Volvo Ocean Race -Count down at 12 months-interview with Knut Frostad
by David Schmidt and Rob Kothe on 28 Oct 2013
Volvo Ocean Race 2014/15 Team SCA depart Southampton for their training base in Lanzarote
Photo: Rick Tomlinson/SCA Rick Tomlinson/Volvo Ocean Race
http://www.volvooceanrace.com
In late 2007, legendary Norwegian sailor and four-time Volvo Ocean Race (VOR) participant Knut Frostad took over as the race’s CEO. In the nearly six years since Frostad has been at the helm, the event has enjoyed two successful and engaging editions, 2008-2009 and 2012-2013, but it is now in the process of a significant transformation.
As a way to try to reduce campaign costs, lower the barrier to entry for first-time teams and to also help level the playing field for all comers, the next two editions (2014-2015 and 2017-2018) of this fully crewed, around-the-world stage race will be determined using the new Volvo Ocean 65 One Design platform, rather than the open-rule designs that have defined past generations of VOR raceboats.
Now, with just shy of a full year left to go before the starting guns of the 2014-2015 race commence firing, Sail-World caught up with Frostad to get his thoughts on the new One Design boats, the race’s cost-savings measures, and about the role that media will play in the next edition of this storied ocean race.
You’ve got the countdown clock until the start of the 2014-2015 race when you walk out of your office and look out to the operations centre. You haven’t got it online so you are applying the pressure internally.
Yes, I am. The pressure is always there. What is quite different from the old days is that we start the next race whilst we are in the middle of the previous one, so we started negotiating all the ports in January [2013] so the clock starts ticking [right away]. Obviously for us one year seems like a lot but it is nothing. It is great to have a shorter [race cycles], in the old days it was [every] four years between each start, and now it’s three. I think it’s very good that we have a shorter cycle because it keeps the momentum and people don’t really forget the event. When it [was a] four year cycle, it [was] hard to keep people enthusiastic, [but the short race cycles are] putting pressure on us obviously.
We record media-impression stats and you can see the style of reporting or the style of content has quite a significant impact. The VOR has always traditionally done well and it’s getting stronger. This last America’s Cup set a lot of new benchmarks. At the moment this is about the teams that are committing. You’ve currently got three teams. What are you prepared to tell us about other likely teams?
I’m not prepared to tell you who they are because that’s the way we work: The company shelters our teams. Our strategy and tactics for the teams is that we’re doing more than we’re saying and not promising the world-[that] we’re going to have an enormous number of teams-and afterwards having to defend whatever we promised. It’s a difficult market. There is no secret that it’s a difficult economy [and that it’s hard] to turn around sponsorship in sailing in general, [but] what I can tell you is that we’re [currently] working actively with 11 teams, not including the three that we believe are serious.
[These teams] work with us very closely. Some of them are variant, some are very close to announcing and some of that have just secured one part of their funding, which could be a third or more. It means that all these teams can happen, but it doesn’t mean that they will happen. If you have fifty-percent of your budget, you’re not on the start line. We’re different to the past. We work extremely close with the teams. We are in daily contact with them. We attend the meetings. We’re in the pitches with the sponsors. We’re in discussions with the sponsors. Sometimes it’s even a discussion with only us and the sponsors and they select a team afterwards. So that’s where we are and we hope to announce more teams as soon as possible.
We still have time left, which is the good thing with the One Design project. It buys you a lot more flexibility for when you get the entries… I think we are up to over 160 different groups who have come to us that have said they want to do the race, but we don’t advertise that because [for] most of them it’s not realistic.
Is €15 million a realistic number for a campaign budget?
The teams that we work with have budgets ranging from €10 million and €15 million, including buying the boat.
That’s down very substantially from previously?
In the last race, if you don’t include Team Sanya, which was a late entry with a second-hand boat, all the teams where in between €20 and €35 million.
This has got to be an easier sell, right?
It’s definitely an easier sell, and it’s much [closer to] where we want it to be. At the same time, the market is much tougher. In many cases, companies are careful today. They are scrutinising what they get presented [with] much more carefully. [Prospective teams] have to present a much better business case. It’s more competed market. There are still sponsors out there, but I think sometimes it’s easy to say that if you [can get] half the budget, it’s going to be twice as easy [to get the second half], but the reality is that selling a €1 million sponsorship is as hard as selling a €5 million sponsorship because you have to go through the same process. The biggest difference is when you’ve used your budget, you have the ability to go to more companies so more companies can afford to participate in the event, which is what we wanted. If your budget is too high, there [are] only certain levels of companies that can [afford] it, but still it’s absolutely a tough market so we’re under no illusion. It’s not easy.
