America's Cup: New Challengers hold off on entry
by Richard Gladwell, Sail-World.com/nz 1 Jul 2018 11:42 AEST
1 July 2018
Jimmy Spithill is back with Luna Rossa and racing on their TP52 © Carlo Borlenghi
Several Challengers appear to have remained waiting in the wings after the first entry period closed a few hours ago on June 30, NZT.
Only the three previously announced Challengers were named by the America's Cup Defenders, the Royal New Zealand Yacht Squadron, in a media announcement made on Sunday. Italy's Luna Rossa, the New York Yacht Club and Royal Yacht Squadron are the only Challengers that have entered - up to seven were expected.
Two of the would-be Challengers spoken to previously by Sail-World NZ indicated that they had a good war-chest, but would be looking for more. They indicated they would be making Challenges - but at the last minute - which clearly hasn't eventuated.
One of those from USA told Sail-World that they had hired a technical director and had begun the design process, and realised they had to be underway by late-May before they started losing ground on the three billionaire-backed teams.
They have until November 30, 2018 to confirm - but will also be subject to a USD$1million late entry fee on top of the initial fee of USD$1million payable within 10 days of acceptance of their entry, plus a second entry fee of USD$1million due on November 30, 2018, and a Performance Bond (documentary) of USD$1million.
That adds up to a hefty USD$3million (NZD$4.3million) for regular entries or USD$4million (NZD$5.7million) for Late Entries. From another perspective, it is about 5% of the team budget. However, the entry fees and performance bond totalling USD$3million are the same as required initially for the last America's Cup and were payable within a similar timeframe.
By contrast, Challenger numbers are well down from the halcyon days of the 1987 America's Cup when Royal Perth YC initially received 24 paid up Challenges from 10 countries when the first entry period closed in July 1984, after Australia II became the first Challenger to win the America's Cup.
However, the 1987 Cup Challenge nomination fee was a very modest AUD$12,000, and indeed the Royal New Zealand Yacht Squadron only became aware they were listed as a Challenger when they read about it on the front page of the NZ Herald after - Sydney based RNZYS member Marcel Fachler sent a Notice of Challenge to Royal Perth.
By the time the 1987 Cup took place, the Challengers had shrunk to 13, with another four Australian teams contesting the Defence trials. The America's Cup in Fremantle is still remembered as being the best ever.
Since that Regatta, Challenger numbers averaged nine from 1992-2007 and then averaged just four in 2013-2017 under the tenure of Golden Gate YC.
The Cup survived the first Deed of Gift Challenge in 1988, triggered by Sir Michael Fay's club, Mercury Bay Boating Club.
The last time the America's Cup was sailed in monohulls was over a decade ago in 2007, where 11 Challengers competed against the Defender Alinghi. That event produced a projected surplus of NZD$48million, which was later reported to be NZD$100million and for which the Challengers received a healthy payout depending on their finishing place.
That should have been a solid foundation for the Cup to expand further under Alinghi and Ernesto Bertarelli. However, it crumbled after a second Deed of Gift action by the Larry Ellison backed Golden Gate Yacht Club was pursued through the New York Supreme Court.
That stint in the Court and accompanying Challenger paralysis proved to be a body blow to the America's Cup and one from which it is clear that the Cup has not yet fully recovered.
AC75 monohull only real option
Emirates Team NZ and Luna Rossa had little choice on their selection of a radical foiling monohull as the Class for the 36th America's Cup.
When questioned in Bermuda at the Media Conference immediately after the America's Cup win as to whether the AC50 could be used in Auckland, ETNZ CEO Grant Dalton responded querying whether the AC50 was sufficiently seaworthy to be able to sail in fresh sea breeze with wind against the tide on the inner Hauraki Gulf.
The tooling for the AC50 was also developed by Oracle Racing owned Core Builders Composites which would have been an interesting negotiation for the 2021 Cup, given the history between the two teams and their respective CEO's.
The other option would have been to go for a 75ft monohull - however, that would be too similar to the IACC boats used from 1992-2007 (five different versions of the IACC rule). The IACC yachts are slower than a TP52 and would not have added anything to contemporary America's Cup.
