America's Cup- February ACEA email supports Kiwi claims on Qualifier

by Richard Gladwell, Sail-World.com NZL on 11 Apr 2015 An email received in mid-February from an America's Cup Events Authority spokesman confirms that the Qualifier Venue decision was made in at that time, as required by then current version of the Protocol governing the conduct of the 35 America's Cup.

That version required publication to be made by February 15, 2015 by ACEA.

Sail-World queried ACEA on February 16, asking whether the Decision had been made and published as required by the Protocol. If not, a serious breach of the Protocol could have occurred

Feb 15 - Sail-World: 'As you know the deadline for an announcement on the Qualifiers Venue passed overnight. What is the Decision please?'

Feb 16 - ACEA Spokesman: 'Hi Richard.

The following is on behalf of the Commercial Commissioner and the teams via the Competitor Forum:

“An official announcement will be made during the first week of March concerning the venue, dates and format of the America’s Cup Qualifiers and the America’s Cup Challenger Playoffs.”

I expect to have a date for that announcement within about ten days time.'

All previous Announcements required by the Protocol have been made publicly on the due date, prompting Sail-World to run a speculative story that the deadline had been missed.

This prompted a second response from the ACEA spokesman clarifying the situation:

Feb 17 - Hi Richard.

My understanding is the Protocol deadline was met - the required information has been published to the teams. The public announcement of that information will take place in March.

It is clear from their own statement that the required Decision was made by ACEA by the required deadline. The Decision was communicated to the teams by way of a Regatta Notice - stating that Auckland was the Qualifier Venue, and the dates were named.

The date of the start of the Qualifier is especially important as it sets the limit of the 150 day period after which the teams can launch their then AC62. It also triggers certain other key events in the 35th America's Cup Regatta cycle - important for design and logistic decisions.

An Auckland Qualifier would advance that launch date by at least two months. Teams are also precluded from sailing against each other in the AC yachts outside of the Qualifier Venue.

But having already announced the Qualifier Venue on the required date of February 15, 2015, a new edition of the Protocol (now Version 4) calls for the Host City, Venue and dates to be published by April 15, 2015.

On their social media site, Emirates Team New Zealand published what would appear to be a signed and accepted Venue bid agreement for the Qualifiers, dated February 14, 2014 and signed by Emirates Team NZ COO Kevin Shoebridge and ACEA's Commercial Commissioner Harvey Schiller. The Venue Agreement was subject to the signing of a Hosting Agreement that was not sent by ACEA for a further five weeks.

That begs the question as to how, if a Venue has been decided and announced by ACEA, in compliance with the then Protocol, and a Regatta Notice issued to Competitors, how that can be re-announced as maybe a different Venue on April 15, 2015?

Is there no such thing as the sanctity of a signed contract any more in the America's Cup?

Shifting position claimed as excuse
The reason for the claimed withdrawal of the Auckland venue, by Schiller was 'Team New Zealand 'bouncing back and forth on support' for the unprecedented mid-course downsizing' - a reference to the controversial decision to change the class of yacht to be used in the America's Cup from the AC62 to a smaller boat of less than 50ft.

The offending message posted in social media by Emirates Team NZ read: Emirates Team New Zealand agrees with Luna Rossa Challenge . It would be unfair to change the rules at this stage unless all America's Cup teams agree to do so.

Just hours before Schiller's shock email purporting to pull the Qualifier Venue from Auckland, Team New Zealand had expressed their support for Italian team who had overnight issued a statement saying that the class of boat could only be changed by a unanimous vote of the competitors, not a majority.

Schiller's boss, ACEA CEO, Russell Coutts took a hammering from fans on his Facebook page over the decision to change class.

Coutts correctly points out that the decision to change the Class is one for the Competitors only and nothing to do with ACEA, who is a privately owned company responsible for the commercial and marketing activities associated with the 35th America's Cup.

That delineation being correct why does Schiller, cite as the main reason for the indicated Venue withdrawal, an issue that his boss says is nothing to do with ACEA?

Sail-World understands that the poll taken by the competitors consisted of two options - a Qualifier in Auckland in AC62's - with a Play-off's and Match in Bermuda; or the entire series in Bermuda in a smaller boat (45-50ft). The outcome was hardly surprising as self-interest prevailed for the newer teams, and both long-established teams, Luna Rossa and Team New Zealand would have been the hardest hit on several fronts.

The Qualifier Venue issue has already been placed before unpopulated Arbitration Panel, the adjudication body for the 35th America's Cup.

It is not known whether the change of class from an AC62 to a smaller boat will also go to the Arbitration Panel. That was the change, by majority vote, which prompted the withdrawal of Challenger of Record, Luna Rossa.

The significance of words
While many commentators make the assumption that a vote of the majority of the Competitors (with the consent of the Defender) can make change to the Protocol, that would appear to be contrary to a literal reading of the Protocol.

Article 20.1 of the Protocol state: 'Subject to Article 20.2, this Protocol may only be amended with the agreement of GGYC and the Challenger Committee.'

The keyword is 'amended' which according to the Oxford English Dictionary generally means To alter the wording of (a legal document, for example) so as to make more suitable or acceptable.

In other words, the Protocol can be tweaked but not changed.

The word 'changed' according to the same authority means 'To give a completely different form or appearance to; transform:'

If Article 20.1 had the word 'changed' instead of 'amended' then the change of Class mid-Cup cycle would be possible. But that is not the case.

(The Oxford English Dictionary is cited in the Protocol as being the reference for all words that are not defined Terms - which overrides any other intended, colloquial, legal or sailing meaning.)

