America's Cup - Emirates Team NZ win 28 day sailing blackout- Updated

by Richard Gladwell, Sail-World.com on 3 Jan 2017 In a deal, apparently brokered by the anonymous Arbitration Panel, the Protocol for the 35th America's Cup has been modified to institute a 28 day blackout sailing period, beginning January 9, 2017.

The move follows a Hearing by the as yet unnamed Arbitration Panel for the 35th America's Cup, over the removal of the sailing of the America's Cup Qualifiers from New Zealand. The Decision by the Arbitration Panel has yet to be formally announced but has come down heavily on the side of Emirates Team New Zealand.

The change to the Protocol has been published on the America's Cup noticeboard, but no media release or other document has been put out by Golden Gate Yacht Club as to why the Protocol has been changed, in this way and with this timing.

Neither has there been any word on the Decision on the remedies to be imposed by the Arbitration Panel to redress the losses suffered by Emirates Team New Zealand and others involved in the reallocation of the Qualifier regatta from Auckland to Bermuda after ETNZ supported in social media the stand taken by former Challenger of Record, Luna Rossa, over the changes of the America's Cup class from an AC62 to an AC50 by a 4-2 majority of the teams. That decision was made nine months after the entries opened for the 35th America's Cup, and the AC62 had been announced.

Luna Rossa had built a base in Cagliari, Italy and had hired a near full strength team of over 80 people. The change to the AC50 was touted to reduce costs, however Luna Rossa noted in their media release confirming their withdrawal, that they had 'frequently advanced proposals aimed at containing costs that however would not have changed the nature of the boats, but these proposals have systematically been rejected by the Defender'. Four times challenger Luna Rossa team exited the regatta, and one team, first timer, Softbank Team Japan joined the regatta as a result of the change in class and Qualifiers venue.

The Arbitration Panel has been established for almost a year. It comprises three members, one of whom is Australian Sailing President, Matt Allen.The Chairman has to be a Arbitrator with the Court of Arbitration for Sport, the second panel member is expected to be similarly qualified. The panel members have never been publicly announced or named by Golden Gate YC or its related entities charged with America's Cup event organisation and marketing.

In June 2016, draconian measures were made to the Protocol for the 35th America's Cup, just ahead of the Hearing in July 2016 in London. Those changes prohibited any team or involved party discussing matters before the Arbitration Panel, or even acknowledging that a team was referring a matter or dispute to the Arbitration Panel. Substantial penalties of up to $1million can be levied on a team or involved party who breeches the confidentiality provisions.

Much of the detail of the current case was made public by Emirates Team NZ, days and weeks after the withdrawal of the Qualifiers which was followed by an intense period of media comment and accusation within New Zealand. Nine months later the teams became chained and shackled by the new confidentiality provisions - which were passed by a majority only.

These changes are a substantial departure from previous America's Cups where decisions have been released in full or part once the have been released to the teams, along with media statements from the International Jury or event or event organisers.

Technically the self-imposed sailing Blackout on the AC50's does not form part of the Arbitration Panel's Decision on Remedy's and Damages, and could still be given more teeth by the AAP if it took further submissions on the time-out remedy. Alternately, and more-likely, the AAP could accept the Protocol change and incorporate that into their Decision.

Around the end of March 2015, then America's Cup Commissioner Harvey Schiller took the action to remove the Qualifier Series previously allocated to Auckland, causing Emirates Team New Zealand to lose NZ Government financial support for the team and the Qualifier Series.

That loss of a major sponsor triggered a substantial financial and organisational restructuring of the New Zealand team, as well as disrupting plans to launch and build up in New Zealand for the Qualifier Series before four Challenger teams shipped to Bermuda for the Pay-offs and remainder of the America's Cup Regatta.

Under the original proposal for the Qualifiers, all teams (including Oracle Team USA) would have launched and set up their AC50's in Auckland, and sailed the Qualifiers, then the top four Challengers would have gone to sail in the Play-offs (Semi-Finals and Finals) in Bermuda. Several teams have had their AC50's built in New Zealand and would have been able to commission these in Auckland, ahead of the Qualifiers, with the assistance of their builders.

Now the teams are all setting up in Bermuda and Emirates Team New Zealand, despite having won their protracted Qualifiers case in front of the Arbitration Panel will lose substantial sailing time shipping to Bermuda, once their AC50 is launched in Auckland as per the original schedule.

The latest development is a Protocol Change agreed to by all the teams, and institutes 'a blackout period of twenty-eight (28) consecutive days shall be taken by each Competitor, which period must begin on or after 9 January 2017 and must end prior to the first scheduled race day of the America’s Cup Qualifiers.

'Each Competitor shall nominate its own blackout period by advising the dates to the Regatta Director prior to the commencement of that Competitor’s nominated blackout period.'

During the blackout period, a competitor cannot sail its AC50 yacht but may undertake work on the team's Challenger/Defender, if it has not been launched prior to the start of the nominated Blackout Period.

If the AC50 has been launched, then the teams cannot work on 'the platform, wing, daggerboards and other
components which have already been installed in the AC Class Yacht while afloat'.

The teams may also use AC50 components on their AC45S test platforms during the Blackout Period.

While Emirates Team NZ have agreed to the change, they will still suffer significant disadvantage in that their 28 day period will be taken from the time their AC50 is decommissioned in Auckland and re-commissioned in Bermuda.

Additionally, they are believed to be using some parts from their AC45S test platform on the AC50 - and will not be able to sail their AC45S at all. Other teams will have the option of choosing when to take their Blackout period, and will be able to run their AC45S test platforms during the Blackout.

The Blackout is a compromise, apparently driven by self-interest, that has been hammered out between the teams, rather than wait for a decision from the Arbitration Panel which could have been longer or shorter than the 28 day period. A full Blackout could also have included a complete sailing ban on AC45S platforms as well as keeping the AC50's ashore - which is more akin to the situation in which the New Zealand team have been placed.

There has been no word of the financial compensation that is expected to be awarded to the team as a result of the actions taken by General Schiller in his capacity as Commercial Commissioner for America's Cup Events Authority, the events organisation, and marketing arm of America's Cup Defender Golden Gate Yacht Club.

The financial cost to the Kiwi team has never been spelled out - but is believed to be in the vicinity of $25million. The NZ Government invested $37million in the NZ team for the 34th America's Cup in San Francisco.

General Schiller resigned his position soon after the Arbitration Panel Hearing in timing that was claimed to be completely co-incidental and unrelated to his signing of an agreement awarding the Qualifier Series to Auckland on February 28, 2015. This story was covered here

No media release advising/confirming General Schiller's exit was publicly released by Golden Gate Yacht Club or its America's Cup entities.

For the teams in Bermuda, the effect of the Blackout period will likely be that they will delay the launch of their AC50's until after the 28 day Blackout has passed. This will enable the teams to keep working on the unlaunched AC50. They will be able to continue with their AC45S development program using platforms, wingsails and system that duplicate the AC50 as closely as possible, while continuing to implement any changes on the unlaunched AC50 during the 28 day Blackout period.

If they do launch their AC50 ahead of the Blackout period they will have to effectively mothball their AC Yacht for the 28 day period, and may not undertake any repair, alteration, or adjustment on parts used on the boat.

Teams who have not yet arrived in Bermuda are expected to use the Blackout period to offset their transit time to Bermuda. They will also set up their bases in Bermuda in this period.

For earlier stories on the anonymous Arbitration Panel Hearings click here and here and here