The end of an era

Now no more, The Challenge Business was responsible for introducing more than one thousand people to offshore racing

Wednesday October 11th 2006, Author: James Boyd, Location: none selected
Since its inception in 1989 and the first British Steel Challenge over 1992-3, Chay Blyth's company The Challenge Business has taken unprecidented steps to popularise the sport of oceanic racing. The Global Challenge, as it has been most recently known, has taken novice sailors and turned them into hardened seadogs on the gruelling westabout round the world course against the prevailing conditions, on a route Blyth was the first person to complete non-stop singlehanded back in 1972. Sadly as of this week The Challenge Business is no more, the Southampton-based company going into administration, ready to be sold off or asset stripped.

To the professional sailing community the Global Challenge has always seemed like a bit of a joke, bringing out the worst kind of snobbery. The fact is that none of the critics have raced around the world against the prevailing winds (nor would they want to - is the normal retort) but after four runnings of the event, somewhere near one thousand average mortals - the butcher, the baker, the candlestick maker - now have. And then there are all the other events The Challenge Business have run, round Britain, transatlantic, etc. A majority of the crew who have taken part in these events, not to mention their friends and families, now hold a keen interest in offshore racing from which pro events like the Volvo Ocean Race or the Vendee Globe will certainly benefit.

"It has touched so many people," says Andrew Pindar, who had an early introduction to offshore sailing via Blyth. Pindar's Yorkshire-based print and multimedia company followed the classic route first becoming a Business Club member and subsequently backing boats in The Challenge Business' recent races. "I was talking at a local lifeboat meeting recently and there were three people in the audience who had nieces or nephews who had sailed at least one leg of the race. I don't think people realise how much it permeated through society. It became something people could do. People scoffed at it to begin with but Chay proved them all wrong."

The Global Challenge has been the springboard for the careers of several top sailors in offshore racing including Mike Golding, Pete Goss, Volvo Ocean Race Race Director Andy Hindley, Conrad Humphreys and of course most recently Dee Caffari. Significantly it has also provided numerous companies a taste of our sport some of whom, most notably Group 4, Pindar, Motorola, Basilica and Aviva, have gone on to sponsor bigger projects.

Golding maintains that winning the BT Global Challenge was one of his happiest most fulfilling achievements. The experience also provided valuable training for how he would approach his subsequent projects. "As a test of a skipper I can’t think of a single better thing you could do than lead a large group of amateurs around the world. We had 21 in our team, not all on the boat, and that is a real challenge as a manager and as a leader and as a sailor. So you have all the challenges. And there is nothing more character-building than that combination."

So where did it all go wrong for Challenge Business? One might think that there was only a finite number of people having the desire to beat their brains out sailing the wrong way across the Southern Ocean, not to mention finding the funds to pay the hefty Global Challenge entry fee. In fact this was not the case, with numbers of people looking for that 'life experience' remaining as buoyant as ever.

The reason cited by the administrators has been a lack of a title sponsor for the Global Challenge. "We have been working with company’s bank and the directors for a while, looking at their financial position and considering their options," says Nigel Morrison, Recovery and Reorganisation Partner with accountants Grant Thornton in Bristol, who were appointed administrator of The Challenge Business on Monday. "After a lot of discussions the directors decided that they had no option but to put the company into administration and I guess that was precipitated by the disappointing response to trying to find a sponsor for the next Global Challenge Race in 2008-9. Finding someone to sponsor that race was the lifeline on which the directors were hanging their hopes."

The Global Challenge was first held as the British Steel Challenge in 1992-3 and the subsequent two were high profile affairs sponsored by BT. Since then The Challenge Business were unable to find a sponsor for their last round the world race and to date have had similarly no joy for their next event. BT which pulled out due to their own internal issues have now ironically found themselves back at the sharp end of yachting sponsorship when they acquired Infonet, one of Alinghi's main sponsors but they seem to be doing nothing to exploit this potentially hiighly beneficial association.

Mike Golding, skipper in the British Steel Challenge and winner of the subsequent BT Global Challenge in 1996-7 gives his view about the demise: "From a sporting perspective I think the Challenge lost its edge because the first time it was a case of ‘can this really be done?’ And the second time there was a genuinely good sporting story, because by then some of us had established our names and reputations and some of the skippers had not, so there was this really good mix of the new up and coming guys and guys who had done well in the previous race. Thereafter Chay decided to make it all new skippers every time and that blocked any feeling for the press to follow it."

