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Gladwell’s Line- Russell Coutts on the America's Cup bunny hunt

by Richard Gladwell on 18 Jan 2010
Russell Coutts - BMW Oracle Racing CEO and skipper BMW Oracle Racing Photo Gilles Martin-Raget http://www.bmworacleracing.com

The War of Words has continued between the Challenger and Defender since the breakdown of talks, last Thursday, aimed at resolving the outstanding issues in the 33rd America's Cup.

Even though the Meeting, convened under the Chairmanship of the International Sailing Federation’s David Tillett, broke up without a signed agreement, discussion has apparently been ongoing.

Late last week, Sail-World was told that the matter was still a 'live bunny', although many could not see too much hop left in this particular rabbit.

Since that comment one of the great tools of the 33rd America’s Cup, the Open Letter, has been used by both the Challenger and Defender to put their various positions.

The latest comes from the Challenger, Golden Gate Yacht Club, this morning (NZT) chasing the bobtail of Defender, Societe Nautique de Geneve, and their offer a few hours before, to re-open the discussions from Singapore.

Russell Coutts, CEO of BMW Oracle Racing was in a slightly perplexed frame of mind, when called this morning (NZT) in Valencia, to discuss the latest about turn by the Defender, as they had apparently declared the arrangements for the regatta were done and dusted, last Friday.

'It is very curious, as without going into all the details of the Singapore Agreement, the Constructed in Country and all the other issues would have been solved, last week. So you have to wonder if that is what they want, when all they have to do is just sign the Singapore agreement

'While I can’t tell you what was in the Singapore Agreement, it certainly addressed the Constructed in Country issue.

Coutts recapped the process followed at the Singapore meeting: 'There was an agreement at the end of the first day, which was subsequently vetoed, and then the same thing happened again at the end of the second day. It is very strange, as they claimed we broke off the negotiations, however there remains an agreement which we have signed along with David Kellett of the International Sailing Federation. So how can they claim we broke off negotiations when we had already signed the agreement that Alinghi’s representatives had negotiated – and all that remained was for the Swiss to approve?'

'Clearly the Swiss were the ones who broke off the negotiations.'

A day after the Singapore Meeting, Alinghi CEO Brad Butterworth issued a statement 'for the record' claiming that it had been Golden Gate Yacht Club who had called off the agreement.

Butterworth said in the earlier statement: 'We had a meeting with BMW Oracle representatives from 09:00 SGT on Tuesday 12 January until 20:00 that night and agreed to reconvene the next morning to continue as there were a lot of issues that we had agreed on but a few that were holding us apart. We agreed before the ISAF representative, David Kellett, and the ISAF AC Jury chairman, David Tillett, to have a media blackout and to do nothing that would jeopardise the discussions until we had had sufficient time the following day to talk these remaining issues through. As it happened, we all ended up having dinner together and continued the discussions, which concluded that night with a gentleman’s agreement.'

Coutts broadly agrees with that series of events:

'At the start of the meeting in Singapore on Tue morning, we put forward a discussion document which had five points which were at issue and which we discussed with Alinghi and the ISAF for the first day.

'At the end of the day, Hamish Ross (Alinghi) wrote up a draft agreement on his computer, and our negotiators, Tom Ehman and Richard Slater were ready to sign it, but didn’t physically do so.

'Just before they went to dinner the Alinghi negotiators (Brad Butterworth and Hamish Ross) received a call telling them not to sign the agreement.

'Our side then gave the Alinghi negotiators until 1000hrs the next morning to accept the agreement they had negotiated and drafted, or something substantially similar, or we would file our action in the New York Supreme Court on the Constructed in Country issue. We had already delayed filing it for a week, pending the Singapore meeting.

'Brad turned up late for the meeting which was supposed to have reconvened Wednesday at 0900hrs. The Alinghi reps were asked if they were prepared to sign the document negotiated the day before, and they said they weren’t. So we proceeded with the action but continued to negotiate for a second day with Alinghi and ISAF.'

