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Marine Resources 2017 728x90

Andersen Interviewed: Anti-Trust and Olympic class Selection

by Richard Gladwell, 23 Oct 2018 17:47 PDT 24 October 2018
`In the Rio Olympics, the Finn class is probably the biggest monopoly. Because there are 23 boats, 22 of those came from the same manufacturer.` - Kim Andersen, World Sailing President © Richard Gladwell's New Zealand Editor, Richard Gladwell, interviewed the President of World Sailing, Kim Andersen (DEN) covering a number of issues ahead of the world governing bodies Annual Conference starting this weekend. This piece covers Anti-Trust and Olympic class selection.

The shape of the 2024 Olympic Regatta is expected to be finalised at the end of this week when World Sailing holds its Annual Conference, in Sarasota, Florida USA.

The meeting follows the world governing body's Mid-Year meeting held at the Chelsea Football Club in SW London , which saw a slate of 10 events approved for the 2024 Olympics in Marseille.

The slate included several new events and racing formats which were not well-received by sailing fans, with seven of the ten current Olympic classes subject to review.

Kiteboarding is a new inclusion - the effect of which at best will be to compress the current Olympic line-up, and probably tipping one class out of the Olympic nest completely.

World Sailing President, Kim Andersen (DEN) will be trying to lead the Council and Committees through some difficult decisions which are set against two backdrops - Anti-Trust and Gender Equality.

Andersen is two years into what should be an eight-year term, if re-elected in 2020. He unseated the previous President in mid-term for the first time in the 72 year history of Presidential appointments, in the 111 year old world federation of national authorities and class associations.

"The Council selected some events in May. The next process is to select equipment and that is the process which is going to happen in November," Andersen told Sail-World from his home in Copenhagen.

"There are two classes [Laser and RS:X] where we are to apply what was agreed by Council in May 2017 not to get into trouble with anti-monopoly."

The "process" that is being run with the Laser is part of a review to select "equipment" - or a class - for the Men’s Singlehanded/One Person Dinghy event.

Put into the mix with Laser are three other single-handed classes, the Melges 14, D-Zero and RS-Aero, selected from a long list of eight, which in turn were selected from an invitation for information from interested builders/classes.

Andersen is adamant that the Laser has not been kicked out of the Olympics. "We are running that process with the Laser. It is not true that the Laser has been kicked out. We are just applying "anti-monopoly" so that we don't get into trouble. The Council has the freedom of choice to say they would like a Laser."

What Andersen calls "anti-monopoly" is a euphemism for Anti-Trust, or ensuring that there is genuine competition on pricing and supply of boats and gear used at the Olympic Sailing Regatta, and restrictive business practices. In a decision issued in December 2017, the EU made it clear that its tentacles did extend to cover Sport.

As well as being bound by the regulations of the European Commission, World Sailing have introduced a number of measures including their own Anti-Trust policy, along with strengthening the Olympic Class contract and the evaluation process conducted for a new Olympic Event.

Notwithstanding World Sailing’s new internal Anti-Trust policies which may future-proof its Equipment decisions, it is believed that there is an Anti-Trust complaint against the practices of the world body proceeding with the European Union. Fines for a breach can be very substantial being 10% of the revenue of product sold.

Of the current Olympic classes, five [Laser, Laser Radial, RS:X M&W and Nacra 17] are what have been known as Single Manufacturer One Designs (SMOD).

Two, being the 49er and 49erFX, are partial SMOD's - hulls can be purchased from one of three licenced builders sails and spars must come from a SMOD supplier for the class.

The other two - the 470 and Finn - were set up in the pre-SMOD era - where 470 builders were required to be licenced by World Sailing and its predecessors. In the Finn there is no such restriction and anyone can build boats (hulls) provided they complied with the class measurement rules. The purchase of spars, foils and sails could be from any manufacturer or DIY, provided they complied with the class measurement restrictions. There are nine licenced builders for the 470 hulls, with no restriction on suppliers for all the other components.

Single Manufacturer One Designs are a relatively recent phenomenon, the Laser was the first SMOD boat in 1996 with the then-ISAF bending its own rules which required the world governing body to have ownership of the design of any Olympic class. As the Sailing Olympics (under "dictate" from the IOC) needed the Laser more than the Laser needed the Olympics, the ISAF set a precedent, which has been picked up by every new Olympic class since.

There are seven licenced builders in the Finn class, and again sailors can purchase, sails, spars, fittings from any manufacturer - or they can build themselves. The only requirement is that the components fit within the prescribed measurements and tolerances specified in the class rules.

Prior to 1996, all monohull and multihull classes were run on a licenced builder basis. Many of the leading marine companies including North Sails were started on the basis of competitors making their own gear, winning and then setting up a successful sailmaking, boatbuilding, fitting, clothing or sparmaking business to satisfy the market demand. Quality and cost were controlled by market competition.

The Anti-Trust issue is not new.

"When I came on board there was already a letter from manufacturers implying that World Sailing would have a problem which hadn't been addressed by the previous Board," says Andersen. "I addressed it immediately and took it to the first Mid Year meeting and explained to Council what this was all about. "

In response, World Sailing produced its own Anti-Trust regulations, which required every Olympic class to be reviewed every second Olympic quadrennial or eight years.

That set the scene for four of the current Olympic classes, the Laser and Laser Radial, and RS:X (Mens and Womens) to be the first Events to be reviewed against the new provisions.

Is the Finn class a monopoly?

Andersen raised a novel view of what constitutes a monopoly in sailing, claiming that the EU believed that when World Sailing was selecting a class or discipline at the Olympics, a monopoly was created because "you are not allowing the other classes in. You can say that the longer a class has been at the Olympics the bigger the monopoly is because we have had all the other classes out. And they have never had a chance to get into the Olympics."

