34th America's Cup theorising

Russell Coutts on the venue, timing and independent administration

Now that BMW Oracle Racing has won the America’s Cup and announced that the Challenger of Record will be the Club Nautico di Roma and their team Mascalzone Latino, what lies in store for the 34th America’s Cup?

Is the 33rd America’s Cup finished in court?

While it seems there is no reason now to pursue the Constructed in Country proceedings that are due to be heard in court later this month, Russell Coutts would not commit to whether the longer term Breach of Fiduciary Duty case they brought against the Societe Nautique de Geneve would be dropped.

“A lot of these arguments were to get fair rules on the water. Now that has been decided we’ll put the past behind us. It is really Larry’s call on that, but I think we have resolved most of it. There are some important issues to be thrashed out with the Breach of Fiduciary Duty claim - I believe that is an important consideration for the sport going forward to clarify what can be done so that we don’t have a repeat. There could be ways to solve that outside of the court, but you might need to get some direction from the court.”

So perhaps not entirely done and dusted in the courts, but hopefully not the scenario where the Constructed in Country case went ahead, resulting in both boats being deemed illegal…

Beyond this the principle questions over the 34th America’s Cup are where, when and what type of boats? And at present Russell Coutts says they have no answers to any of these questions as they have been so entirely focused on winning the 33rd. Coutts is also superstitious and one doesn’t get the impression he likes to jump the gun – on Sunday he even stopped the party organizers from pressing the ‘go’ button just in case it jinxed the outcome.

However he goes to great lengths to stress that all the issues surrounding the next event will be discussed en masse and at length with the America’s Cup challengers to ensure that the right decisions are made early on to have solid building blocks in place going forwards.

Venue

In past months Larry Ellison is known to have had meetings with Valencia officials and at one point pledged to hold the next event in Spain’s third largest city should he win the 33rd AC. But this was around the time of the court squabbling over the 33rd AC venue and the team has gone quiet on the subject since.

It is believed that intervention and pledges from the King of Spain, swung Ernesto Bertarelli away from Cascais to Valencia prior to the 32nd America’s Cup. On Sunday Larry Ellison confirmed that the King had been in contact, but he personally hadn’t seen the communication. “He is an Olympic sailor and a fantastic person and has been very supportive of the AC in Valencia.”

On a possible return to Valencia, Ellison added: “I think we are open to considering a lot of options. Valencia has been a fantastic host to the last two ACs. As you know we pushed very hard to hold this Cup in Valencia. It wasn’t the defender’s first choice. It is a great place to sail.”

However Ellison is from the US, his club, the Golden Gate YC is based in San Francisco and another possible red herring is that Ellison last month acquired the old Astor mansion on Newport’s fashionable Bellevue Avenue. Newport being the historic home of the America’s Cup during the New York Yacht Club’s tenure is likely to be a bonus.

“I haven’t made any decisions at all,” continued Ellison. “We will certainly talk to the city of San Francisco, but you don’t make these decisions independently. Whether it is Newport, RI or San Francisco - we will need a lot of support from the city and room to develop an America’s Cup base. We are going to have to talk to San Francisco and see what is available on the water front there. We would have to development where we can have bases for many teams - because it will be a multi-challenger event. We had a fantastic Moet Cup in San Francisco. I love to sail there. But we need the full cooperation of the city to do that.”

How the decision on the next AC venue will be decided should be an interesting one and when we tried to probe Coutts on this topic he wasn’t very forthcoming, because it seems he genuinely hasn’t given it much thought. However it seems there are a couple of significant differences between how the decision to go to Valencia was made and how the venue decision for the 34th AC will happen.

Firstly with the 32nd America’s Cup it was the first occasion that the America’s Cup had been won by a country with no coast of its own. In the past, when Australia or New Zealand won, there was no question of the next event not heading for their country. When Alinghi and the Societe Nautique de Geneve won, suddenly with Switzerland having no ‘open arms of the sea’, the process became a bidding war, along the same lines as the World Cup or the Olympics, between cities ranging from Cascais in the west to Naples in the east.