Ernesto Bertarelli's idea after the 2007 America's Cup was to move to a 90ft high-performance sloop the AC90. However, that suggestion was rendered moot by Golden Gate YC's legal action.
Billionaires still the only game in town
The three teams that have challenged for the 36th America's Cup are all from the now-traditional billionaire-backed Challenger model for the America's Cup.
Many of the would-be Challengers are looking to emulate the Team New Zealand model, but few seem to understand it - or are uncomfortable with the risk that must be taken in the early stages.
Back in 1993, Sir Peter Blake had to mortgage his house to raise the USD$75,000 entry fee for the 1995 America's Cup which was won by the Kiwi team.
Similar stories punctuate Emirates Team New Zealand's history, - with the team close to shutting down completely in October 2015. But gave themselves an overnight deadline to find the funds to survive.
Other barriers to entry include the perceived increased cost of the foiling AC75 monohull.
Yet Emirates Team Zealand has been frequently quoted as saying that they will conduct their 2021 Defence for the same budget as the 2017 Challenge NZD$80million (USD$68million). The usual budget for an America's Cup campaign by ETNZ is around NZD$100million - being the maximum they can raise through commercial sponsorship and other contributions.
The New Zealand Team also claim that the AC75 will cost no more than the AC50. Class rule changes announced on Friday should lower the cost of the AC75.
The three Challengers and Emirates Team New Zealand have signed the most of the key helmsmen from the 2017 America's Cup with both foiling (AC50) experience and big monohull experience.
2017 Challenger, Groupama Team France skipper Franck Cammas is still in the hunt for a principal sponsor for a 2021 America's Cup campaign - after his long-time sponsor Groupama withdrew from all sailing sponsorships prior to the 35th America's Cup. In an interview published in the New York Times, 2017/18 Volvo Ocean Race winner Charles Caudrelier (FRA) told NYT's, Christopher Clarey:
People always said the French were not meant for crewed races, but we’ve now proven it twice by winning the Volvo. In the America’s Cup, it’s just a problem of means, and everyone knows it. We can’t go up against Team New Zealand or Oracle or BAR if we don’t have the same means."
The third perceived barrier to entry is the new nationality rules, which require the sailing crew to all be nationals of the nation of the Challenging/Defending country, using one of two systems.
That has put an end to the "Rainbow" crews, where a mix of professional teams was assembled under very minimal nationality rules. In the 2017 America's Cup, just one of the sailing crew on the boat was required to hold a passport of the Challenging/Defending Country. That was easily achieved by hiring a key crew member who had dual nationality.
Under the new Protocol, teams whose countries have strong Olympic or other development programs for their sailing talent, have little problem complying with the Nationality rule. Those who do not will have to hire professional sailors who will move to achieve residency in their new country for a total of 380 days in the two year period from September 1, 2018 to Agust 30, 2020.
The downstream issue with the "rainbow" crews is that they don't resonate as nationals of the country they represent. That manifests itself in a reduced fan interest, and in turn that means reduced TV audiences and a harder sell to sponsors. With the exception of Jimmy Spithill, the current crop of helmsmen don't polarise fans and add colour to the Cup in the way that Dennis Conner, Harold Cudmore, Tom Blackaller et al did previously.
Further entries are still believed to be in the gestation phase from USA, Asia, France and Italy. A Scandinavian entry was rumoured.
The yet to be announced AC50/F-50 circuit backed by Larry Ellison is not expected to impact America's Cup entries.
In previous America's Cups where US clubs were Challengers, there were six US Clubs represented in Fremantle, five in Auckland in 2000, three in 2003 and just one (Larry Ellison's BMW Oracle Racing) in Valencia in 2007.
A notable entry omission is Australia which has a rich America's Cup heritage; has the financial ability to run multiple supermaxi campaigns out of Sydney; has an excellent and successful Olympic program to provide further sailing talent; and filled most of the critical positions on the race boat and ashore in Oracle Team USA in the 2013 and 2017 America's Cups.