The euro has gotten stronger, which makes it harder, no?
Yes and no. It has got slightly stronger but it still much weaker than it was last time. [Also,] not all the costs of this project is [are] in euros. We have chosen the euro as a currency [for our communications] and [the one] that we work with the teams [with] because most of the teams have some European element. Some of the costs are in other currencies. Some are in USA Dollars, some in pounds, and some in Chinese [Yuan].
We’re very impressed with the boatyard concept for making in-port repairs. Are all currently entered teams all planning to use them?
They don’t really have a choice-they have to use it. It’s not a voluntary program. It’s really part of becoming an entrant. What we don’t limit, we don’t say that [a] team can’t employ two or three more boat builders; that can be their choice but they don’t really have to. They have to join the boatyard. That is absolutely part of the event.
How did the boatyard concept come into being?
It came to be very early. When we looked at the event a few years back, we realised we were in trouble with the strategy and the setup we had because the old way of doing things [with] an open class, huge teams, big budgets and big support teams wasn’t going to work in the future, and I don’t even think that it’s just about the [economic] crisis that has hit Europe and the rest of the world. It’s really that this will never come back. Sailing will have to change forever to be more sustainable, so we looked at what are the elements of the whole race [and how] we can be more efficient.
It wasn’t necessarily the [new] One Design boat that was driving the boatyard concept. It was almost the other way because we looked at how to be more efficient with people, [how we could] have smaller teams, and you realise that if you want to [realize these goals], your boats have to be the same. If every single boat has a different mast, if every single boat has a different structure and mechanics and sails, you cannot get efficiency into people. It only really works when you can have one supplier serving a whole fleet. Instead of having eight spare masts you have three or four spare masts and you share that cost instead of paying for the rig. It made a lot of sense for us.
There are two parts to the boatyard. There is one part, which is called the pooled spare parts. [That’s] a very obvious one that everyone can understand and buy into because it basically means that you have to pay less for the spare parts, and you only really pay for spare parts when you use them. Before, every team had to stock up with everything that they could potentially break in an around-the-world race. On top of that, we realised when we did the One Design project [that] it gave us a really good negotiation position with all the suppliers in the whole industry because we could not only ask for better prices, [but we could also ask them to] supply the service. Quite a few of the [old Volvo Open 70] suppliers that are [also] suppling the Volvo Ocean 65 boats agreed to even stock up spare parts for free. [Now], if they use [a spare part] they pay for it, but if they don’t need it, they don’t have to spend their cash flow and their budget on it.
Now, for example, if we [have] three rigs, we could have one rig in each shipping set, plus we can have one [at] the airport, [ready] for any boat that had a rig problem. We are better covered.
The other part [to the boatyard concept] was then to look into the actual work on the boats and how to reduce that as much as possible. In the past, the teams didn’t know what was going to happen to the boats [during the race, so] they would all have to assume worst-case scenario and bring a pretty big shore team. The shore teams in the last race varied from 11 people on the smallest to up to 30 people on the biggest team. If there was nothing wrong with the boat, most of these people have nothing to do, or they [were] building the [team’s] shore base and then dismantling it again. The first step is obviously to have a good boat that doesn’t break, and we have made a lot of effort. The new boat is going to be stronger and [we expect it to] have significantly [fewer] problems [as it races] around the world.
[The other consideration was to see] how we could be more efficient in servicing the boats by having one guy looking after all the hydraulic systems on the keel instead of different guys doing that small specific job [on each team] and having to be flown in. We have basically [reduced] the total [team staff] needs significantly. I think we’re down to 45 people in the boatyard now, which is going to service the whole fleet. Then, you share the transport costs and you share the logistic cost, which gets lower, and you share travelling accommodation for these people and on top of that you can make one huge base. The boatyard is going to be one huge construction in the village. We are going to open it to the public so [they] can get behind the scenes and see how the boats are worked on. The only real challenge we met with this [concept] was [that] people were arguing [about] who was going to have their boat serviced first. We solved very easily by introducing that no one can go [practice sailing at each stopover] before everyone is in the water. Now it is in everyone’s interest that [all boats are] completed as quickly as possible. It is going to be interesting. I think it is a big game changer for us, and for sailing in general. I think it is something that is healthy, and when you speak to sponsors about it they nod because this is how they run their companies.
