America's Cup: Brits stage a bloodless coup
by Richard Gladwell, Sail-World.com/nz 27 Apr 2018 15:00 PDT
28 April 2018
Land Rover BAR enjoys a rare moment crossing ahead of Emirates Team NZ on Day 3 of the Semi-Finals © Richard Gladwell
Sir Ben Ainslie has revealed in the Daily Telegraph (UK) more details of the America's Cup team's sponsor-switch to British owned petrochemical conglomerate INEOS.
The announcement was unheralded in a theatre where secrets are few.
INEOS will pump £110million into the challenge for the 36th America’s Cup. Ainslie says it is effectively a new team called INEOS Team GB, rather than a re-badging of the Land Rover BAR challenge, which announced their intention to continue with a full budget the day the team was eliminated from the 2017 America's Cup.
It is reported elsewhere that part of that sum was buying out previous sponsors and backers.
"It has been a whirlwind few weeks," said Ainslie. "The decision to go this route was not taken lightly," says the most successful Olympic sailor in history. "It is a massive shift from the previous model we had, which had been to build a commercially sustainable structure through a mixture of investors and commercial partners.
"It had, however, become increasingly clear – with the announcement of the new class rule by Emirates Team New Zealand and the rule changes which have been put in place – that we would need to build two 75-foot foiling monohulls from scratch", he told the Daily Telegraph.
"That requirement to run a two-boat campaign took the budget up by approximately 30 percent, to about £110?million.
"We tried incredibly hard to make it work with our existing investors and commercial partners; looking to see whether we could increase our budget under that structure. But it became clear that we were not going to hit the required target."
Emirates Team New Zealand claim that the tri-foiling monohull program will be no more expensive than the last America's Cup sailed in AC50 wingsailed foiling catamarans. The Kiwi team noted that while the teams can build two of the AC75's instead of just a single AC50 for the last America's Cup, several teams built three or four of the smaller AC45S test boats for AC35.
ETNZ claimed those boats were more expensive than the AC50 itself. Emirates Team NZ have said their last program cost a bargain basement NZD$80million after program cuts forced NZD$20million to be chopped from the initial budget when Bermuda was announced as the Match venue.
In the Daily Telegraph story, Ainslie says INEOS Team GB will be building surrogate AC75 test boats - which are limited to a length of 12 metres or less. It is believed that a 38fter using a stock hull will be used, along with carbon arms and steel foils. Given that the same parts for the AC75 will be supplied replicating this apparatus on a test boat will not be a cheap exercise.
Ainslie says they expect to launch their surrogate boat during the coming UK summer. That should prove to the doubters that the radical concept will literally fly.
The new structure of the challenge only came about within the last four weeks. It replaces the multi-layered, multi-program structure of the Land Rover BAR campaign which ran everything from a Youth Sailing Academy to the America's Cup Challenge, and which was a showcase for the British marine industry. It also had strong patronage from the third generation of the Royal family - providing an allure for sponsors and fans that few could match.
The new campaign is a much simpler affair. Ainslie is expected to continue to be the public face of the Challenge, while behind the scenes the wily Grant Simmer (AUS) who was the 26yr old navigator on Australia II, and has won four America's Cups (Australia II, Alinghi (2003 and 2007) and Oracle Team USA), should be running the development and delivery of the boat and sailing program. The wily Australian enjoys a reputation as the Red Adair of the America's Cup, usually being a game changer for any team which allows him a free reign.
"It was at around this time, a month or so ago, that I was introduced to Jim Ratcliffe, the chairman of INEOS", Ainslie explains. "We hit it off and Jim immediately understood the project and what was required if we were to be competitive. Amazingly, Jim agreed to underwrite the entire campaign."
"Jim’s quid pro quo – quite reasonably – was that if he was going to inject this much into the project, it needed to be a completely blank slate."
"I will not lie, there were some detailed conversations with our existing investors and commercial partners. They were disappointed," he told the Daily Telegraph.
"But, ultimately, this was the team’s decision, and they could see that this was a massive opportunity to give Britain the best chance."
What is not clear is whether INEOS will be the exclusive sponsor of the campaign along with other companies in the group, or if other supplier level sponsorships will be sought/permitted. The single sponsor/backer is in line with the billionaire backer model run by Alinghi and Oracle Team USA in its early campaigns. That is the expensive option for a team underwriter.
The multi-sponsor model has never worked for other America's Cup winners aside from Team Dennis Conner in its 1987 campaign and Emirates Team New Zealand which has run a commercial model for its 30-year life albeit with varying degrees of NZ Government sponsorship.
