don’t really know what the long term damage is going to be.”

So Cayard is proposing that an entity is set up to manage the America’s Cup permanently, with a board made up primarily of past trustees, that, significantly, would run seamlessly from one Cup to the next. This board would manage a permanent ACM-style executive working at the coal face on anything from media rights, brand protection, to race management to writing the rules, choosing the international race jury and arbitration panel members.

To achieve this within the set-up of the America’s Cup as it stands at present would firstly require a willingness on the part of the defender and challenger of record for this to take place. Then it could be achieved in the short term by making it a feature of the Protocol of the xyzth America’s Cup that anyone signing up to challenge for the trophy (or defend it) would be obliged, in the event of their winning, to hand over rights to manage and run the subsequent event to the board of trustees and their executive. Alternatively, or hand in hand as a longer term project, the Deed of Gift would need to undergo a wholescale amendment somehow allowing this board and executive type structure to run the Cup in perpetuity. Ideally the ultimate arbitrators for the America’s Cup should not be the New York Supreme Court but an arbitration panel made up of judges selected by the board of trustees, the Supreme Court only brought in the unlikely event of there being a complaint against the board.

So in this scenario, what benefit does the winner turned defender get? Firstly there is the prestige of winning the oldest of international sporting trophies. The winner should still get to choose the venue – and remember that one of the reasons we are in this present situation is that Alinghi, coming from landlocked Switzerland, aren’t able to host the event on their own territory. In terms of the business-side of Cup, the defender should receive the largest chunk of the profits from the event, the remainder going to the challengers - to their credit for the 32nd America’s Cup ACM proved extremely adept at this, net profits from the event amounting to 66.5 million Euros.

Cayard continues: “To me it boils down to an almost religious question, which is: Should the America’s Cup stay the event it always was and you just live with it for as long as you can as the centuries go on, as out of place as it gets as time changes? Or do you say that trophy, the America’s Cup, has huge significance and history and tradition and value to the sport of sailing? Let’s remember George Schuyler wasn’t a guy who did whatever anyone else did. He was the most innovative guy of his time. He came with a completely different boat to England (in 1851) and kicked everybody’s ass. So what do you think George Schuyler would say right now if he was alive today? Would he say ‘no, no, we have to keep it the same as when I wrote it 160 years ago, because that is the way I wrote it? Or would he say ‘wait a minute, we live in a different world today and maybe we need to amend this thing a little bit’?

“There was just a different consciousness I think in those days. So the mutual consent thing was perhaps applicable. But the world we live in today and not favouring Alinghi or Oracle, you have two very very powerful guys, who will sue anybody at any time, buy any company at any time, fire as many people as they need to fire to make a profitable situation – that is the competitive mentality that we have whether it is in business or sport. So some of the connotations that are in the Deed of Gift are a little bit naïve for the world we live in today I think. To alleviate and prevent that from being an Achilles heel is not that hard. We simply have to create a proper structure that has guidance on its top level, a board of trustees and independent professionals on the operative level. We are the only major event that doesn’t have it. It really isn’t a very long conversation.”

Russell Coutts has stated that Larry Ellison has agreed to establish independent management of the America’s Cup, should he be fortunate enough to win it. Cayard says he has been pushing for independent management since he challenged in 2000, with AmericaOne via San Francisco’s St Francis Yacht Club. What is intriguing too, is that all of the above is more or less what Ernesto Bertarelli was promoting back in December 2007. As part of an open letter back then Bertarelli stated the following:

“With a view towards the future and having studied the rules of the Cup, I observed that the Deed does not actively promote parity for the teams and a long term future of the event.

“In October of this year I went to New York to start a dialogue with the New York Yacht Club to examine what enthusiasm there was to make the event more relevant to today’s sporting landscape. The Deed of Gift was, after all, written over 150 years ago at the NYYC and could not anticipate the changes that the world has undergone. I was not expecting the discussions to be completed swiftly but I was thrilled when Charles Townsend, Commodore of the NYYC and George W. Carmany III, Chairman of NYYC America’s Cup Committee, expressed the same feelings.

“It is fair to say that the 33rd America’s Cup has been ill-fated and I have a desire to make it right. The fastest way to achieve this objective would be for the Golden Gate Yacht Club and the Société Nautique de Genève to work with the New York Yacht Club on revising the Deed of Gift to make it appropriate for today without losing what makes the America’s Cup special. As part of this process I am happy to compromise on some of the Defender’s rights to achieve what is best for the event.

“In effect, I raise the following questions:
- Should the Defender automatically be qualified for the final AC Match or should all teams start on equal footings?
- Should the schedule of venues and content of regulations be announced several cycles in advance allowing planning and funding?
- Should the governance of the Cup become permanent and be managed by entities representing past and current trustees as well as competing teams?

“Over the weekend I spoke at length with Larry Ellison explaining our proposal and I was pleased that he was very supportive of the principles in the proposed changes.”

So seeing as this is one aspect of the America’s Cup that all parties DO seem to agree on, perhaps instead of costly, highly tedious and possibly never ended trips to the Supreme Court, both warring factions should instead take the positive step of setting up this board of Trustees and its accompanying executive, with both Bertarelli and Ellison’s team signing away their rights to it. And doing this right now.

This entity could then run the 33rd America’s Cup. For at present this is the only way we see that this event is going to get fought for on the water any time soon. There is even danger that prolonged court action, that’s is likely to continue well beyond the 33rd America’s Cup should it be held in February, could ultimately kill off the world’s oldest international sporting trophy.