That version differs a little from Brad Butterworth’s media statement, which indicates the filing action in New York had taken place before the second day of the meeting in Singapore: 'When we reconvened at 09:30 the next morning (Wednesday 13) and the meeting was brought to order by Tillett, Tom Ehman – on behalf of BMW Oracle – instructed us that court proceedings had been filed in New York overnight and that they were sending a media release. At this stage the relationship between the two teams soured dramatically, but despite this surprising development, the ISAF representatives encouraged us to take the agreement back to the team principals which I agreed to do.'

Coutts takes up the story again: 'By the middle of the second day (Wednesday) Hamish Ross had again typed up an amended on his computer, and he and Brad went away to speak with their principals in Switzerland about signing. Meanwhile, Tom Ehman and Richard Slater signed for us. Then David Kellett signed for ISAF because he had to leave for the airport, David Tillett, Tom Ehman and Richard Slater were still waiting in the conference room when Hamish Ross returned and said that he was instructed that they could not sign. So after a second day of negotiations, and another agreement, and with our signatures on the agreement, we were back to where we had started.'

Here the parties differ significantly in their version of events.

Brad Butterworth: 'The meeting ended and the ISAF guys left for the airport. During the course of the afternoon, I was initially instructed that BMW Oracle were keen to sign the deal, but by the time I got hold of the guys in Valencia to discuss it, Oracle had withdrawn from the agreement.'

Coutts denies that BMW Oracle/GGYC ever withdrew from the agreement, which they were bound by their signature.

Sail-World has been provided with a copy of the signature page of Draft 8 of the Singapore Agreement, signed by David Kellett, Tom Ehman and Richard Slater, with neither Alinghi/SNG negotiator signing.

In the latest missive from SNG the Swiss Defender now confirms they wish to negotiate further.

Coutts sees a continuing pattern through the whole negotiation process that has been ongoing for over two years. 'Alinghi and SNG have never once come to us with a set of counter proposals', he says. 'We thought we had it settled at one point in 2007. But out of the blue they changed their minds, and we were back to where we started. It has been that way ever since.

'However we have subsequently written to the ISAF and SNG/Alinghi saying that we want to keep the negotiations going.'

The current issue is clearly that of Constructed in Country, and particular the GGYC/BMW Oracle view that sails must be constructed in the country of the Challenging or Defending Club, meaning that Alinghi 5’s sails must be constructed in Switzerland and not in Minden, Nevada, USA as BMW Oracle/GGYC claim in their latest Court action.

An exasperated Coutts quotes BMW Oracle racing Team boss, Larry Ellison to describe his feelings on the saga. 'Larry describes it like trying to negotiate with someone that is parked in your driveway. You say they are, they say they aren’t.'

'We know their sails are not made in Switzerland, they were made in Minden, Nevada, USA,' Coutts says.

When asked what evidence he has of that, Coutts replies that 'You’ll have to ask him (Brad Butterworth) why he says that sails that were made in Nevada were made in Switzerland.'

'We don’t mind racing on 8 February, but their yacht has to be constructed in Switzerland and that includes the sails.

'We want the matter addressed before we go racing, not afterward.

'Ernesto uses tennis to describe the current situation, saying that 'it would be like asking Roger Federer to defend his title without using his tennis racquet.'

'My response to that is that they don’t allow tennis player to plays with illegal racquets at Wimbledon. The rules are set and all players have to abide by them'

'We won’t allow Alinghi to break the rules', Coutts adds. '

As to whether this whole situation is a result of ill-feeling on a personal level between him and his former team boss. Ernesto Bertarelli, Coutts responds: 'This definitely is not some personal vendetta I have against Ernesto. I have never struck anything like this before in my entire sailing career, where one competitor turns up at a regatta with illegal sails and wants to use them'

'We want this sorted out before the series,' he adds. 'You can’t have a major rules question and then sort it out after the regatta is sailed!'

'We placed the issue before the Court because that is where we have had to go with the other issues we have had on the Deed of Gift such as inclusion of rudders in waterline length; clarification of Load Water Line measurement; whether measurements were 'shall not exceed' rather than the Alinghi version which was that they had to be met exactly; plus the issues that were referred to the Three Wise men (Expert Panel advising Justice Shirley Kornreich) and so on.

