America's Cup- Team NZ protested for non-compliance by Cup organisers

by Richard Gladwell on 18 Jul 2011
Twice winner of the America's Cup and the world's most successful professional sailing team, Emirates Team NZ Emirates confirmed today that it is seeking mediation in its dispute with the America’s Cup Event Authority (ACEA) over rules that restrict the team’s internet presence.

The team has been protested by the America's Cup Event Authority for not complying with the requirement of the Protocol governing the 34th America's Cup requiring it to divert its website address to a team section of the America's Cup website. Emirates Team New Zealand have proposed that the issue be resolved by mediation rather than a full Hearing of the International Jury.

Under the Protocol signed between Golden Gate Yacht Club and the original Challenger of Record, Club Nautico di Roma (since replaced by Royal Swedish Yacht Club KSSS), Challengers are forbidden from having an independent America’s Cup presence on the internet. All America’s Cup content generated by individual teams is contained within the 34th America’s Cup web site. Additionally, after 1 July 2011, the teams' existing websites have to be switched to the America's Cup address.

While that transparent switch requirement may seem innocuous, the effect is that the well established team sites in turn drive their fans and traffic to both other newer teams and the America's Cup itself. The reality of that statement is that only three of the current nine teams (Oracle Racing, Team China and Emirates Team NZ) have previously competed in an America's Cup. Being start-ups, the other teams have little real traffic to drive to the America's Cup site - with the exception of Artemis Racing which runs its own site and has competed in on the Audi MedCup circuit and Extreme 40's and RC44's.

Two of the key players in past America's Cups, Team Alinghi and Luna Rossa with their fan bases, similar to Emirates Team NZ, have elected to to be part of the current America's Cup.

In a media release issued today, Emirates Team New Zealand says that 'ACEA is seeking to prohibit teams from altering page templates, which control the look, feel and personality of the space allocated to them, without ACEA approval and without incurring costs.'

While this would not affect new teams, with a single focus on the America's Cup, the non-negotiable Protocol (except between the Challenger of Record and Defender) requires that teams have their sole internet presence on the ACEA site. The first clause of the relevant section says: 'by 1 July 2011, Competitors that have existing domain names shall redirect all online traffic to www.americascup.com.'

For a multi-faceted team such as Emirates Team NZ, this would mean, for instance, that all its Volvo Race coverage (which also runs under the www.emiratesteamnz.com) address would have to be hosted on the America's Cup website as both events, for the New Zealand team are located on www.emiratesteamnz.com. Similarly with the team's Extreme 40 coverage, a rival event to the America's Cup World Series.

Around the Mulberry Bush?
In the next clause the Protocol effectively creates an online nonsense: 51.2. Article 51.1 does not apply to content that is not linked in any way to the America’s Cup in relation to other (permitted non America’s Cup) events.

Which begs the question that if a team has re-directed its website to www.americascup.com how is it going to to get news, images, video, sponsors and audio out to their fanbase without a website, which by definition needs a domain name to be accessed, and then the same domain name has already been assigned to the official America's Cup website?

In other words, it's a game of running around the virtual mulberry bush.

The Defender and Challenger of Record are both funded by billionaires, and are largely immune from the need to chase early sponsorship to provide the initial funding necessary for early design and development, necessary to mount a winning campaign, a couple of years down the track.

Professional teams which do rely heavily on sponsorship for their funding, need to be able to offer benefits to a commercial sponsor - one of those benefits is getting their logo and company involvement in the campaign on the team website.

Currently there is no space at all on americascup.com for team sponsors - so despite having signed sponsorship deals to back the teams - they are unable to give those sponsors recognition on their team site. However under the normal situation of individually owned websites, sponsor association is a significant part of any team site.

Further many sponsors feel uncomfortable with sharing the same webspace as their competitors, which may be involved with other teams.

Take the Dell sponsorship of Emirates Team New Zealand for example.

A fan goes to the americascup.com website to check on the latest news from Emirates Team New Zealand. Who do they see on top of the Teams section of the website? Dell's rival Oracle - sponsors of Oracle Racing - who have top of the site presence.