What else would you like to tell us about Team SCA, Abu Dhabi Ocean Racing and Team Donfeng?
They are obviously different campaigns. Team SCA is a female campaign, [and it’s] a great comeback to have a female team in the race. I think [it’s] extremely important for the race...[and for] sailing as a whole. There’s a tendency that all the Grand Prix, top-tier [sailing] events are heavily promoted only as a male sport, and I think we lose out a massive audience.
I think that sailing has a much bigger female audience than many other sports do. There are a lot of women sailing. There are a lot of women participating in cruising and family racing and sailing and on the ground level there are a lot of girls and women sailing.
{Team SCA] is a very important campaign. It’s probably the most ambitious female sailing project [that] I’ve ever known, and that goes back to the America’s Cup in San Diego. I think it’s the most ambitious female sailing project ever because the [people] behind it. They’re the same guys who managed the Ericsson campaign, the EF campaign. They have a lot of experience. They only work with the best people and now they want to do the best possible project [that] they’ve ever done with the girls and [really] give them an opportunity to win the race.
The interesting thing is that-partly because of the economy and partly because of the male teams knowing that they can start later-the girls actually are getting a big head start. They’re training for a year more than the guys. They have the best coaches. They have a training boat. They have a fantastic training program. I’m super excited because I think it’s going to be a big surprise for everyone watching this event to see how well they will do. I’ve just [been] watching them and [I’ve seen] what they do in their training, how fit they are and how serious they are about [their] preparation. It’s second to none.
Abu Dhabi is coming back from the previous race, which was [their] first [VOR]. They are ambitious in this event, [and] they are a long-term partner of the event. They want to build sailing in their country. They started with almost nothing apart from the dhow racing, which is very popular in Abu Dhabi, and now they have a sailing training facility and [kids racing] Optimists. The team is going to make another step up from the previous [edition of the race]. I think it’s going to be a strong team. [Skipper] Ian Walker is definitely not doing this for the third time without any other ambition than winning it. It’s going to be a strong team. I think they will be a tough team to beat.
What about the Chinese-flagged entrant, Team Dongfeng?
The Chinese team is our newest addition. It’s an interesting one. It’s the third time we have had a Chinese element in the race, [but] it’s the first time we have what I would consider as a proper Chinese project because this time the ambition is to have a significant part [be] Chinese [nationals] and they are starting early. They are starting training in December, so only a few weeks from now. They also have a very good management team in Mark Turner. He knows his sport, [and the management team] guys have done many successful projects from Ellen MacArthur, to the Artemis Offshore Academy to the Extreme Sailing Series. [Turner] was also involved in starting up Oman Sail. It became a big success. I’m excited because I think we have an opportunity, [given] the long training time that they have, as they essentially have another year to the start. Last time we had Chinese sailors involved, it was always a project that was very last-minute and they only had one or two months to prepare and then it is very limited how many [stars] you can get on board.
I know [that Team Dongfeng is] very ambitious. They have a big plan of recruiting a lot of sailors to go through a kind of academy structure that’s going to run from now in December all the way to the start, and they’re talking about 40 sailors [participating] and then they will pick the best [of that lot]. I think the rest of that [team] it is not announced and [not] selected yet, but they are obviously working on that. Knowing Mark Turner well, he isn’t going to go for any less competitive than all the top teams. The non-Chinese part of the boat will be very competitive and experienced. It will be very interesting to see how far they get.
We have been speaking to the America’s Cup lot and they are talking about a One Design wing mast for the next Defense. They want to have wing masts but they want to reduce their development costs. That’s a lot like what you guys have done.
Yes, but also because [if] you go One Design, you can do a lot of very smart things. You can increase the safety margins. There is no need to [equipment that] keeps breaking and has too small tolerances. You can increase the safety margins. You can build it much more cost efficiently. You can design the mast and think ‘how do we make it efficient [to build]’ because some of the custom products they [built] in previous Volvo Ocean Races and also in the America’s Cup are so complex to build [that] they take away necessary time for very, very small gain. Then you add insurance, which has benefit. There are all kinds of benefits.
