How to Take Charge of the America’s Cup

 

You have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you.”

– Cornelius Vanderbilt

 

 

 

Have Russell Coutts, Larry Ellison and Norbert Bajurin lost control of the 35th America’s Cup?

Update 31 August 2014:  Apparently not. Read news from the challenger meeting 29 July.

Imagine that I lead a team preparing for the 35th America’s Cup in 2017…  My name could be Max or Patrizio, Iain or Torbjorn, or Sir Ben, Sir Charles or Sir Keith…

Challenger of Record Hamilton Island Yacht Club agreed to a Protocol with some terms I would not have accepted. Golden Gate Yacht Club has said they will hold the event in venues I don’t like – San Diego or Bermuda – rather than in San Francisco. Two days ago, on 19 July 2014, HIYC withdrew their challenge, leaving the door open for a new, stronger negotiator. Here’s how my club can take charge:

Today we deliver to GGYC a Deed of Gift compliant challenge. Unless some other yacht club beat us to the punch, our club now becomes the challenger and GGYC has to negotiate mutual consent terms with us or face us in a DoG match. We are under no obligation to accept the Protocol negotiated by Hamilton Island Yacht Club. (Yes, there are some “gotchas” here – I cover them at the end of this article.) Here are our club’s four non-negotiable demands for the Protocol:

• One venue for all racing in the Challenger Selection Series and the Match: San Francisco
• The Defender does not race in the Challenger Selection Series
• No points from prior racing carry forward to the AC Match
• Obtain an ISAF approval for all racing that is part of the AC35 Event

We will immediately invite discussions with other potential challengers, hoping to build a consensus on other negotiating points, including:

• Boats: We would like to use the AC62 Class Rule.
• The current Protocol’s rules on numbers of boats and components that the Defender and Challengers may build and sail are acceptable to us but we are open to other challengers’ views.
• The Defender should be allowed to sail two AC62’s once the Challenger Selection Series begins.
• We’d like to see the “constructed in country” rules tightened – perhaps the same as in AC34.
• We would tighten the current Protocol’s restriction on “Surrogate Yachts” in order to eliminate the large potential expense of building up to three 45 foot long, sky’s the limit test boats (see Protocol Article 1.1 bbb and Article 35.7.)
• AC World Series: Not a “must have” for us, but seems like a good way to promote the AC teams for sponsors.
• We’d prefer all ACWS racing in foiling cats, perhaps SL 33’s or GC32’s. We think foiling is more important than wings. Maybe wings can be fitted to GC32’s; ETNZ and Luna Rossa showed that they can be fitted to SL33’s. It seems obvious to us that non-foiling AC45’s would be a big step backward. We also think that making a class rule for flying AC45’s and then building them would lead to needless expense.
• We prefer to include match racing in the ACWS.
• ACWS results can affect seeding for the Challenger Selection Series but not the score.
• Arbitration or International Jury: We have no strong preference.
• Commercial Commissioner: We prefer that the CC be selected by the same process as the Regatta Director.
• Enough event revenue (not team revenue) must be earmarked to provide the LiveLine TV graphics and open data.

For the sake of moving as quickly as possible, let’s assume that most of the other provisions of the current Protocol are acceptable. If we can reach consensus with the other challengers, great – that will guide our negotiations with GGYC. On issues where there is no consensus, then our club will decide how to negotiate.

Some potential problems with this strategy, and how to deal with them:

• What if GGYC claims that HIYC’s challenge is valid during the 90 day notice period after their announced withdrawal? No problem, GGYC must honor the first DoG compliant challenge filed after HIYC’s challenge, once HIYC’s withdrawal becomes effective.
• What if GGYC has a challenge from another club under the Protocol? Our response: even if that challenge came from our club, the method for challenging under the Protocol is not DoG compliant, so the first DoG compliant challenge must be honored.
• What if GGYC points out – correctly – that the Defender can choose the site of the Match? We reply that if they choose any site other than San Francisco then there will be no mutual consent and we will have a DoG Match.
• If another club (the rumored Canadian club perhaps?) has filed a DoG compliant challenge with GGYC before us, then they are in the driver’s seat for negotiating with GGYC.  If they are a backup hip pocket challenge that is both DoG compliant and GGYC pliant, then we are probably stuck with the current Protocol and San Diego or Bermuda as the venue.

Our strategy is based on asymmetric warfare. Unlike the way HIYC negotiated, we are keeping the nuclear option on the table. We want to negotiate a protocol acceptable to a reasonable number of serious challengers, but we are ready to sail in a DoG Match. We don’t need to win the DoG Match and we wouldn’t spend much money preparing for one. GGYC has shown they can win court cases and a DoG Match. But they’ve never faced a truly formidable opponent in PR battles. Our club is ready to wage total war on the PR front. What Cornelius Vanderbilt could do with money, we can do with PR.

We want a reasonable protocol, one conducive to commercial teams as well as billionaire funded teams. We doubt that the America’s Cup can be built into a large sports entertainment business commanding big TV rights fees. We’re certain that it won’t happen in this cycle. That’s not our concern. We believe that the 35th America’s Cup can be a grand sports event and can make economic sense for event and team sponsors, for San Francisco and for ACWS venues. That’s what we’d like to see.