America's Cup Billionaires

by Sail-World on 22 Aug 2000 Oracle Racing Buys AmericaOne Assets
By Rich Roberts

This is the new coldhearted reality of the America's Cup: if you don't
have a billionaire for ballast, forget it. You'll just get blown away.

So said Paul Cayard in explaining this week why he scuttled his personal
flagship, AmericaOne, and handed over the burgee of the St. Francis
Yacht Club for an uncertain lesser role with Larry Ellison's Oracle
Racing. The cost of victory in 2003 will be more than anyone has ever
spent trying to win the century and a half-old ewer.

"I think my title will be the campaign manager," Cayard said. "I'll be a
part of the sailing team. I don't think any of that is sorted out as to
what my role will be."

It won't be skipper. That job is conceded to Chris Dickson, who
succeeded Cayard as helmsman on Ellison's maxi Sayonara four years ago
when Cayard left to start his Cup campaign.

As the "bees" (as the billionaires have become known) emerged one by one
from their boardrooms last spring, it dawned on Cayard, as well as the
veteran campaigners from Japan and Spain, that they had just been priced
out of the America's Cup.

"It's a different game," Cayard said. "The formula that New York and
Dennis [Conner] and AmericaOne ran last time-try to get corporate
sponsorship, try to raise money from private donations, but not with a
billionaire stepping up for the whole chunk-the cap on that seems to be
around 30 or 40 million dollars. That's less than half of what you're
gonna need to be competitive."

And the sailors are loving it.

"I would say that last time a good crew member with a Cup or two of
experience made eighty to a hundred thousand U.S. dollars a year and
this next time may double that," Cayard said.

According to sources, Oracle is offering annual salaries of about
$160,000 compared to $200,000 and up from the other "bees."

Cayard, 41, has had it both ways in the America's Cup, scratching for
cash or swimming in lire with Il Moro di Venezia in 1992. There's less
stress this way.

"I'm not so much worrying about raising money," he said. "Actually, I'm
not worried about that at all."

Cayard and Oracle Racing's chief operating officer, Bill Erkelens, spoke
with a handful of sailing journalists on a 50-minute conference call.
Ellison was unavailable while traveling in Europe.

Other assignments announced:

Boat design-Bruce Farr, an Annapolis-based Kiwi who designed Sayonara,
owns the Whitbread/Volvo race but is 0-for-5 in his Cup quest.

Operations manager-Bob (Buddha) Billingham, from AmericaOne.

Sailing team manager-John Cutler of New Zealand, who also lives in the
U.S.; drove Dawn Riley's America True.

Sail design-Mickey Ickart from Team New Zealand.

Spar design-Steve Wilson of Southern Spars, Auckland.

Any tilt toward the land of the long white cloud is only a natural
progression from the Sayonara operation.

"We didn't go head-hunting in New Zealand outside of our close family of
Sayonara people," Erkelens said, referring to Farr, Ickart, Wilson and
sail trimmers Robbie Naismith and Mike Sanderson.

Cayard said that because of the new "bidding war" for talent, he had
trouble keeping some of his AmericaOne people with Oracle. Josh Belsky,
Curtis Blewett, Greg Prussia and strategist/backup helmsman Gavin Brady
are all headed elsewhere.

"It's just a function of the market," Cayard said. "There are four
billionaires out there, plus Team New Zealand, which I understand has
been able to find some creative sources of funding. We've had to compete
against Team New Zealand even for some of our AmericaOne guys."

Ellison would welcome any of AmericaOne's sponsors aboard to help. After
all, the creator of the world's leading supplier of software for
information management has only $13 billion, which leaves him tied for
12th with the DuPont family on the latest Forbes 400 list (Bill Gates
remains first with $85 billion).

"He has had a conference call with our major sponsors from the 2000
campaign-Ford, Hewlett-Packard, United Technologies, SCIAC
Telcordia-expressing his interest in having them contribute and not
holding all the exposure for himself and Oracle only," Cayard said.

Cayard's own tenure with Oracle seems vague.

"I've been offered an opportunity to stay here and be part of the team,"
he said. "It's Larry's team, first of all, and Dickson has had a long
relationship with Larry, so he's the incumbent skipper. Billy [Erkelens]
is the incumbent operational person but has been realistic about the
fact that some of us have been at this game for awhile. We'll just have
to wait and see how things go."

It's clear that Ellison's interest in long-distance ocean racing waned
about halfway through the killer 1998 Sydney-Hobart race, which Sayonara
won. But the America's Cup didn't turn him on until last May at the time
when Cayard was agonizing over the future of AmericaOne.

Ellison's interest was stirred, Erkelens said, by "the guys on Sayonara
talking about it three months ago. He found out that some of the Team
New Zealand people were considering leaving, which surprised him. He
thought it might be time to jump into the game."

The deal was struck July 28. Meanwhile, Ellison bought all the assets of
John Kolius' Aloha Racing, including the two photogenic "fish" boats.

"We picked up the Aloha Racing boats initially as insurance to the
AmericaOne deal not going forward," Erkelens said. "It was basically an
entire campaign in containers."

And now they're stuck with it all.

"We'll most likely keep those boats in San Francisco," Erkelens said.

Oracle Racing plans to move into AmericaOne's compound on Auckland's
Viaduct Basin in October and start two-boat testing with AmericaOne's
USA 49 and USA 61 on the Hauraki Gulf Nov. 1. Production on new boats is
scheduled to start in December of 2001, with launchings in April or May
before challenger trials start in October 2002.