In fact after the novelty of the first two races had worn off, the press perspective of the Global Challenge was that the event was certainly a top adventure but racing between crews made up of amateur or novice sailors and unknown skippers was not top sport, akin to watching local clubs rather than premier league teams out on the field at Wembley. Even the charismatic Blyth was unable to convince us otherwise. Where the Global Challenge could have scored majorly in recent years was, in this age of Big Brother, as the ultimate reality TV entity but for some reason this avenue was never fully exploited.

Aside from the sporting aspect Golding feels that The Challenge Business were not alone in failing to secure backing from corporate UK. "The fact is that in the UK we suffer from a corporate apathy towards sailing. My sponsor is Belgium. My last sponsor was Dutch and my backer is Swedish. We don’t get British sponsors. Ellen broke the mould with Kingfisher, but then it ended up being half French. In the UK somehow we haven’t captured proper corporate level sponsorship. Why isn’t the Challenge a good thing? I think BT had a fantastic involvement with the Global Challenge and it was a roaring success. Unfortunately BT went through their own crisis towards the latter end of that."

Andrew Pindar is of the opinion that when BT was on board it was like a corporate endorsement of the event and their involvement enticed other companies to get involved.

An obvious comparison can be made with Clipper Ventures, established by Blyth's arch-rival since the 1970s, Sir Robin Knox-Johnston. While The Challenge Business had the original idea and event, Clipper Ventures followed with their own round the world race for amateur paying crews but on a more pleasant course, westabout too but taking in the Caribbean, Panama Canal, Pacific, Indian Ocean, never venturing south into the icey wastes of the Southern Ocean. While The Challenge Business held the high ground between these two companies' events for so long, Clipper Ventures perhaps had to fight harder and ultimately it would seem, smarter becoming AIM-listed and realising event sponsorship would not be forthcoming from the UK opted to get most of their backing from host ports, a move since mimicked by the Volvo Ocean Race.

Mike Golding reckons that the Global Challenge should have evolved more. He cites as an example the change of boat for the third race. "The trouble is that the boats have now done two turns. I think perhaps the mistake that was made from a business perspective was the second boat. Maybe they could have run the first boats three times? And then in my opinion they should have made the second boat racier. The second boat started out very racey and very sexy and wouldn’t have looked out of place among today’s race boats but it kind of morphed itself into the first boat. I think in the end they just became hire vehicles to go around the world on!"

So what now? This week Grant Thornton are examining the company's assets to establish their value, but they would dearly like to sell the business as a whole.

"Our job is to take control the company and to establish what their assets and liabilities are and then to realise those assets in the best possible way. In essence it is quite straightforward because the assets are clearly the fleet of 18 yachts," explains Nigel Morrison. "There are some sundry assets in terms of spare parts and the usual sorts of things like furniture, equipment and computers but a vast majority of the value is held in those 18 yachts. And what we are doing at the moment is gaining some specialist advice on the value of those yachts and the best way to sell them. We will do that in an orderly way and we will take as long as we need to do that to achieve the best values for them. Simply because the company is in administration doesn’t mean that the yachts will all be offered at absolute knock down way."

With administrators in, The Challenge Business is no longer trading. "This time of year the company is coming into the quiet season," continues Morrison. "Obviously the corporate hospitality sailing effectively has all but ceased at this time of year. There were one or two booked over the next couple of weeks which we’ve unfortunately had to cancel because we couldn’t guarantee we could deliver those days for insurance reasons and all sorts of other things." As a result a few redundacies are imminent. Staff will be kept on in the financial department to help the administrators, while the technical team will also be kept on board to look after the boats.

Morrison says he cannot comment on the alleged £81,000 Blyth took from the company directors' account as an unsecured, interest free loan as he was accused in the Telegraph, but one suspects the company owes Blyth considerably more than this. "I believe that the Director’s Loan Account has been in place for quite some number of years. I don’t think it has been taken from the company recently. It is something we’ll look into in due course," says Morrison.

Mike Golding sums up what the loss of The Challenge Business means to him: "It is the end of an era. I was very proud and pleased to be involved at the height of it, both when it was the first of its type and when BT started sponsorship and it attained its full potential. An event like that has affected so many people.So it is really a sad day. Having said that you have to celebrate the things it did. At the end of the day we are all trying to make oceanic sailing worthy, practical and valuable to a sponsor and no one has done more for it than Chay."

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