With Ellison, Coutts maintains, the venue decision will be made in a very different way, to how Valencia was chosen. So while there may still be a bidding process, financial incentive may not be on the agenda. “Larry doesn’t view this as a business, which is point one,” says Coutts. “And that is a point that the sport can utilise to its advantage to make the America’s Cup better hopefully for a long time, maybe even permanently. Meaning that the changes that get made it would be hard for someone else to undo.” By this Coutts is referring to getting independent management for the America’s Cup on a permanent basis to prevent the event being hijacked by future defenders.

Saying this one significant component that might swing it back to Europe is that here, or in many countries at least, there is a much great opportunity to receive support from local regions and cities to back an event than you are likely to find, especially in towns in the US, like Newport.

We suspect the next venue will be chosen with both more dramatic sailing conditions and the correct available shoreside infrastructure first and foremost.

“Fremantle, Australia was one of the most exciting Cups ever, even if you consider that now the boats are old fashioned,” says Coutts. “The television pictures were just stunning in 25 knots of breeze and big waves. I remember that switching the TV audience in the States on to sailing. That is definitely an important consideration for the AC match. Perhaps the boats need to be suited to whatever conditions are selected as well. One of the problems you have got with sailing – if you have light winds and you can’t start the race on time it is devastating for television and for all the people that are coming to watch the event and even the contestants, their having to sit around waiting is not ideal.”

He continues: “Similarly if it is blowing 25 knots and there’s big waves – I would suggest you still need to be out there. This is supposed to be the pinnacle of the sport and you can’t call races off because its too rough while there’s an Optimist race going on, like it was in Auckland, three miles away and the America’s Cup race has been cancelled because there’s too much wind. It just doesn’t make sense.”

So – back to boat breaking!

It will also be interesting to see if the venue is chosen in consultation with the challengers as would be consistent with the general spirit of where Coutts is trying to place the Cup, or whether he sticks to the Defender’s right under the Deed of Gift, to allow themselves to the make the venue call.

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The America’s Cup – a commercial entity?

There is some debate within Cup circles as to whether future events should be like the 32nd America’s Cup or the 33rd minus the prolonged legal dispute. With the 32nd the event become very Formula One-like with a large number of teams all housed in their magnificent bases around the Darsena harbour in Valencia. Valencia provided good stable racing conditions with a reasonable sea breeze on the one hand, but which were also generally quite boring and Mediterranean on the other. The Version 5 boats, while long in the tooth, regularly provided very close matching.

In comparison the 33rd America’s Cup was between two of the most radical boats ever created, a competition spurred by the rivalry between two of the world’s richest men: one thinking the other was corrupt and hijacking the event for their own gain, the other accusing their rival of challenging them in court because on two previous occasions they had failed to win on the water. In media terms the 32nd America’s Cup was a sports event, the 33rd, thanks to the ‘biggest, fastest, richest’ element to it, was decidedly a news event.

We suspect that the original vision for the America’s Cup was along the hugely elitist lines of the 33rd, while a more acceptable version of it today is the 32nd. However the danger is that by going too far down the 32nd route the America’s Cup is in danger of becoming just another regatta, albeit on steroids, and what Coutts refers to as ‘its magic’ might get lost in the process. This is another likely outcome if the event becomes over commercialised – and creating independent management and democracy might actually compound this – and say, for example, the event’s new administration decided to somehow empower itself to decide the venue and dates for future America’s Cups, like every other major sports body is able to do their events.

So is it likely that independent management will require a change to the America’s Cup Deed of Gift? Coutts: “We could do because one of the things that the teams and commercial partners would like is some security on the future, so that someone couldn’t come in and do something crazy. But the Deed of Gift has worked – that is the other way of looking at it. That is one of the powerful things about the ‘mutual consent’ clause. In actual fact I think the original donors wanted to force the parties to get together to agree on the racing rule, otherwise you have this default position as a fall back. It is certainly something that should be considered. You might want to prevent a rogue defender going off and doing something crazy with it.”

If what Coutts says is true and Ellison really doesn’t have his own commercial agenda for the event and there is genuinely a blank sheet of paper at present in terms of how all aspects the event will be set up in the future, then it is indeed exciting times for those involved to form the event going forwards, until, hopefully, another Fay or Ellison steps in to rock the boat, pressing the ‘reset button’ on the event.