Land Rover BAR appeared to suffer speed problems from the day they first launched their AC45S. Issues which surprisingly continued right through the America's Cup Regatta when they exited the semi-finals, beaten 5-2 by the eventual America's Cup winner. In that final series, Land Rover BAR lost two races to gear failure and won another when ETNZ nosedived. To their credit, they took one genuine race win off the Kiwis, who went on to dominate Oracle Team USA in the 35th Match winning 49 marks to OTUSA's 5.
Their saving grace was winning the America's Cup World Series, sailed in one design AC45 wingsailed foiling catamarans. That gave Ainslie's team a vital two point leg up onto the America's Cup Qualifiers. That lifted them into third place overall on the standings, despite winning only four races and losing six. They were a logical opponent for ETNZ who were seeking some starting practice against an aggressive match racer.
Click on the video below to see the media conference at the Prospect of Whitby
While the Brits didn't cover themselves in podium glory in Bermuda, they did emerge as the team with the strongest base from which to launch their next campaign - given that only one Challenger has won the America's Cup at their first attempt.
The New Deal has strengthened that bastion - shedding the baggage of having to service multiple sponsorship packages. That model is always draining for a leader in Ainslie's style - being Team CEO, Skipper and Helmsman, plus being the face of the team. They have retained their specialist base built in Portsmouth and made enough mistakes in the previous campaign to have a bed rich in learning experience.
"I cannot thank them enough for the way they reacted", Ainslie told the Telegraph of the conversation he had with the team's backers - who had put together a very good off the water challenge for the last America's Cup. In a massive gesture of faith, the backers had signed up for another dose before the team's elimination in Bermuda.
"That goes for Sir Keith Mills, Chris Bake and Sir Charles Dunstone – whose investment and expertise got BAR off the ground in the first place – as much as anyone. They remain firm friends and supportive of the project, as do all of our original investors," Ainslie added.
"Basically, the new structure sees the racing arm of BAR renamed and entering into a service agreement with INEOS whereby we provide INEOS with the boats, the team, the wherewithal, to compete for the 36th America’s Cup under the Royal Yacht Squadron Racing’s banner." It will, in fact, enter under the banner of an affiliate club of the Royal Yacht Squadron.
The fact (at least outwardly) that it has been a bloodless coup speaks volumes for the future of the team, which has been able to transition with the threat of legal action and recrimination.
The Times of London alluded to stiff upper lip response from previous naming rights sponsor Land Rover BAR.
"Land Rover, the team’s previous title sponsor, issued a statement saying it was disappointed at being dropped," reported the Times.
“On Friday, Land Rover was notified that INEOS had bought the team and that its contract was terminated,” the statement said. “We are extremely disappointed having worked tirelessly to support Ben and the entire team. It is a great blow to us all that our partnership will not continue.
“Land Rover remains committed to the sport of sailing. We wish Sir Ben and the British team every success in their campaign to bring the cup home,” the statement concluded.
There has been a subtle clean-out at head office - which now has a distinctly Antipodean look with Australian Grant Simmer in as CEO, New Zealander Nick Holroyd as chief designer, and Jono Macbeth (ex ETNZ) on the top deck.
Perhaps the strongest legacy for INEOS Team GB is the relationship that Land Rover BAR had formed with the British Olympic program - the most successful in terms of medals of any Olympic sailing nation. Along with Emirates Team New Zealand, Land Rover BAR made a point of hiring local talent, instead of recruiting using the "best of breed" approach adopted by the other four teams - which was possible using the minimalist approach to the nationality rules adopted in the Protocol for the 34th and 35th America's Cups.
With a 100% nationality rule in place for the 36th America's Cup. Teams with strong Olympic programs to feed their America's Cup program will have a big advantage. Additionally, the British Olympic program and culture has been so strong for the last five or more Olympic cycles that a second group in their 40's is waiting in the wings. Not so much to be part of the INEOS Team GB, but to provide a synergy and network that if properly harnessed can be a turbo-charger for the team.
"These are incredibly exciting times for the team in Portsmouth. It has been a full-on period and a massive learning curve for me, but I think we are in good shape," Ainslie concluded.
Time will tell whether or not that comment is an understatement.
In other America's Cup news, US sailing website www.sailingillustrated.com is reporting that a second US challenge is forming, in contrast to the New York Yacht Club's American Magic challenge, the second challenge will be 100% US crewed.
Entries close for the 36th America's Cup in just two months. The Defender, Royal New Zealand Yacht Squadron have said they will not announce any Challengers who have not already outed themselves, until entries have closed on June 30, 2018 (NZT).
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