With the One Design program, teams can get started later than with the open-class designs. How much later can they realistically get started?
If you look at the big picture, I think we’ve extended the period [by] one full year. If you wanted to build a boat for the next race, which you really have to do to be competitive, you would have to start in April/May this year. It takes a couple of months to design the boat, and it takes 6-7 boats to build [the new class,] minimum. [In the last race,] some boats [took] 8-9 months [to build, so] you [needed] to start almost a year before to have the boat ready. Now, providing we still have a boat left and in construction in March/April, [a team could] still [become active] in March/April in the race year and then join.
You originally talked about putting a boat out every seven to eight weeks. Is that still happening?
Yes, that’s still happening. Two boats are completed and the third boat [will be] completed this week. Then the fourth boat is on schedule for the end of December.
So seven boats in the first build?
The seventh boat is the last boat that has started construction.
The real question is for you is when does it become impossible to add an eighth boat?
January, I’d say. What drives it is how late is the sponsor [is] willing to be. Obviously, you start to eat into the preparation time [with a late start]. If you start in January, you can still have a boat [by] the end of June, which gives you sufficient time to do the event. If you get the boat [at] the end of July, then you’re looking at two months of preparation. I think that’s possible if you have a super experienced team like [Emirates] Team New Zealand or someone who knows exactly how to do things very quickly [and is highly experienced] can jump in and do a very good job, like Franck Cammas and his guys. They are looking at an option like that.
That’s the challenge that we have. It is very complex to build that many boats in time, as we are doing. We would have loved to have been able to build ten [or] twelve, but it is what it is.
Have you sailed on the SCA boat?
No, I haven’t. I have been travelling nonstop since the launch. I must admit that I still have that one to go, but I’m hoping to get on the water very soon.
Have the sailors been impressed with the new boat?
The feedback we’re getting is very positive both from the VOR sailors who have had experience, and also [from] the girls. So far, it’s living up to our plans and expectations.
The Notice Of Race doesn’t talk about shipping the fleet to avoid areas of piracy, as we saw in the last race. Has that been dropped as a possibility?
We have a contingency plan or a crisis management plan for any eventuality of things that happen in the race, and that can be piracy [or] other things as well. It can be boats having all kinds of problems and shipping is always going to be a scenario. With that said, we monitor piracy in [every] ocean every month with our advisors.
Currently, we are not planning on shipping at all like we did in the last race. We are planning on sailing the whole way. We want to avoid shipping as much as possible. That was the scenario we had to go [with] last time because of the advice we were getting, but, currently, the scenario has changed and piracy risk factor [is] significantly lower now, [but] we need to know when we get closer to the event because it can change again.
The area near Abu Dhabi seems like problem.
The problem starts in Somali and then it lines sort of east. We had a scenario in the last race where the military resources [were] patrolling the Gulf of Eden very well and the pirates then went further east and that became a problem for us. Now, naval forces in the Indian Ocean have [gotten] a very good grip on the piracy in the last six months. [There have been] very few reported incidents, and the incidents [that have occurred] have been much closer to Somalia again. This is a picture that [constantly] changes. [Piracy and other problems] pop up in different places around the world. Sometimes it’s piracy, sometimes it can be terrorism like we had in India when we stopped there in 2008. [Or,] it can be political problems, military problems, ice burgs, you name it. All around the world.
Ice burgs are the next question. Given the reality of global warning, how far are the growlers coming now?
It’s difficult to say. We have a lot of advisors on this, and we get better and better information than what we had in the old days. We have a system of satellites images that can detect medium size ice burgs, and some people [portend] that global warming is causing more ice to break off, [while] some people are saying that isn’t the case. In the last race we didn’t have a lot of ice burgs reported. We had some ice and we put some waypoints [so] the sailors avoid [ice burgs] as much as possible. The [icegates that] we [used] in the last race where actually further south than [in] the race before. Also further south than other [around-the-world] events have [used]. It’s changing month-by-month, year-by-year. We have to look at it in one year from now.
You can change that mid leg even?
We don’t announce our ice limitations if we have any. We don’t announce them until the stopover until they sail into the southern ocean. We want to have the latest accurate information and then we add lines, which they have to stay north of, and then we add them at the most southern point we feel comfortable with.