In all the multi-challenger America's Cups, since Teams had websites, there has been the ability to offer team sponsors separation from competitor sponsors - in cyberspace if not on the racecourse.

In the press release, Team managing director Grant Dalton says that one effect of single site is to stifle the ability of commercially funded teams to raise sponsorship, and that affects all commercial teams.

'I would have thought an ACEA objective should be to help teams secure sponsorship, not hinder them.'

He said: 'For example we are an established team which has been in continuous operation since the 1987 America’s Cup challenge at Perth. We have a campaign for the Volvo Ocean Race and we are competing in the Extreme Sailing Series. We need to be able to project ourselves to the public as we see fit, not controlled from within someone else’s web site.'

Dalton said the event authority, by controlling all America’s Cup internet traffic, was promoting the event at the expense of the teams, without which there would be no event.

'People follow teams, not events.... people are not fans of the Rugby World Cup soon to be held in New Zealand, they support the teams within the Rugby World Cup.'

Shift into Social Media
As mentioned, Emirates Team NZ recently announced a technology partnership with US multi-national Dell.

Part of the strategy adopted by the team has been to move into the social media such as Facebook, Twitter and YouTube which are expressly excluded under the current version of the Protocol.

The other longer term issue, is that if the team complied with the requirements of the Protocol, and effectively shut down its current web presence, then after the 2013 America's Cup the team, they have nothing.

Emirates Team NZ, which has been in existence for now eight America's Cup campaigns has its web fortunes tied into the 34th America's Cup site. Post 2013 it would have to make a significant re-investment to break free and establish a new web presence which would support a multi sailing event professional sailing team. Currently that presence just rolls from event to event, and is brand that has a lot of value to current and potential sponsors.

While the New Zealand has said it is seeking mediation, it is not known how that mediation process is conducted.

Meanwhile the team continues to cock a snoot at the provisions of the Protocol, and has not switched its web address over to americascup.com. Further it is continuing to run news and image about the team's activities including the America's Cup, Volvo Ocean Race and Extreme 40's.

It is also running its own Facebook site, featuring the same events.

Along with the Dell sponsorship, vital for the design and performance development, Emirates Team NZ announced that they have partnered with US technology company http://rd2inc.com/about!RD2inc.com to develop their social networking presence. http://blog.rd2inc.com/archives/2011/07/15/new-zealand-team-new-zealand!Click_here to see the Emirates Team NZ comment by RD2inc

The real difficulty occurs if all major events required the same assignment of a professional sailing teams to their event site as a condition of entry. In other words a team like Emirates Team NZ or Groupama which compete in multiple events could be required to redirect their URL to that of the Volvo Ocean race, America's Cup or Extreme Sailing as a condition of entry into those events. Such a requirement would be a major constraint on the professional teams to be able to enter multiple major events - as their web address cannot be assigned to serve two masters.

Unfortunately there is no work around to the Protocol, by way of registering multiple web site addresses.

The text of the Protocol covering the operation of websites is as follows:

51. WEBSITES AND WIRELESS COMMUNICATIONS
51.1. By 1 July 2011, Competitors shall use the domain www.americascup.com as their sole online presence. By 1 June 2011, the Event Authority will provide Competitors with as much space as they reasonably require within the website for exclusive use and control of all their content. Furthermore, by 1 July 2011, Competitors that have existing domain names shall redirect all online traffic to www.americascup.com.

For the purposes of this Article 51.1 'online presence' means an internet website, but does not include social media such as Facebook, Twitter, Flickr, YouTube and such other social media as may be advised by the Event Authority from time to time.

The intent of this Article is to substantially grow the online audience for the benefit of the Competitors and the Event.

51.2. Article 51.1 does not apply to content that is not linked in any way to the America’s Cup in relation to other (permitted non America’s Cup) events.

51.3. Competitors shall not broadcast to the general public or enter into any arrangement to supply, by any means including but not limited to mobile telephones, PDA’s, Internet or other means, any Event moving or still images or animations of racing during the Event or Event information. Competitors may supply race results.