Please select your home edition
Edition
North Sails 2021 Innovation - LEADERBOARD

Gladwell's Line -The America's Cup settlement deal

by Richard Gladwell, Sail-World.com on 11 Oct 2016
Emirates Team NZ - AC45S October 4, 2016 Richard Gladwell www.photosport.co.nz
The 'News' today that Emirates Team New Zealand has won their case before the America's Cup Arbitration Panel is not new or exclusive. Sail-World reported the same story a month ago.

(For the September 8, 2016 story click here and confirmed a week later - click here)

The Hearing on the amount of compensation to be paid is yet to be held. So far there is nothing out on a Hearing Date for the Remedy phase of the Hearing, if indeed one has been set. Maybe next year? And then another month or so for a Decision?

Clearly, some money will change hands, quite how much is going to be determined. The $5million quoted today in New Zealand is way too light.

We know that the NZ Government invested $NZD37million into Emirates Team NZ in the 34th America's Cup in San Francisco.

After the team had returned to New Zealand, it became clear that there had been no Plan B in regards to the continuance of the team in the event of a loss in San Francisco, and Minister Steven Joyce announced an injection of $5million soon after the team's return home.

That $5million would have come off any Government investment for the 35th America's Cup. It was a funding advance.

Our guess is that the Government was set to invest $25million in Team New Zealand in return for hosting the Qualifiers in Auckland. Whether that included the costs of Hosting, would have been subject to negotiation. Similarly, whether that included a contribution from ATEED (Auckland Council) was also to be determined. And then there might have been a funding line from Major Events NZ, who are pumping $500,000 into the 2016 Youth Worlds to be held in Auckland in December 2016. The point being that the investment cards can be dealt a number of ways. But Team New Zealand would have been left with a substantial and early sponsorship.

The team had made a lot of effort to get itself into a situation where it was in compliance with many of the Government's dictates for future funding. It put in place a Board, with a Government approved Chairman. Grant Dalton and Gary Paykel dropped off the new five-strong Board. There was a lot more disclosure of team budgets and salaries to the NZ Government parties. All that compliance effort and cost was necessary to get the investment in the Team and Qualifiers.

The hosting agreement was in place for the Qualifiers and had been since around the end of February 2015.



Team CEO, Grant Dalton claimed in a video that the deal put to the teams was that they agreed to change the boat to an AC45 and have the Qualifiers in Bermuda, or stay with the AC62 and go to Auckland. That claim seems to have been validated by subsequent events.

The suggestion that the financial compensation to be paid to Emirates Team NZ could be $5million is well short of the actual loss to the team - which is probably three or four times that amount. Let alone the damage that was done to the team brand, in the NZ media in particular. Add in too, the flow-on effect that media ruckus had on other sponsors - who would have looked hard at a sponsorship deal in New Zealand for the Qualifiers even though the Play-offs and Match were always to be held in Bermuda.

The NZ Government would have got back most if not all of its investment from taxes from team and fan expenditure in New Zealand. Take away that Auckland Qualifier component and the investment didn't stack up. Neither did Bermuda as a venue. Any of the North American venue options would likely have seen a repeat of the investment at the levels in the NZ-based team at the levels of the 34th America's Cup.


The requirement that the Arbitration Decision is kept confidential only serves to extend the damage the NZ team's reputation.

They deserve to be publicly exonerated as soon as possible. It might suit the majority of the teams to maintain complete confidentiality but not at the cost of a team who acted in good faith in this sorry saga. The credibility of the NZ team has been called into question, as has that of some senior members of the team and those on the Board - including Sir Stephen Tindall who played a lead role in the negotiation and whose reputation is beyond reproach.

The time has long passed for Golden Gate Yacht Club/ACEA and the teams to come clean over this matter. Hiding behind a smokescreen of majority imposed confidentiality over an act of petulance does nothing to enhance the tattered credibility of the current America's Cup.

What is there left to hide - aside from shame and embarrassment on the part of organisers and some of the teams?

_________________________________________________________________________________________________

It is clear from media reports around February 18, 2015 that a significant investment announcement was about to be announced by the NZ Government once the Qualifiers were officially announced.