'We don’t have to wait until the first race of the America’s Cup to see if they actually use the 3DL sails while racing. We want the issue resolved now.

'Alinghi had the chance to resolve this in Singapore, and twice failed to sign off on the agreement. Constructed in Country was one of the issues on the negotiating table at that meeting.

'We have said to the Court that we will give them time to comply and make new sails if necessary.

'I know they can make Deed legal sails in Switzerland. Even if they did have to buy standard cloth, that would be OK with us. They can make 3DI sails in Switzerland (another North sails product). We built sails in this method when I was with Alinghi, and they can do it again.

'The Deed of Gift says clearly that the yachts, (which includes the sails), must be constructed in the country of the Defending Club. If Alinghi/SNG can’t comply with this requirement, then an America’s Cup sailed under the Deed of Gift is not the regatta for them. You have to able to comply completely with the requirements of the Deed of Gift. You can’t cherry pick the Deed..'

The constructed in country issue has never been formally ruled on by the New York Supreme Court and clearly GGYC/BMW Oracle Racing risk falling outside any particularly literal ruling that the Court might make.

'Absolutely', Coutts agrees. 'That is a risk we take.'

'Some people draw the line at use of raw materials in the construction. We have been absolutely scrupulous that our yacht complies.'

Some use a test of origin of raw materials as the most literal view of Construction in Country that a Court could take in its ruling on this matter. Coutts is happy with this view, too. 'Our carbon was made from oil that came out of the ground in USA', he points out. 'Others subscribe to the view that off the shelf parts can be used in the construction process irrespective of their country of manufacture. We are comfortable with that view too.

'However we are not going to allow major components to be moulded and vacuum bagged in USA, and then flown to Switzerland for finishing. That does not comply with the Constructed in Country requirement of the Deed of Gift.

'When you look at the intent of the Donors of the America’s Cup, it is clear that the yachts had to be completed and constructed in the country of the Challenger. The Donors didn’t even like changes being made in the country of the Match.' he added.

'We hope that the matter will be resolved before 8 February.'

As the former CEO and winning skipper of Alinghi in the 2003 America’s Cup, Coutts is unable to comprehend the decision making process that now prevails in his former team.

'This wasn’t the way we worked,' he said referring to the process followed by Alinghi/SNG of late. 'Before I left, we would sit down as a group and make a decision and stuck with it. They are certainly operating in a different way from what we saw in Singapore and previously in this cycle'

Looking ahead to the 33rd Match, Coutts says that Alinghi have been out sailing for a few days, now. BMW Oracle Racing expect to be out on Tuesday.

'They are two pretty spectacular boats', .he said referring to the Swiss catamaran and the US trimaran.

'Their performance will be quite dependent on the precise conditions and course that prevails on each race day.

'Alinghi is very light-air moded, as are we, but Alinghi 5 is particularly so.'

Turning to the development and use of the wingsail, Coutts says they have some tuning to do with the wing, but provided it is on its design settings it is very fast', he says.

'It is quick out of the box. The same as Stars and Stripes found in 1988. Once you put it up and put it on the design settings it is hard to get a lot more performance out of it. We are getting 90-95% of its potential performance now.'

However before the Match can take place, clearly the outstanding issues between the Defender and Challenger have to be resolved. That resolution now lies in the Defender’s court according to the latest Open Letter, issues a few hours ago exchange by the San Franciscan based Challenger:

'You will be aware that the Singapore Agreement included a provision that all legal actions by both sides – including Wednesday’s CIC motion – would be dropped. Be advised we will not rescind that motion unless and until your Club signs the Singapore Agreement' says their latest note.

'We hereby renew our commitment to Draft 8 of the Singapore Agreement, but this offer ends at 1900 CET tomorrow, Monday, January 17, 2010.

'SNG/Alinghi’s continued unwillingness to sign the Singapore Agreement, which would settle all the remaining issues before the 33rd Match commences, will be a heavy burden for your Club, as Trustee, to bear.'

Will this matter be resolved the hard way, or the easy way?

Watch this space.

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