Gladwell's Line- A change of direction needed in the America's Cup

by Richard Gladwell/Sail-World.com on 22 Jul 2014 Last weekend's withdrawal of the Challenger of Record from the 35th America's Cup was a delicate piece of timing.

If matters play out as expected then the Italian Challenger Luna Rossa is expected to be installed as the new Challenger of Record in early August. Ironically they were lined up to fulfill the same role for Emirates Team NZ, had they prevailed in San Francisco, last year.

Most observers were giving the America's Cup the eight-count, but now a fresh pair of legs and a clear head has stepped into the ring.

Under the Protocol, Hamilton Island Yacht Club was required to confirm that they would be an Entry in the 35th America's Cup, even though they had already made their Challenge in September 2013.

Their decision announced in the weekend was that they would not be making that Confirmation.

Hamilton Island is also required to give 90 days notice of its intention to withdraw as Challenger of Record, and presumably that has also been done.

The Protocol also provides for the outgoing Challenger of Record to stay in place as CoR, for the duration of that 90 day notice period.

So there is some order in the transition process, and the Protocol that has been negotiated stays in place for the time being at least.

The fun and games are expected to start after entries close on August 8.

At that point the regatta organizers, America's Cup Events Authority, the commercial and event management arm of defender Golden Gate Yacht Club have to announce the accepted Challenges.

A provision of the Protocol requires that there have to be at least three additional Challenges, beyond the initial Challenge (now withdrawn) from Hamilton Island YC.

Sail-World's view, confirmed by rules experts, is that only three new Challenges need to be received for the America's Cup to proceed beyond the close of Entries.

While the wording is a little ambiguous, the sailing logic is clear - that three Challengers are needed to constitute a Qualification Series for Challengers.

But with just three (or four) Challenger entries the points based system in an America's Cup World Series is going to be as dull as ditch-water - even if they are sailing two AC45's each.

Expect a change in the Protocol, bearing in mind that in the period covered by the last America's Cup, there were 20 versions of the Protocol published as changes were promulgated.

Come August 8, there are expected to be at least four Challenges for the America's Cup, three years out from the Regatta.

No love lost
The next in line, as Challenger of Record, is widely expected to be Italy's Luna Rossa, headed by Patrizio Bertelli. There is little love lost between the long time Italian Challenger and the America's Cup Events Authority.

The Italians twice hauled ACEA in front of the International Jury before the 34th America's Cup over commercial issues. They also took Oracle Team USA to task over a breach of the surveillance rules in Auckland, when an OTUSA tender stopped within 200 metres of the Italian AC72 as the Oracle crew took photographs. That exercise earned the Defender a five day suspension from sailing at the end of April 2013, just before the Artemis tragedy on May 6, which triggered a further two-week suspension on all teams.

Luna Rossa, as mentioned have a long history in the America's Cup. Their team Principal, Patrizio Bertelli has a very clear and direct manner. He is well aware, and very respectful of the traditions of the America's Cup.

Should Luna Rossa be installed as Challenger of Record, there will be some very tough talk.

The options are to negotiate a new Protocol, or live with the current version signed by Hamilton Island Yacht Club.

ACEA don't have a reputation for working closely with the Challenger group, who seem to be reasonably united in their views.

'Our way, or the Highway' seems to be their attitude. That is probably not a sound approach to take with Mr Bertelli.

There will have to be negotiation over the Protocol, which was changed significantly within a week of being issued.

As Challenger of Record, Luna Rossa, or more properly their club, have the Right of Veto over any changes to the Protocol. They are likely to have the support of the majority of the Competitor Forum, which also becomes constituted after the close of entries.

In short, the uncompromising attitude of ACEA will have to change.

Challengers on same page
The Competitors Meeting called by Hamilton Island YC confirmed several issues, the key one being that the Challengers want to have the Match sailed in San Francisco.