To some it is a fine point, but it is a definitive one - whether any team takes the issue to the Arbitration Panel is another matter. Luna Rossa's view is correct.

Remember the 1988 New York Supreme Court Decision hung around the meaning of the word 'match', and the 2010 Decision from the same body on the meaning of 'having'. Is 'amended' going to be the next?

Under the Deed of Gift, the 19th century document that governs the conduct of the 160year old competition, the first Challenging Club names the boat and dates of the Challenge. The Defender names the venue (almost always the waters of its Club), and the Rules (again almost always that of its Club).

It follows that the choice of boat, while altered from the initial Letter of Challenge under the Mutual Consent provisions of the Deed of Gift, cannot be changed midway through an America's Cup cycle, without the unanimous agreement of all competitors who have entered and paid their entry fee.

The new length-less one design Rule
America's Cup organisers have released a draft version of the new class rule, now termed the AC Class, than being delineated by an overall length as was done with the AC72, AC62 and AC45.

If used, the boat will be the smallest ever sailed in the America's Cup.

It has one-design hulls, beams and wingsail. The shapes are determined by an IGES file (a CAD data file) which is supplied with the Rule.

All that is required is for the hulls of the boat to be built in the country of origin of the team.

If media statements by fledgeling Team France are to be believed then a designer is no longer a requirement under the Protocol for the current America's Cup.

Skipper Franck Cammas told radio station Europe 1: 'We have some very good news: the Americans, Oracle, have decided to share their design and to collaborate with Team France.'

'So that lets us make up a lot of time and we'll be sure to have the best boat if we compete. That will let us make up a lot of time and give us a certain level of technical credibility.'

Given that the hull, cross-beam and wingsail must now be from a one design data file supplied to competitors, and given that the rest of the design will come from Oracle Team USA -in the Team France context a design team is largely superfluous and similarly for any other competitor who wants to go down the same path.

The other issue with the supplied one design, is that normally a single set of female moulds would be constructed and all one design hulls taken from that (which was in fact done by Oracle's Core Builders Composites with the AC45), however that is probably not possible with the new AC Class, and each team will have to construct their own moulds and then build. That process makes for duplicated effort and cost. Done properly, tooling accounts for 50% of the build cost.

Fluid Thinking re-visited
Throughout its history, design collaboration between teams has been banned, and strict nationality rules have applied to design team principals, as well as sailors. The door was opened a little in the 34th America's Cup when Team New Zealand sold their hull and platform design for their first AC72 to Luna Rossa, who modified that base platform.

The two team one designer approach was tried by the Australians for the 1995 America's Cup with Fluid Thinking - but was quickly ruled illegal.

In the 34th America's Cup cycle, the issue of collaboration was taken to the International Jury by Oracle Team USA. There, the US team with the support of Artemis Racing, were able to constrain the information exchange between the Italians and Kiwis.

But under sweeping changes made in the Protocol negotiated between Oracle Team USA and original Challenger of Record, Hamilton Island Yacht Club all rules on competitor collaboration were eliminated - opening the way for the very cosy Team France/OTUSA design arrangement.

Of course, this will be claimed as a way for the new teams to lower the technology hurdle and start-up cost. But Defender and Challenger collaboration is against the very spirit of the America's Cup, which is a challenge trophy. It also allows the two teams to share performance information, gives OTUSA a known benchmark in Challenger only competition, and other competitive advantage.

Remember too, the under the current Protocol, the Defender is allowed to build and sail two AC multihulls while the Challengers are limited to one.

The OTUSA/Team France arrangement gives the two teams the benefit of a two identical boat program - a massive design development tool and benefit.

Additionally there is no restriction on the number of boats that can be built - provided at least their underwater hull sections are from the AC45 one design mould.

Significant cost reductions ignored
While the latest changes to reduce the size of the AC yacht are claimed to be about reducing cost, the number of surrogate yachts that can be built are still unlimited, provided their underwater shape comes from the AC45 one design mould.

Remember that the length of the AC yacht is going to less than five feet longer than the AC45. In the previous edition of the Cup AC45's were permitted for the surrogates, but there were big issues of scale taking that technology from a 33fter or 45fter to the 72fter. There are minimal scalability issues now because the AC yacht size is so close to the surrogates.

Foil and wingsail restrictions are also a bad joke with the new AC class, for the same reason. While teams are allowed to build four full-foils or eight half-foils and two wingsails in the AC class, there are no such restrictions on the unlimited surrogate fleet. Foils are not cheap. Neither are wingsails.

Claims of the new moves on downsizing the class as being a cost-cutting measure have a very hollow ring to them, when it is realised that the cost of the boat is about 15% of the total campaign.

The sacred cow of salaries and team size is not addressed - even though people costs make up about 50-60% of an America's Cup budget.

The claims by ACEA of the desire to cut costs have an even less credibility when it became known through the submission of Court papers that GGYC's team were signing grinders on a $300,000 a year salary package for a two-year period, plus an accommodation allowance of $4,000 per month.

Setting that height of the salary bar in the America's Cup professional sailing market ensures that the top teams get the top talent, and also ensures that new teams struggle to get established.

Several sports run salary cap mechanisms with severe penalties for a breach - often resulting in being eliminated from a competition for that year if caught wroughting the salary cap. Team budgets and expenditure are subject to audit by an independent body who then reports transgressions - as happened in Australia earlier this week.

The underlying concern with all that has transpired in the past two weeks is way in which a simple majority of teams can change (not just amend) the rules of the America's Cup to the significant disadvantage of the minority.

Such is the tyranny of democracy.