Gladwell's Line - New America's Cup interesting, but will it fly?

by Richard Gladwell, Sail-World.com on 25 Jan 2017 News overnight was that five of the six existing America's Cup teams had signed an agreement outlining proposals for the 36th America's Cup, should one of them win the 166 year old Trophy.

Two time winner and the longest competing team in the competition, Emirates Team New Zealand was not one of those gathered in the hallowed halls of The House of Garrard, who crafted the original trophy that became known as the America's Cup.

The ideas are not new, having been floated by Golden Gate Yacht Club and then Oracle BMW's Tom Ehman in 2005 in an interview I did with him for a print magazine. The plans announced overnight were also referenced in a story six months ago in June 2016 in the Daily Telegraph (UK) as reported in Sail-World click here to read.

The concept was not picked up or acted upon and instead the Cup has moved further and further away from what is contemplated and prescribed in the Deed of Gift.

The changes have their roots in Formula 1 and organisation of motor racing events - which are undertaken by an overarching authority like any normal sporting competition.

But that is not the basis of the America's Cup which is a Challenge Trophy, contemplated by the 19th century Deed of Gift which governs the event, to be a match between two teams only. The allowance of multiple challenges only come into being in 1970 and is done with the permisison of the Challenger of Record who agrees to give up their right of Challenge to the winner of a Challenger Selection series. And, for the Defender to agree to sail the Match against the winner of that Challenger Selection Series which became known as the Louis Vuitton Cup after 1980.

The latest plan also borrows heavily from the changes made to the Volvo Ocean Race for the 2014/15 edition. That new event attracted seven teams, and for its second there will be eight boats, with two teams formally announced seven months before the start of the event.

The original changes to the America's Cup by Golden Gate Yacht Club were touted as being of interest to many teams, but only three challengers made it to the Challenger Selection Series in 2013. Further changes to this Cup, which has taken four years to organise, have increased the number of Challengers by just two teams.

The Deed of Gift for the America's Cup, the 19th century document which sets out the terms of competition for the trophy, specifies that it is a Challenge Trophy. The Challenger nominates the boat and dates of the Match, the Defender nominates the venue (implied in the Deed that it will defend in its home waters) and the regatta is conducted under its rules (and officials) (given that there were no universal sailing rules at the time).

Emirates Team NZ excluded
Emirates Team New Zealand are not included in the signatories, and previously they have said, may be off the record that it they win, or had won in 2013, they would have talked with the Challengers.

The usual way is to call a Challengers Meeting of interested teams and getting their views incorporated in a Protocol, which is written in accordance with the Deed of Gift for the America's Cup and will get the maximum teams participating.

The requirements of the host venue also have to be factored into the Protocol, and no America's Cup has ever before been held at a new venue inside four years, and on the two occasions when the Cup has been won by the Defending team the time gap is three years - into a venue with existing facilities.

The deal announced overnight in London, of course is not binding in any way at all under the Deed of Gift for the America's Cup. At best it is a statement of intent between the five teams that have participated as to what they could do if one of them won the 35th America's Cup and accepted a Challenge from one of the other group of five teams.

Short on key areas
What the document doesn't address is the issue of team nationality - and an 80% nationality requirement rule would wipe out half the existing teams. However strong national identity is seen as one of the keys to pulling large viewing audiences and support from the country of that team.

It also does not address the requirement of boats being 'constructed in country' as required by the Deed of Gift and watered down in the current era to just a small 2.7-metre section of the bow.

The timing of the announcement and its prescriptions locks the participating teams into a boat (AC50) which has not even been sailed yet.

Also not clear is the reaction of the major America's Cup teams who are not participating or have withdrawn from the current event - twice AC winner, Alinghi, and four-time Challenger Luna Rossa which pulled out of the current Cup after the class was changed by a majority vote of teams, some nine months after entries had closed and the AC62 boat type had been selected and widely promoted.

For sure there are some measures in the proposed Protocol which could and should cut costs such as the dropping of the use of surrogate boats, retaining the one design hull shape and wing sail profile, allowing existing tooling to be used and systems carried over. Currently some teams have built and sail up to four of the AC45S test platforms, while others are operating on just one. In other words they are building more AC type boats than Bill Koch did in the 1992 America's Cup - which triggered a two boat restriction for the next four Cups, until Golden Gate won and opened the rules again.

Adapting to new sailing technology is the key issue and deterrent for those new teams coming into the America's Cup.

It is difficult to put together a coherent case for sponsors to invest in the short time (now less than two years) and for the teams to come up to speed with a boat type which for most is new technology.

The retrospective rule changing by the current competitors by a simple majority vote with scant regard for the minority of the teams is a another significant deterrent to entry, particularly for a new team. The retrospective rule changing is a very serious issue for any team, and backers being asked to invest in an America's Cup campaign, and goes to the core of the credibility of the event.

