Butterworth nukes Dalton in America's Cup ruckus

by Greg Ford, Sunday Star Times & Sail-World on 6 Apr 2008
Brad Butterworth believes Team New Zealand is on the cusp of going broke and has no chance of sailing in another America's Cup if managing director Grant Dalton stays at the helm.

In an explosive interview with the Sunday Star-Times the Alinghi skipper and former America's Cup winning Team NZ sailor:

- Slams Dalton's decision to sue the Swiss syndicate, saying it was an act of betrayal that will ultimately lead to his demise.

- Reveals that he barely speaks to his friend and former sailing partner Russell Coutts because of the legal battle between Alinghi and Coutts' BMW Oracle syndicate over the next America's Cup.

- Says Alinghi owner Ernesto Bertarelli essentially ensured Team NZ was at last year's America's Cup in Valencia by arranging sponsorship and providing finance to the Kiwis.

Dalton denies the claims.

But Butterworth has documents and details that appear to reveal that Alinghi owner Ernesto Bertarelli not only saved Team New Zealand with a loan in 2003 but set up a sponsorship deal with Spanish brewer Estrella Damm so the team could compete in Valencia. He also financed the air freight of a Team NZ boat when it was cash-strapped and shared last year's regatta spoils, writing a multi-million-dollar cheque to Team NZ from its profits.

'Grant definitely got special treatment,' says Butterworth. 'We're now wondering why he has taken this extraordinary action, but we now believe he's jumped into bed with Oracle, that he's so desperate for cash that he's now become their lapdog.'

Sensational claims are nothing new in the America's Cup, but Dalton had previously distanced himself from all the petty squabbling and fighting. But his decision to sue Alinghi for millions claiming they broke a promise to hold the next cup in 2009 has changed all that.

Last week, Butterworth produced Team New Zealand's Notice of Entry signed by Dalton on July 25, 2007. In it Dalton absolves Alinghi of any liability should a third party delay the cup. It specifically refers to the risk of pending legal action from Oracle that has led to Team NZ's exclusion from the next regatta, a multihull one-on-one challenge between Oracle and Alinghi.

'I don't know the finer points of his financial position but my guess is he's [Team NZ] broke,' said Butterworth.

'Why other than the fact he's desperate and out of his depth would he take this action? It's a joke.'

In a written statement to the Sunday Star-Times, Dalton denied his team was in financial trouble and was bullish about its legal position. 'Alinghi's view on the law has been shown consistently to be wrong in successive judgments ...' he said.

'Instead of reading law books, Brad Butterworth should concentrate on learning how to sail a multihull.'

For the full intro into this much longer article in the Sunday Star Times www.stuff.co.nz/sundaystartimes/4466230a6444.html!click_here

Sail-World comment:

We have neither seen nor heard any facts or rumours which support Butterworth's allegations of Team New Zealand's ongoing viability.

In our three visits to the ETNZ base in Auckland since the last America's Cup there has bee no discernable change in the state of the base. While it has been well known that they have reduced staff, we have heard no rumours of complaint from those staff or their assiociates about their treatment from Emirates Team NZ. Sadly we cannot say the same about people let go by Alinghi. However those individuals have not spoken out.

The loan by Bertarelli made in 2003-2004 was welcome, a nice gesture and very appreciated at the time. However from an event perspective, it was also very much in Bertarelli's interests to have a strong challenger like Team New Zealand back in the 2007 event. The loan has been repaid, and there is no doubt that the 2007 America's Cup benefitted from ETNZ's participation. Similarly with the gesture to fly the newly repaired NZL-82 into Europe after NZL-81 was badly damaged in a freak overnight storm in Marseille, France early in the 32nd America's Cup cycle. Again this helped the profile of the Acts, it is not known whether ACM had a contractual obligation to deliever certain competitors to each Act venue.

It may well be true that the entry form for the absolves the America's Cup organisers of all liability. This is common text for all Entry forms and Notices of Race. However there was also an agreement accepted by Hamish Ross on behalf of Alinghi, as an authorised representative which agreed to have an Event in 2009. This agreement was made immediate prior to the much heralded announcement in late July 2007 by Bertarelli that he had the 2007 Louis Vuitton Cup winner on board - providing a lot of credibility to his cause and the event he was promoting at that point.

It is also worth noting that the entry form was relevant to an event that has since been effectively declared by the New York Supreme Court to be a nullity, however the agreement between Alinghi and Team New Zealand is a separate, commercial arrangement.

Butterworth claims that America's Cup Management shared the spoils of the 32nd America's Cup. This arrangement was all covered by the Protocol for that event, and was nothing to do with benevolence on the part of Ernesto Bertarelli, or anyone else. As the most successful challenger, Team New Zealand was, according to the formula in the Protocol entitled to the largest share. This distribution was published at the time. The reason for the share is as a pre-condition of the Challengers running their event, the Louis Vuitton Cup, with the America's Cup, which is a Defender owned event. By combining their forces the marketing potential for the two events is maximised, and the profit share is undertaken according to a pre-agreed formula. (A similar approach was in place for Auckland in 2003, but was much less profitable.) While ACM did take some flack for its 'control-freak' approach to all things involving the event, it must be remembered that ACM and Bertarelli, also picked up all the liability associated with the event, and protected the Challengers from any downside in either the Louis Vuitton Cup or America's Cup. And certainly Ernesto Bertarelli is due full credit for the vision with which he set up the event and ran it to ensure a good payout of profit for the challengers.

There is more material that can be injected into these claims between estranged parties in the current America's Cup wrangle, however the proper place for these is the Courtroom, and it does the sport and event no good to have these assertions vented in the public arena in the way that Butterworth has chosen.

Richard Gladwell
NZ Editor.