“I think we have a real opportunity with Larry this time,” says Coutts. “He has committed to independent management. He has some big ideas with TV and as he says, he is a techo! He looks at the TV coverage and thinks ‘we could do some pretty cool things with that’. That is where Larry’s expertise and enthusiasm is and that is something that could make the Cup a lot better.”

Independent management

Coutts has announced that for the 34th America’s Cup: “There will be independent management of all the competitive aspects of the regatta, all the on the water, racing, race officials, umpires, jury, organisers for on shore organisation of the regatta and so forth will all be independently managed. That is an important step for all the competitors and commercial sponsors, that they know the rules will be fair and equal for all competitors.”

While this has been much discussed and particular a soapbox for Paul Cayard, Coutts says he and the rest of the challengers have yet to work out its make-up and the limit to its power.

In terms of how who would run it, there has been talk of its board being populated by representatives of all the former trustees of the America’s Cup (ie New York YC, Royal Perth, San Diego, etc), representatives of the challengers and the defender(s), along with media and commercial experts.

Their jurisdiction would certainly be to employ the event management company, the ACM equivalent, its executive, to look after the running of the event without direct interference from either the defender or the challengers.

Timing

There are several opinions about this. One is that the next America’s Cup should be held as quickly as possible to minimise the damage done to commercial partnerships over the last two and a half years. In this case we could be looking at a fast turnaround event in Version 5 boats. But would the AC community really want to hold an event in 2012, the same year as the Olympics?

The majority of teams in the AC community we believe are ready for a new boat. If this is the case then the earliest the 34th America’s Cup could happen would be in 2013 with the new boats launching in 2012.

Timing is also dependent on the venue. For example the for the five year gap after Team New Zealand won in 1995 was to allow time for Auckland’s Viaduct Basin to be converted into a suitable venue. If the America’s Cup community wants the next event to take place sooner rather than later they will either need to find a venue that can replicate the set-up around the Darsena in Valencia. Alternatively it has been suggested that the America’s Cup perhaps doesn’t need a shore-based set up that is so permanent and grandiose as the one set up by the Spanish hosts. In this case it may well be possible to hold an event over a shorter time frame, resorting to temporary structures for the bases.

As to when Coutts reckons he might start talks with the challengers, he says: “You don’t want to keep the whole world waiting. We just need to recharge our batteries and then we’ll probably do a better job. If you spoke to Alinghi that was probably one of their mistakes that they rushed in with sweeping changes without having the time to think through it. So maybe two or three weeks. And then think about the process. Larry will have some good ideas on that. One thing he is good at doing is putting together teams to make decision. That is something we need to get right. We want to take some time to get these critical decisions right.”

Other issues:

One of BMW Oracle Racing’s fundamental objections to the initial SNG/Alinghi Protocol published immediately after they won the 32nd America’s Cup was over the defender being allowed the right to race in the challenger selection series leading up to the Cup itself. Coutts is adamant that they, as defenders, will not be racing in the Challenger Selection series. How this will work, he says will need to be discussed with the challengers.

When arguing the case for this back in 2007 Brad Butterworth maintained that with such a strong challenger selection series the America’s Cup was becoming increasingly difficult to defend. So it will be interesting to see the solution Coutts comes up with.

Won’t this prevent cost reduction, which almost everyone agrees is a vital component given these hard economic times? Coutts says it doesn’t have to be, maintaining that for Cup teams typically 65% of the budget goes on salaries. “If you put black-out periods on the sailing, you’d save a lot more than you would by only building one boat. This campaign was an example – this boat was out there every day and all you did was spend more money on developing it. Don’t forget that even under the old rule you could build one boat and heavily modify it: You could chop it up, so it wasn’t really a one boat campaign. If you look into the costs I don’t believe it was saving money.”

A fundamental difference this time around compared to recent Cups in Valencia in New Zealand is that with an American defender it is possible that we might see another US yacht club wishing to compete, thereby allowing a defender series to be held. If this is the case then one boat campaigns might be a possibility.

Coutts has also pondered the return, in some much less Draconian form, of the nationality rules for teams. “I would not rule discussing it, at least partially for the crew, if people thought it would make it a better event. The Volvo does it partially with some younger sailors on the boat. It should be discussed in my opinion.”

Tomorrow we will look at the boat options