But the key issue and deterrent for those new teams coming into the America's Cup (and putting together a coherent case for sponsors to invest) in the short time (less than two years) to come up to speed with a boat type which for most is new technology. The retrospective rule changing by the current competitors by a simple majority vote with scant regard for the minority of the teams is a significant deterrent to entry, particularly for a new team.

Challenger creates the changes
The fundamental point of the America's Cup, going right back to its roots is that it is a Challenge Trophy, and the very reason it has survived for 166 years is its ability to be changed every cycle depending on the Challenge accepted and terms negotiated between the Defender and Challenger of Record.

For sure New York Yacht Club, the longest holder of the trophy published a statement when it appeared likely that they would successfully defend, inviting Challenges with a set period, for a boat that it named, and that it would accept one of those for the next match.

While the notion of bringing in some certainty to future America's Cups is highly attractive, the trade-off is that the status quo is locked in.

A similar concept was used for the 1992 America's Cup running through to the 2007 America's Cup with the International America's Cup Class rule. Sure it wasn't a one design but the changing and tweaking along the way meant that the boats were redundant as soon as one Cup cycle had finished.

The key to any ongoing Cup is a viable competition, with stability of change in the class and being able to get new teams into the competition using initially second hand boats handed down from existing teams.

The Five Team Agreement (not publicly published) appears to address the boat issue. But it does not address the fundamental way in which the past two America's Cup s have been organised, marked by frequent Protocol changes. Further looking back to the oft-maligned 2007 America's Cup which was going to be 'fixed' by the current holders, that event attracted twice the number of teams, which in turn bring their new sponsors, fans and television audience.

And the event ran at a significant surplus (60million Euros) which was distributed amongst the teams and would have been sufficient to give those teams funds to survive the start-up period for the next America's Cup. That has not happened under the current holder.

The participation of the Defender in the Challenger selection series is hard to understand for most. As is the fact that under the current rules, the Defender could go into the Match with a one point advantage.

Venue selection is the stumbling block
The bottom line is that the fundamental issues with the current America's Cup lie in its organisation and not whether the boat is an AC50 one design and the duration between series.

The over-riding flaw in the plan is in venue selection and organisation, which cannot be done in the 18-24mths available. No host City/Port has been able to put the necessary marina facilities in place for a full America's Cup. It may be possible to put in place a Volvo OR type race support village, but this involves teams working in common areas and the usual America's Cup secrecy would be near impossible.

The only way that the venue issue can be resolved is for the Deed of Gift to be changed and for the event to be run by an overarching authority which controls rules, boat types and venues and for that to be done about four years ahead or more in a similar way to the Olympic Games bidding. In other words, you would have a situation where the winner of the America's Cup probably would not be able to defend in their own waters.

That takes away all the overriding rights of the Defender and Challenger of Record and hands them over to a company or 'independent' organisation - and is not what is stated in the current Deed of Gift.

In the current situation given that one of the Five are the winner of the 35th America's Cup, then it is likely that Bermuda would remain the venue for AC35, unless new facilities could be rammed through inside 18 months. In Bermuda the current sponsorship arrangements would likely be rolled over (currently the event fee is $5million a year for three years). There would be minimal infrastructure cost, and all up the costs to Bermuda would drop substantially for a second (or third) Cup.

The two year time frame would mean that the Cup could not be held down under, as that would place the Cup into the end of June 2019 in NZ which is well into the winter in New Zealand and Australia. That timing would in turn obviate a Cup moving from the southern hemisphere back to the northern - as the time lapse would either be 18 months or 30 months between Cup Matches.

The America's Cup has survived for as long as it has largely because of the Deed of Gift which allows flexibility and change, provided the Challenger and Defender are in agreement from the outset. In other words the boat type can be changed, along with the conditions of the Match.

If one of the teams who have signed up to the so-called Framework win the America's Cup in June 2017, then it is obvious that they will accept a challenge from one of the other four teams who have signed.

It is logical to expect that a condition of entry, set in the next Protocol will require any other Challengers to also sign up to the Framework - which really covers the transition phase between Cups, which has been a weakness exposed in 1988 and 2007 resulting in the cases bought before the NYSC.

Unless Emirates Team NZ win in June, this agreement will be locked in place and become self-perpetuating. Essentially it is a Contract within a Deed, and unlike the Protocol it will survive from Cup to Cup.

Of course, consistent with the current America's Cup, in a Protocol change on November 17, 2016 (signed by majority only) the teams are not allowed to make adverse comment about the plans for the future events.

Emirates Team NZ's limited response in social media to the proposals is 'On the future of the America's Cup:
Emirates Team New Zealand believe the future America's Cup format should be decided by the Defender and Challenger of Record as it has historically been.'

If Emirates Team NZ prevail in Bermuda, Luna Rossa (ITA) is expected to be the Challenger of Record. Twice winner, Alinghi is also expected to enter the Cup again, provided the rules are reasonable.

For Dana Johannsen's (NZ Herald) take on the arrangement click here