"That is at the highest level of monopoly," he concluded.

"In the Rio Olympics, the Finn class is probably the biggest monopoly. Because there are 23 boats, 22 of those came from the same manufacturer."

He points to the Finn class rules being old. "That is the reason for the [Devoti] Fantastica probably being better than the other boats, and that must be the reason why people are choosing it.

Andersen was referring to the dominance in the Finn class by Devoti Sailing. Built by Luca Devoti, a Silver medalist - whose boats have won every Gold medal in the class since the 1996 Olympics. He built a new mould in 2014 and 22 of the boats in Rio came from this mould (branded as the Fantastica model by Devoti), the 23rd boat was Devoti Classic from the previous mould.

Luca Devoti says that the new plug was necessary after the previous plug was 23 years old, and it was time to take advantage of the use of CAD and CNC milling machines to construct a perfectly fair hull shape within the class measurement rules and tolerances. He also notes that few serious Olympic regatta contestants in any class would go the Olympics in anything other than a new boat.

While there was a price increase for the Fantastica, Devoti said it was only a catch up to current values as the price had not been increased for several years, despite building cost increases.

It is a similar situation in the other licenced builder class, the 470 - where Ziegelmayer and Mackay are the two dominant builders. In both classes sailors are free to purchase their own sails, spars, foils and fittings, often working in conjunction with a manufacturer of those parts - to enable that company to test new developments in competition. The fact that their gear is being used by a top sailor/crew does no harm to the brand, either.

As a former Chairman of World Sailing's Equipment Committee Andersen's solution to any "Arms Race" within a class is to tighten the measurement tolerances.

Anti-Trust eyes need to be wide open

The issue with Anti-Trust for World Sailing's Annual Conference is that it is one matter to be able to beg forgiveness for inadvertent previous breaches of EU Anti-Trust regulations. However, World Sailing risks placing itself in a very serious situation and facing hefty penalties (10% of the revenue) for a continuing breach.

There are no previous cases on the issue, as the EU has only recently reached across to sport, calling the International Skating Union to heel.

The other boat sports at the Olympic Games, being Rowing and Kayaking have no SMOD rules in place, and operate on a system similar to the World Sailing licenced builder system with competitors being able to purchase boats, oars, paddles etc from a range of suppliers.

"What will happen now is that the [equipment] decision-making process is kept within the Council and MNA's and not directed by law or anything like that. We have to apply and stay within the law," Andersen explains - clearly cognisant that World Sailing does not have a lot of wriggle room in the matter.

Selection free-for-all

On the issue of whether and when Olympic classes have ever been reviewed, due to the horse-trading which has dominated selection for many years, arguably every class has been reviewed by Council every four years up to 2016. What is being proposed at present is an attempt to formalise that review process.

The last change to the Olympic line-up came in November 2012 when the Womens Match Racing was dropped in favour of reinstatement of the Multihull, after it had been dropped in November 2008. Trials were held before selecting the Multihull equipment - with the Nacra 17 getting the nod. In November 2016, it was agreed to freeze the Olympic classes for 2020.

World Sailing is keen to go to a structured system where Events are selected and then the Equipment/Classes are determined. In a previous year (for the 2008 Olympics?), this process broke down and was only resolved by Council voting on a preference system for the classes until the required number was chosen. Then the Events were made up after the meeting to suit the selected mix.

While not a perfect solution, in the political context of the World Sailing flock, it ruffled the fewest feathers - even if the Executive were left wringing their hands at the ad hoc nature of the selection process and how it must have looked in Lausanne.

At the Mid-Year Meeting in May 2018, World Sailing adopted a Submission by the Romanian Yachting Federation for the Paris 2024 Olympic Event options. When World Sailing's regulations [that every new Event required an Equipment Evaluation] were applied to that decision, the outcome was that potentially in seven of the ten events the current Olympic fleet could be made redundant.

"Regulation 23 was set up many years ago which tried to select equipment earlier in order for nations to adopt earlier. But I think the whole job of the Council is to make sure that the equipment has the minimum change."

In that basis, Andersen is optimistic that excluding Kiteboarding, which is a new event, that only two of the current classes would change for 2024, with several sliding across to be used in new Events.

While Regulation 23 may have been in existence for several years, it has been modified, and the latest update includes specification of the Events chosen in May - and with only three classes and events remaining intact from Rio 2016, unless a decision is made to continue with existing classes a new Event.

Regulation 23 also contains a fish-hook which could make some of the new Events illegal. "In choosing its Olympic Events and Equipment, World Sailing shall seek to ensure that each Event at the Olympic Sailing Competition is, and will likely remain, the pinnacle Event for that discipline or areas of sailing." The letter and intent of that clause makes it clear that by definition any event or new event must be a "pinnacle Event". As several of the Events [Relays, Single handed Combined Scores, Mixed Two Person Dinghy] chosen are not currently contested at World Championship level some would argue that their selection is illegal in terms of meeting Regulation 23.

It also remains to be seen as to whether the governing body of World Sailing revisits the Event Selections, voted on last May, and makes changes.

"What is happening around the World Council table is that the classes are lobbying very hard. And all this lobbying is creating a situation where the outcome is not being that logical or rational. While I must take the blame, I cannot take the responsibility for what is voted through," says Andersen.

"I think the Council is very sensitive and very alert about how they can do things, and I hope that they have learned their lesson so that we can as few changes in as possible.

"We should keep the [existing] equipment as much as we can, and use what is already used."

In Part 2 we will cover - Gender Equality; Part 3 will look at Paralympics, World Sailing's Financial situation; Part 4 covers Major Events, TV and media, and Conflict of Interest in World Sailing

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