ACEA is not in a strong position negotiating with the two venues on their short-list knowing that the Challengers want to be somewhere else.

Neither are they in a strong position when maybe half or more, of the Challenger group are expected to pull out if Bermuda is named as the venue.

Then there is an issue with the International Sailing Federation, covering the role of the world body in the 35th America's Cup which seems to be linked to the fate of Oracle Team USA's wing sail trimmer Dirk de Ridder (NED) in AC34. De Ridder is still in the hands of the ISAF and Court for the Arbitration for Sport appeal process, following the AC45 boat tampering incidents covering four regattas in the America's Cup World Series.

That relationship and involvement has been kicked into touch for the time being, with the yet to be appointed Regatta Director being charged with dealing with the world body and negotiating an acceptable solution.

But the ISAF is not expected to ring changes its Regulations to suit the whim of ACEA. The ISAF President Carlo Croce (ITA) is believed to have the ear of Luna Rossa Principal Patrizio Bertelli.

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Changes required
The low Challenger numbers belie many of the comments made by ACEA and GGYC principals about the need to lift the Challenger numbers above the 34th edition of the premier regatta in world sailing. There won't be too much talk, for 2014-2017 at least, of having Atlantic and Pacific divisions for the America's Cup World Series.

As Team Principal, Larry Ellison could have could greatly have improved the current situation by making three statements at the final media conference, or shortly afterwards. His words would have carried great weight.

First, that the next Match would held on 2017.

Second, that the boat used would be similar in type to the AC72, but maybe a little smaller.

Third, that the venue would be the home waters of the GGYC, on San Francisco Bay.

That would have pumped a lot of certainty into the Cup, and enabled the commercially based teams to work from a much more solid platform.

In doing so Ellison would have followed practice of the New York Yacht Club, who in the post 1956 era would announce the terms on which which it would accept Challenges when the immediate Match had just been completed.

It is quite ridiculous to take 15 months to sort out a Regatta venue, having already staged one successful Defence on your home waters.

After the entries have closed, the Competitors as a group would do their cause a lot of good to confirm that the AC62 will be used as the boat for the 36th America's Cup - bringing some stability to the event and avoiding the throwaway boat - which is the lot of the AC72.

That declaration would also set up a second-hand market for AC62's going into the 36th Match, which could well be held in 2019.

A few other changes need to take place.

Firstly the second tranche of Entry Fees, along with the Performance Bond needs to be pushed further out on the timeline - so that it is better aligned with the income and cashflow of the commercial teams. At present, those teams have an unnecessarily steep financial mountain to climb.

There is provision in the Protocol for the teams to be levied for additional funds to pay for regatta costs if required.

Secondly the closing date for entries needs to be extended - not a big deal as late entries can be accepted, but at least allow teams the knowledge of when and where the regatta are going to be so they can have meaningful discussions with sponsors.

Of the four teams expected to challenge (and hopefully there will be more), three are established teams and the fourth competed as a team in the last America's Cup cycle. That is an indication of the degree of difficulty involved in structuring a team and a Challenge in what was supposed to be a lower cost Regatta.

Further if a team with all the Ben Ainslie Racing has going for it is struggling to get a Challenge up and running then what hope is there for others?

This America's Cup should have been the Dream Event. All the hard work and proof of concept stuff had been done in the previous cycle. The event captured the world's imagination. There were new teams from Australian and Britain - both top performers on the Olympic sailing stage.

Additionally the British bring the pulling power of Royal patronage, both to their Challenge and to the America's Cup generally. The Cup needs their sparkle and glamour.

The Australians as a team will be sorely missed. In the longer view, Hamilton Island YC's withdrawal as Challenger of Record, should prove to be to the benefit of the 35th America's Cup.

A strong, experienced Challenger of Record is required. Picking first-time Challengers for that role is doomed to fail. It is difficult enough trying to get a new team off the starting blocks - let alone sorting out the rules of the competition as well.

It should be an interesting few weeks.