A few races ago you wondered why a company like Volvo would want to be involved with a race that risks a possible ice collision.
One of the last races I did, in 2001-2002, we had an enormous [amount of ice burgs on the course] and we sailed slalom between them. We had no limit in those days so [this is] a new thing. At the same time, the organisers also had a lot less information so they didn’t really know what we could have expected.
The 34th America’s Cup certainly brought the on-board audience to people’s screens. Do you have any plans for on-board audio for the in-port races?
Absolutely. We had on-board audio for the last race when we did the live in port races and we have a better microphone system now. I hope [audio] is going to be one of the biggest improvements in the next race. One of the challenges [that] we’ve had is that it is one thing to do audio off [a boat that’s racing in] an in-port race, but to do audio offshore is extremely complex because [it’s hard to protect] our microphones, and, [in the last race,] we had to retrofit the media equipment on boats that we had not designed [ourselves].
We have really designed [the new] boat around the media equipment, so a lot of the media equipment has really good [waterproof] protection, and [we have] really good directional microphones in the cockpit, [which won’t suffer wind and water interference]. We already know from tests that [these new mics] pick up sound really well. On top of that, [during] the leg start and in the in port races we will have several of the crew on-board mic’ed up, [for example] the helmsmen and the bowmen and a few others. We also did that in the last race, but the equipment is getting better.
And a lot more reliable.
A lot more [reliable]. Some of the challenges for the sailors in the past [was that it’s] not easy to write an email or text a blog because you’re under a massive [amount] of water and you are holding a rope with one hand and then someone wants you to send a twitter message. It’s not that easy. You have to make it extremely practical and functional.
During the Sydney to Hobart Race, we monitor the VHF as you can get an awful lot of information that helps with the coverage. You use a delay in the fleet’s position reporting, no?
It wasn’t a delay. The position report [wasn’t] live the whole time. We had three-hour reports, and the position [information] was communicated immediately. There is a small delay of 10 to 15 minutes because sometimes boats don’t report because they [are in big waves and the report signal gets lost], so we have to wait and calibrate the reports so they get them at the exactly the same time.
We went [with] live [position reports] in the last race [during] some of the last legs and we also go live in the last six, eight, 12 and 24 hours of each leg and also at the beginning, which we intend to continue to do.
Can you tell us about the On Board Reporter program?
That’s very exciting. I think we [had] 1500 [applicants], [but that’s] now a smaller group. Some are very experience journalists, some of them have sailing background, some of them have [no sailing background] and that’s now the challenge-to get them on board a boat. Some of them have been out trialling already. Some of them have sailed with Abu Dhabi and [Team] SCA already on the training boats. Hopefully one of the biggest changes [with the On Board Reporter program] is to get more and better journalistic skills on board a boat, to report a story more than just filming it.
We are looking forward to that. Is there anything else that you’d like to tell us about the next VOR?
That we are excited! The new boat is going to change the event a lot, and there’s no [more poor-design] excuses. Now this is really down to the sailors and the decisions [they]make and how they work together as a group of people. I think we will see a big change in the way we broadcast the race and the content, which is going to be a lot more people-focused than before. It’s now going to be more of a race about people and not between boats. It tends to be between boats not only because it is communicated that way, but [that’s] the way it’s always been. We want to make this into a race between people and we think that’s what the audience is really interested in. That’s going to be exciting. We have some new features coming up that we’re going to transmit from the boat that I can’t tell you [about] yet, which is going to bring [the spectator experience] to another level.
Tom Slingsby-the strategist on Oracle Team USA-was saying that nobody was broadcasting the sailor’s heart rates. He said it was a whole dimension of stress the sailors were under that people didn’t know about. I’m sure you’ve heard a lot more from those boats in terms of human dynamics that you’ve shared in previous editions.
The best sound byte from Americas Cup was [from Emirates] Team New Zealand; the grinder starting gasping for air and you heard the screams and yells. It was fantastic! We are definitely going in that direction. Some of that is tricky to do when you’re offshore because you don’t have the same technology or wireless network. The new VOR65 is completely wireless on deck, which is also a new feature. All the devices, whether [they’re] cameras or iPads or microphones, are wireless so [the On Board Reporter and the sailors have] a lot more flexibility now.
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