America's Cup- Significant changes made to Protocol, but issues remain

by Richard Gladwell, Sail-World.com/nz on 18 Nov 2014 Significant changes have been made to the Protocol to the America’s Cup.

The effect of the moves is to straighten out some of the issues surrounding the proposed conduct of the 35th America’s Cup.

Other issues still remain unresolved.

Challengers will welcome the easing of the requirements on Entry Fees.

Instead of there being a payment of $1million upon acceptance of entry by the Defending Club, Golden Gate Yacht Club.

A second payment of $1million was due on December 1, 2014.

That has now been reduced to just $100,000, with the third payment of Entry Fee of $900,000 now required on May 1, 2015.

Lodgment of the Performance Bond of $1million has also been deferred to May 1, 2015. Previously it too, was required by December 1, 2014. the Performance Bond is not required to be cash, but can be documents or securities which can be drawn down on demand if a Challenger fails to met its obligations to complete in the event.

The effect of the delay is to reduce the financial pressure on the commercially based Challengers. The Entry Fee is paid directly into the Regatta Officials Fund, which is then used to pay the expenses of running the sailing side of the regatta. The payments are non-refundable.

A requirement for the Commercial Director to publish the venues and dates for the first round of six America’s Cup World Series events has not been changed.

The dates and venues for the regattas to be held in 2015, were supposed to be announced on November1, 2014. No announcement was made other than Bermuda would be one of the ACWS venues.

That was not a surprise, given it had previously been stated that the final two venues for the America’s Cup Match would be allocated an America’s Cup World Series event.

However that leaves five of the six events to be confirmed.

Expected to be announced were Portsmouth, England and Cagliari, Italy as venues for 2015, but nothing has been publicly confirmed.

Auckland is touted as an ACWS venue, however that is dependent on Emirates Team New Zealand confirming their entry in the America’s Cup. That won’t happen until after the Match Venue is confirmed, with the significant sponsors expected to confirm their involvement once the Venue is announced.

Various dates for the confirmation of the Match Venue have been touted, with dates of the end of September, then end of October, then early November. Cup cynics now expect the announcement to be quite late – even right down to the deadline of December 31, 2014.

Other missed dates include the publication of the Rules for the regatta, due on November 1, 2014.

The Regatta Director is yet to be announced. That appointment is subject to the approval of the majority of the Challengers and the Defender.

The delay in that appointment, has spin-offs into other areas.

The Regatta Director has to sort out the 35th America’s Cup’s relationship with the International Sailing Federation, given that the Protocol signed by the Golden Gate Yacht Club, and the now departed Challenger of Record, called for the abandonment of the International Jury, and replacing that body with an Arbitration Panel headed by a member of the Court of Arbitration for Sport. Every other major international regatta in the world runs under a Jury appointed or approved by the world body. The practice is enshrined in the ISAF’s Regulations.

Somehow the yet to be appointed Regatta Director has persuade the ISAF to create an exception for the America’s Cup. Alternatively ISAF will call the America’s Cup organisers to heel.

Lurking in the background is the issue of the hearing by the Court of Arbitration of Sport into the penalty sought to be imposed by the ISAF against one of the members of Oracle Team USA in the 34th America’s Cup.

There is not a lot of love lost between the world sailing body and the America’s Cup Defender. The announcement of the CAS decision is expected around the end of the year. Two other Oracle Team USA shore crew members are believed to be still in the ISAF judicial process. Action on their cases is on hold until the CAS decision is announced.

The specification of the Arbitration Panel is widely seen as the Defender cocking a snoot at the world body. Whether that attitude can be sustained remains to be seen.

Still in the Protocol is the concept of the America’s Cup Qualifiers being held in a different venue from the Match itself, and separated by four months in time. With five Challengers, one will be eliminated without making the America’s Cup venue.

The most notable change in the Protocol is the handling of the 'departure' of the initial Challenger of Record, Hamilton Island Yacht Club.

One Article of the Protocol says HIYC is the Challenger, a couple of paragraphs further down it says the Australian club has resigned, and then starts the process for them not to be replaced by another Club, but by a Committee.

The withdrawal of the original Challenger Hamilton Island Yacht Club was handled in an orderly way under the first version of the Protocol, where it provided for the mantle of Challenger of Record to be passed to the next Challenger in order of receipt of their Challenge.

That responsibility should have gone to Circolo della Vela Sicilia,(CVS) the yacht club of Luna Rossa the four time Italian Challenger. But the club is not mentioned in this role in the second version of the Protocol.

Under the 19th century Deed of Gift that governs the America's Cup it is a Challenge Trophy between yacht clubs, not a Defending yacht club and a Committee of Challengers.

The concept of a Challenger of Record Committee is not new. It was used in the 1992 and 1995 America’s Cups and worked well for the Challengers. But significantly the Protocol for the 1992 event said that the Defender, the San Diego Yacht Club would accept Challenges within 60 days of the end of the 1988 Match and within a further 30 days the Challengers had to elect a Club as Challenger of Record.

With the CORC concept, the Challengers appoint their own administrators, and the overhead is removed from the club that is the titular Challenger of Record.

Under the Mutual Consent provisions of the Deed of Gift, two Clubs - the Challenger and Defender - can make whatever arrangements they like for the Match, provided they stay within the ambit of the Deed of Gift. Generally that is to create a Protocol which will allow other clubs into a Challenger series and the winner of that regatta goes on to meet the Defender in the Match.

But now there is one Club and a Committee. It could be argued that arrangement is not strictly in compliance with the Deed of Gift. While the point may seem to be very fine, the 1988-1991 Court Case revolved around the meaning of the word 'Match', and the 2007-2010 legal saga was primarily over the meaning of the work 'having'.

Whether anything gets off the ground legally on this issue or any other, is another matter.

There is no International Jury or Arbitration Panel to hear the issue, simply because none have been appointed let alone empanelled.

The five Challenging teams and Defender are expected to run two foiling AC45’s – about 15 were built in the last Cup cycle , and acquisition of used boats are a good option for some teams.

The next announcement is expected to be further venues for the America’s Cup World Series, and the Match Venue. Some of the teams are sailing foiling AC45’s or converting 2013 vintage boats to foiling versions, which will be used in the America’s Cup World Series.