Documents released under the Official Information Act show that in the last four America's Cups the New Zealand Government made the following contributions to Team New Zealand:

2000 - No direct investment in Team NZ and no additional spending for NZ marketing and promotional activities

2003 - $8.6million direct investment in Team NZ, and and additional $4.5 million spent on event leverage in NZ

2007 - $33.75million direct investment in Team NZ and an additional $3,528m on marketing and promotion in Valencia

2013 - $36million direct investment in Team NZ and and additional $3,932m on marketing and promotion in San Francisco

In February 2009, Auckland hosted a round of the Louis Vuitton Pacific Series using boats supplied by Team NZ and BMW Oracle Racing the NZ Government made a contribution of $3.5million to the event costs in addition to funding provided by Auckland City Council.

Henri-Lloyd 2022 August Summer Sale - SW FOOTERWebasto AUS 2020 FOOTER 1Sail Racing 2021 FOOTER

Related Articles

SSL Gold Cup - D5 - Australia versus Switzerland
Lighter breezes meant the Australians got to use the G1 Genoa for the first time. Lighter breezes meant the Australians got to use the G1 Genoa for the first time.
Posted today at 2:15 am
Allen's Hatch Cover Bag
Quickly and easily maximise storage space on your dinghy Looking for a place to stash your snacks, drinks bottle or even a few spare parts whilst out on the water? There's only so many things you can shove in the front of your PFD, so fitting a hatch cover bag will quickly maximise storage space on your dinghy.
Posted on 11 Aug
100th Annivesary Star Worlds in one month
90 entries from 14 nations with over 15 past World Champions and 15 U30 teams It's shaping up to be an event to remember, the 2022 Star World Championship not only will be celebrating the 100th Anniversary Championship but will register a record number of participants after the Olympic years.
Posted on 11 Aug
Dates set for 58th Congressional Cup
Long Beach Yacht Club's elite Match Racing event Dates have been announced for the 58th Congressional Cup regatta and Ficker Cup qualifier hosted by Long Beach Yacht Club: with Congressional Cup slated April 18 to 22, 2023 preceded by the Ficker Cup April 13 to 15, 2023.
Posted on 11 Aug
505 Worlds at Crosshaven, Ireland day 3
Still no wind! Day 3 completed, and we still have only one race in the bag.... Ireland has a large ridge of no wind sitting stationary above it and it is wreaking havoc on the 505 fleet. For the second day in a row the planned racecourse offshore had zero wind.
Posted on 10 Aug
HumpyBong Yacht Club WinterBash 2022
Weather was mixed over the two days with fair conditions on day 1 Humpybong Yacht Club President Ryan McLaughlin said sailors from Tasmania to Sydney had nominated early for the event on Saturday 30th and Sunday 31sth July with a total of 86 boats in all divisions.
Posted on 10 Aug
OK Dinghy Worlds in Marstrand day 3
Two races in a building breeze were the perfect antidote after a great dinner Charlie Cumbley, from Britain, has consolidated his lead on the third day of the 2022 OK Dinghy Worlds, to take a three point lead at the top from Sweden's Thomas Hansson-Mild, with Norway's Lars Johan Brodtkorb, one point further back.
Posted on 10 Aug
One year to go until 2023 Allianz Sailing Worlds
Making history by being the first to include Para World Sailing events On 10 August 2023, 1,400 of the world's best sailors will take to the waters of the port of Scheveningen in The Hague, The Netherlands, for two life-changing prizes.
Posted on 10 Aug
SSL Gold Cup - D4 - Australia versus Brazil
On day four of training in the 2022 SSL Gold Cup, Team AUS tussle with Team Brazil On day four of training in the 2022 SSL Gold Cup, Team AUS took to the water to tussle with Team Brazil.
Posted on 10 Aug
"Best-rigged vessels have a 2 finger forestay sag"
The rig tuning legacy of Uffa Fox, 50 years on from the great man's death From 18th - 21st of August the Royal London Yacht Club celebrates the life of Uffa Fox with the Uffa Fox 2022 Regatta.
Posted on 10 Aug