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America's Cup: World Sailing CEO's sneaky move backfires

by Richard Gladwell / Sail World NZ 9 Oct 20:37 PDT 10 October 2019
A direct approach to the NZ Government was always going to backfire given the support to the team from Prime Minister Jacinda Ardern who declared herself to be a fan, at the Emirates Team New Zealand launch on September 6 © Richard Gladwell / Sail-World.com

Sail-World has ascertained that America's Cup organisers have agreed in principle the terms and amount of a sanctioning fee with World Sailing, the world governing body for the sport.

Details of the arrangement, are yet to be confirmed, but it is believed that the amount of the seven-figure Sanctioning Fee is similar to that paid for previous America's Cups.

An Emirates Team New Zealand spokesman has confirmed in a written statement that: "Despite the World Sailing CEO Andy Hunt attempting to circumvent the process by contacting the NZ Government, negotiations direct with the Board of World Sailing for the America's Cup to be a sanctioned event have been satisfactorily concluded on behalf of the Challenger of Record / Defender.

"The agreed fees and other terms of this agreement, now at a contract stage, are in line with previous cycles of the America's Cup and both the Challenger of Record and Defender are looking forward to maintaining the long-standing valued relationship between the America's Cup and World Sailing. "

The organisers pay Sanctioning Fees, to World Sailing covering the use of World Sailing's Racing Rules of Sailing, officials including on the water judges and umpires.

The amount and conditions of the sanctioning arrangements had been in a state of virtual stalemate since Emirates Team New Zealand won the America's Cup over two years ago. Little reference had been made by the world body to the most prestigious trophy in sailing, which will be contested in just 18 months.

That blinkered approach came to a head when the CEO of World Sailing exchanged correspondence directly with the New Zealand Government advising that the event was not sanctioned.

For its part, Cup organisers are understood to have long ago made an offer to World Sailing similar to the last event but the CEO was seeking a substantial increase which they considered unjustified, hence the stalemate.

The matter is understood to have been resolved directly between the Board of World Sailing and America's Cup organisers.

At the heart of the matter was believed to be the level of the fee, given that there are only five teams entered for the 2021 America's Cup. Also, the Cup organisers have opted to run with a three-strong Arbitration Panel for which they will cover the costs outside of World Sailing.

Just under a year ago, World Sailing announced that it had concluded an 11-year agreement covering Special Event recognition for the Larry Ellison backed SailGP circuit.

Yesterday the world body announced that they had agreed that the next two editions of The Ocean Race (formerly the Volvo Ocean Race) would have special event status.

In its media release announcing The Ocean Race agreement, World Sailing referred to the six events on which it did have agreements which included "SailGP, World Match Racing Tour, PWA World Tour, Star Sailors League and the Global Kitesports Association's freestyle world tours".

The Ocean Race does not get under way until September 2021, six months after the America's Cup Match, and the first event requiring an agreement is the America's Cup World Series regatta to be sailed in Cagliari, Sardinia in six months, next April.

World Sailing published a similar list on October 4, 2018, announcing the Special Event recognition for Sail GP.

In both lists, the America's Cup Regatta was a glaring omission, given the event timings.

World Sailing President Kim Andersen also made no mention of the imminent AC75 launchings in his September Presidential newsletter, despite two being launched (and one sailed) later in the same week. The events completely dominated world sailing news, before and after the launchings.

In an interview with Sail-World in October 2018, Andersen told Sail-World that the negotiations with the America's Cup organisers over a Special Event recognition were in hand and were expected to be concluded in the first quarter of 2019.

The conclusion of negotiations with both the organisers of The Ocean Race and America's Cup is expected to take some of the financial heat off the Board and Executive of the financially challenged World Sailing ahead of its Annual Conference at the end of this month in Bermuda.

Earlier this year World Sailing advised they had to arrange an overdraft facility to ensure adequate cash-flows up to the 2020 Olympic Sailing Regatta.

Under its own rules and regulations World Sailing can remove "Competitor Eligibility" for competing in a Prohibited Event - which can be one for which "the Organizing Authority has not paid the World Sailing event fees".

Removal of Eligibility for sailing in an unsanctioned America's Cup World Series event in Cagliari, in April, could have meant that 2020 Olympic representatives from who are also part of America's Cup teams could have been banned from competing in the 2020 Olympic Sailing Regatta at Enoshima.

Included in that group would have been the 2016 Olympic Gold medalists, Peter Burling and Blair Tuke (NZL) from Emirates Team New Zealand and Giles Scott (GBR), INEOS Team UK. The clarification of the Special Event status for the America's Cup by ETNZ ends any speculation about the possible removal of eligibility for sailors.

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